NBS -7025A

STRATEGIC MARKETING
MANAGEMENT
Prepared by:
• Dr. Jacky Cheah Jun Hwa
• Dr. Nick Yip (email – n.yip@uea.ac.uk)
CORPORATE STRATEGY
AND MACRO
ENVIRONMENTAL
ANALYSIS
REGISTER YOUR ATTENDANCE BY SCANNING THE QR
CODE.
IF YOU DON’T HAVE A
SMARTPHONE WITH
YOU, A UNIQUE 6-
DIGIT
ALPHANUMERIC
CODE IS DISPLAYED
BENEATH THE QR
CODE –YOU SIMPLY
HAVE TO MAKE A
NOTE OF THIS CODE
AND ENTER IT INTO
THE ATTENDANCE
 LEARNING
OUTCOMES
i. UNDERSTAND THE PURPOSE AND POSITIONING OF CORPORATE
STRATEGY
ii. CONSIDER HOW BUSINESS STRATEGY RELATES TO CORPORATE
STRATEGY UNDERSTANDTHECONCEPTOF THE VALUE PROPOSITION
iii. BE ABLE TO UNDERSTAND HOW COMPETITIVE ADVANTAGE CAN BE
GENERATED
iv. BE ABLE TO APPLY A PESTLE ANALYSIS AND PORTER’S FIVE FORCES
ANALYSIS
v. BE ABLE TO REVIEW THE ENVIRONMENT TO IDENTIFY THREATS AND
OPPORTUNITIES THAT IMPACT THE BUSINESS
 BUSINESS VS CORPORATE LEVEL
STRATEGY
CORPORATE LEVEL
STRATEGY
• WHAT IS THE SCOPE OF THE FIRM: IN WHICH INDUSTRIES AND MARKETS SHOULD
IT COMPETE?
• WHICH INDUSTRIES ARE ATTRACTIVE TO THE FIRM RESPONSIBILITY OF TOP
MANAGEMENT TEAM AND STRATEGY STAFF AT HQ

BUSINESS LEVEL
STRATEGY
• HOW DOES THE FIRM COMPETE IN A PARTICULAR INDUSTRY OR MARKET?
• HOW TO ESTABLISH A COMPETITIVE ADVANTAGE
• PRIMARILY EXECUTED BY DIVISIONAL/STRATEGIC BUSINESS UNIT (SBU)
MANAGEMENT
An Introduction to Prahalad & Hamel’s Core Competence of the Corporation - YouTube
 CORPORATE LEVEL STRATEGY
CORPORATE LEVEL STRATEGY MAKES DECISIONS ON WHICH MARKETS
OR INDUSTRIES THE FIRM SHOULD OPERATE IN AND WHICH TO
WITHDRAW FROM:
i. CORPORATE PARENTING

ii. PORTFOLIO MANAGEMENT

iii. THE ROLE OF THE CENTRE (HQ) IS TO DECIDE HOW FAR TO DIVERSIFY OR
IF TO REMAIN IN ONE INDUSTRY

iv. DIVERSIFICATION USE PORTFOLIO MATRIX (BCG GROWTH-SHARE MATRIX)

v. ACTIONS RANGE FROM ACQUISITIONS AND MERGERS TO DIVESTMENTS

AND RESTRUCTURING
 CORPORATE
STRATEGY
• “THE ‘BUSINESS CORPORATE STRATEGY IS A FRAMEWORK, EITHER IMPLICIT OR EXPLICIT, THAT GUIDES

AN ORGANISATION’S CHOICE OF ACTION. THIS DEFINITION VIEWS STRATEGIES AS PLANNED AND

EMERGENT, EITHER RESULTING FROM STRATEGIC DESIGN, OR THE EVOLUTION OF A PATTERN OF

DECISIONS, OR A COMBINATION OF THE ABOVE” (OCASIO AND JOSEPH, 2009:250)

• PORTFOLIO’S CONCEPT PROVIDES A SUPERIOR APPROACH FOR DEVELOPING DIFFERENTIATED

STRATEGIC BUSINESS OBJECTIVES WHICH ARE NECESSARY FOR ANY COMPANY TO MAKE THE MOST OF

ITS OPPORTUNITIES. HEDLEY, B (1977) STRATEGY AND THE BUSINESS PORTFOLIO, LONG RANGE

PLANNING, 10 (1): 9-15.

 CORPORATE STRATEGY

• “FIRST, CORPORATE-LEVEL STRATEGY MEANS THE STRATEGIC

DECISIONS THAT LEAD COMPANIES TO DIVERSIFY FROM ONE
BUSINESS INTO OTHER BUSINESS AREAS, EITHER RELATED OR
UNRELATED.

• SECOND, CORPORATE-LEVEL STRATEGY MEANS THE ROLE OF

THE CORPORATE HEADQUARTERS IN DIRECTING AND
INFLUENCING STRATEGY ACROSS A MULTI-PRODUCT GROUP
OF COMPANIES.” RICHARD LYNCH (2015, P. 302)
STRATEGIC DIRECTIONS AT CORPORATE LEVEL
BCG GROWTH-SHARE
MATRIX
 BCG GROWTH-SHARE MATRIX

TWO CRITERIA
PROBLEMS WITH BCG MATRIX
• MARKET GROWTH RATE
• DEFINITION OF MARKET GROWTH
• IMPORTANT BECAUSE RAPIDLY GROWING
CONVENTIONALLY SET AT 5%, BUT THERE IS
MARKETS OFFER MORE SALES
NO
• OVERALL AGREEMENT
OPPORTUNITIES

• RELATIVE MARKET SHARE • DEFINITION OF MARKET

• SHARE OF OWN SHARE DIVIDED BY SHARE OF • RADICALLY CHANGES IN
• EUROPEAN MARKET VERSUS UK MARKET
INTERPRETATION
MARKET LEADER

• LARGER MARKET SHARE GIVES MORE ROOM FOR • DEFINITION OF RELATIVE MARKET SHARE
CONVENTIONALLY SET AT 1.5 TIMES, BUT
MANOEUVRE
THE FUNCTION OF THE CORPORATE CENTRE
Headquarters do:
• provide corporate services, such as international finance, central
human resource management

• steer corporate development, centralised R&D

• provide finance for promising (or problem) areas

• develop formal links between businesses, e.g., transfer of technology

• evaluate subsidiaries
 VALUE-ADDING
ACTIVITIES

Coaching and
Envisioning
facilitating

Providing central
services and Intervening
resources
 BUSINESS LEVEL
• FOCUSES ON INDIVIDUAL MARKETS AND HOW THE FIRM SHOULD
STRATEGY
OPERATE THAT SINGLE INDUSTRY

• SWOT ANALYSIS

• ENVIRONMENT-BASED OPTIONS INCLUDE CREATING FIT.

• GENERIC STRATEGIES, MARKET OPTIONS MATRIX, EXPANSION

METHODS
• MATRIX

• RESOURCE-BASED OPTIONS INCLUDE CREATING STRETCH: VALUE

CHAIN, RBV, COST REDUCTION, INNOVATION ETC.

THE EMERGENCE OF COMPETITIVE
ADVANTAGES
HYBRID GENERIC
STRATEGY
PORTERS VALUE CHAIN
 COST LEADERSHIP AND DIFFERENTIATION
COMPARED (USING THE VALUE CHAIN)
COST DIFFERENTIATION
ADVANTAGE
• PRIMARY ACTIVITIES FOR COST • PRIMARY ACTIVITIES FOR
LEADERSHIP DIFFERENTIATION
•SPECIALISED HANDLING AND
• COST AND RELIABILITY STORAGE

• FUNCTIONALLY BASED •R & D, PROJECT-BASED

OPERATIONS OUTSOURCED
HAULAGE AND STORAGE SALES
AND PROMOTION-BASED
• CALL CENTRES
OPERATIONS
•MANAGEMENT OF DISTRIBUTION
CHANNELS
•MARKET SEGMENTATION
•MAINTENANCE TEAMS
 COST LEADERSHIP AND
DIFFERENTIATION CREATION (USING
THE VALUE CHAIN)
Cost Advantage Differentiation
• SUPPORT ACTIVITIES FOR COST • SUPPORT ACTIVITIES FOR
LEADERSHIP DIFFERENTIATION
• EXPLOITATIVE LEARNING BASED • EXPLORATIVELEARNING BASED
INFORMATION SYSTEMS
INFORMATION SYSTEMS
• TOP-DOWN MANAGEMENT
• BOTTOM-UP(TEAM BASED)
• TECHNOLOGIES TO PROMOTE
ECONOMIES OF SCALE MANAGEMENT
• TECHNOLOGIES TO PROMOTE
• CENTRALISEDTENDERING FOR THE
INNOVATION
LOWEST COST
• DEVOLVED BUYING
 FOCUS STRATEGY –BOTH COST LEADERSHIP OR
DIFFERENTIATION ARE POSSIBLE, BUT THERE ARE
ISSUES
• A COST FOCUS APPROACH WOULD AIM • NICHE MARKETS ARE CHARACTERISTICALLY
FOR A COST ADVANTAGE IN ITS TARGET SMALL AND MAY NOT BE SIGNIFICANT OR
SEGMENT ONLY, NOT THE OVERALL LARGE ENOUGH TO JUSTIFY ANY EFFORT.
MARKET

• A DIFFERENTIATION FOCUS • COST FOCUS CAN BE DIFFICULT IN INDUSTRIES

APPROACH WOULD AIM FOR
DIFFERENTIATION IN ITS TARGET
SEGMENT ONLY, AND NOT THE
OVERALL MARKET.
WHERE ECONOMIES OF SCALE CAN PLAY AN
IMPORTANT ROLE.
• THERE IS THE EVIDENT DANGER THAT THE
NICHE MAY DISAPPEAR OVER TIME, AS THE
BUSINESS ENVIRONMENT AND CUSTOMER
PREFERENCES CHANGE OVER TIME
 STUCK IN THE MIDDLE: A
• STRADDLER
A COMPANY'S FAILURE TO MAKE A CHOICE BETWEEN COST LEADERSHIP AND
DIFFERENTIATION ESSENTIALLY IMPLIES THAT THE COMPANY IS STUCK IN
THE MIDDLE.

• THERE IS NO COMPETITIVE ADVANTAGE FOR A COMPANY THAT IS STUCK IN

THE MIDDLE AND THE RESULT IS OFTEN POOR FINANCIAL PERFORMANCE
(PORTER, 1980).

• HOWEVER, KAY (1993) AND MILLER (1992) HAVE CITED EMPIRICAL EXAMPLES
OF SUCCESSFUL COMPANIES SUCH AS EASY JET, TOYOTA AND BENETTON
WHO USED DIFFERENTIATION AND LOW COST SIMULTANEOUSLY, WHICH LED
TO THE SUCCESS OF THE COMPANIES.
 BOWMAN’S STRATEGY
“CLOCK”– BUSINESS
STRATEGY OPTIONS
High
Differentiation Businesses may
Hybrid Focused move evolve
differentiation
4 their
3 5 strategy…leaving
gaps for others
to enter?
PERCEIVED
ADDED Low 6
VALUE price 2

1 7
Strategies
Low price/ low added 8 destined for
value ultimate failure
Low
Low PRICE High
Bowman's Strategy Clock - Making Sense of Eight Competitive Positions (mindtools.com)
 THE STRATEGY -STRATEGY
1. No “CLOCK” OPTIONS
frills-Low price/added value -Likely to be segment specific
2. Low price leader -Price war? Low margins? Cost-effective
3. Hybrid. -Low-cost base and reinvestment in low price and differentiation
4. Differentiation: (a) Without price premium -Perceived added value by user market
share & (b)With price premium-Perceived added value thru price premium
5. Focused differentiation -Perceived added value to a particular segment, warranting
price premium.
6. Increased price/standard value. -Higher margins if competitors do not follow and
risk of losing market share
7. Increased price/low value. -Only feasible in a monopoly situation
8. 8. Low value/standard price -Loss of market share
Examples:
EXTERNAL
ANALYSIS
MODEL OF STRATEGIC MANAGEMENT
STRATEGY
CONTEXT
Internal Context:
-Organisational Culture
- Entrepreneurship
- Ethics

STRATEGY
- Fundamentals -Competitive
FORMATION:
Advantage -Strategic Options - Strategic Fit STRATEGI
Strategic Choice C
(and implementation) OUTCOME
S

External
-Remote
Context:Environment -
Operating Environment
 WHY EXTERNAL ENVIRONMENT
•
MATTERS?
BUSINESS MUST OPERATE IN AN ENVIRONMENT MARKED BY COMPETITION,
STRUCTURAL FORCES AND UNCERTAINTY.

• BUSINESS MUST MAKE CHOICES THAT FIT TOGETHER IN HOLISTIC,

CONSISTENT WAY IN ORDER TO SUCCEED IN THAT ENVIRONMENT.

• THESE CHOICES ARE THE ESSENCE OF STRATEGY.

KEY QUESTION: HOW AN UNDERSTANDING OF THE

ENVIRONMENT SHAPES A FIRM’S CHOICES –ITS
POSITIONING AND BUSINESS MODEL.
LAYERS OF THE BUSINESS
ENVIRONMENT
 UNDERSTANDING THE
•
ENVIRONMENT
DIVERSITY
• MANY DIFFERENT
INFLUENCES
• COMPLEXITY
• INTERCONNECTED
INFLUENCES

• SPEED OF CHANGE
• KEY QUESTIONS: IS THE EXTERNAL ENVIRONMENT TOO
UNPREDICTABLE TO MAKE USEFUL FORECASTS?
Fortune Global 500 – The largest companies in the world by revenue | Fortune
 EXTERNAL ASSESSMENT

• FOCUSES ON IDENTIFYING & EVALUATING EVENTS BEYOND THE

IMMEDIATE CONTROL OF THE FIRM AIMED AT IDENTIFYING KEY
VARIABLES THAT OFFER ACTIONABLE RESPONSES

• EXTERNAL ASSESSMENT REVEALS:

• KEY OPPORTUNITIES KEY
THREATS
• MANAGERS THEN FORMULATE
STRATEGIES:
• TAKE ADVANTAGE OF OPPORTUNITIES AVOID/REDUCE IMPACT OF
THREATS
PESTEL FRAMEWORK
PESTLE FRAMEWORK IS DESIGNED TO BE
EXHAUSTIVE!
• Government policies, taxation changes, foreign trade regulations, political
Political
(isandit?)
risk in foreign markets, changes in trade blocks(EU).

• Business cycles, interest rates, personal disposable income, exchange rates,

Economic
unemployment rates, GDP trends.

Socio-cultural • Population changes, income distribution, lifestyle changes, consumerism,

changes in culture and fashion.

Technological • New discoveries and technology developments, ICT innovations, Rates of

obsolescence, increased spending on R&D.

Environmental • Environmental protection regulations, energy consumption, global

warming, waste disposal and recycling.

Legal • Competition laws, health and safety laws, employment laws, licensing
laws, IPR laws.
 THE MACRO-ENVIRONMENT FOR A BUSINESS:
PESTEL
POLITICA E.G. CHANGE OF POLITICAL PARTY IN POWER FROM RIGHT WING TO
LEFT WING OR VICE VERSA
L:

SOCIAL- E.G. DEMOGRAPHIC CHANGES SUCH AS AN AGING POPULATION AND INCREASED

ECONOMIC: INFLATION

TECHNOLOGICALE.G. TECHNOLOGICAL ADVANCES

: E.G. ‘GREEN’CONSUMERISM

ENVIRONMENTALE.G. CONSUMER RIGHTS ACT

: LEGAL:
 PESTEL: BACKGROUND
FACTORS
• NOT JUST A LIST OF INFLUENCES
• NEED TO UNDERSTAND KEY DRIVERS OF CHANGE
• DRIVERS OF CHANGE HAVE DIFFERENTIAL IMPACTS ON INDUSTRIES, MARKETS, AND
• ORGANISATIONS FOCUS IS ON THE FUTURE IMPACT OF ENVIRONMENTAL FACTORS
• COMBINED EFFECT OF SOME OF THE FACTORS LIKELY TO BE MOST IMPORTANT
• AIM TO IDENTIFY KEY SUCCESS FACTORS IN THE INDUSTRY
 PESTEL:
SUMMARY
• NOT JUST A LIST OF INFLUENCES
• NEED TO UNDERSTAND KEY DRIVERS OF CHANGE
• DRIVERS OF CHANGE HAVE DIFFERENTIAL IMPACTS ON
INDUSTRIES, MARKETS, AND ORGANISATIONS
• FOCUS IS ON THE FUTURE IMPACT OF ENVIRONMENTAL
FACTORS
• COMBINED EFFECT OF SOME OF THE FACTORS LIKELY
TO BE MOST IMPORTANT
• AIM TO IDENTIFY KEY DRIVERS OF CHANGE IN THE
INDUSTRY
PORTER’S FIVE FORCES OF COMPETITION
FRAMEWORK
http://youtu.be/mYF2_FBCvXw
SUPPLIE
RS
Bargaining Power of
Suppliers
INDUSTRY
COMPETITO
RS
POTENTI Threat of Threat of SUBSTITUT
AL New Entrants Rivalry among Substitutes
THREATS ES
existing competitors
Source: Porter, M. E. (1980:4)
Competitive Strategy: Techniques for
Bargaining Power of Analysing Industries and Competitors,
Buyers New York NY: Free Press
BUYE
RS
 INCREASING THE DEPTH OF
•
ANALYSIS
THREAT OF ENTRY
•IDENTIFY THE NATURE AND STRENGTH OF BARRIERS, BUT ALSO THE RESPONSE OF
INCUMBENTS TO
NEW ENTRANTS. FURTHERMORE, CONSIDER THE INDUSTRY ATTRACTIVENESS IN TERMS OF
POSSIBLE PROFITABILITY. ALSO, LOOK AT POSSIBLE ENTRANTS FROM OTHER INDUSTRIES E.G.
TECHNOLOGY COMPANIES AND THOSE FROM KNOWLEDGE INDUSTRIES WHO MAY BE
ATTRACTED BY YOUR INDUSTRY.
• SUBSTITUTE
• SCONSIDER THREATS FROM VARIOUS SOURCES, INCLUDING OTHER INDUSTRIES, NOT
JUST FROM NEW TECHNOLOGY. THERE MAY ALSO BE AN EXISTING SUBSTITUTE
THAT HAS GONE OUT OF FASHION THAT COULD HAVE A RESURGENCE, E.G. TIMBER
OPTIONS.
 INCREASING THE DEPTH OF
ANALYSIS
• POWER OF BUYERS
• CONSIDER BUYERS PRICE SENSITIVITY, RELATIVE BARGAINING POWER ANDNEW
TRENDS UNDER THIS SECTION TO GAUGE NOT ONLY CURRENT BUT ALSO FUTURE
POWER.
• POWER OF SUPPLIERS
• THIS IS MORE DIFFICULT AS THE KNOWLEDGE MAY BE INDUSTRY-SPECIFIC,
HOWEVER LOOK AT SCARCITY OF SUPPLY AND PINCH POINTS IN THE SUPPLY CHAIN.
ALSO CONSIDER THE INFLUENCE OF ‘GREEN’ ISSUES.

• COMPETITIVE
INTENSITY
•CONSIDER A RANGE OF METRICS TO MEASURE INTENSITY E.G. SELLER CONCENTRATION,
DIVERSITY OF COMPETITORS, CAPACITY, EXIT BARRIERS, PRODUCT DIFFERENTIATION,
AND COST CONDITIONS.
BUT SOME AIRLINES ARE
PROFITABLE)
(SOURCE: WWW.RITA.DOT.GOV)
 COMPETITIVE ENVIRONMENT: PORTER’S 5
FORCES Threat of New Entrant
Barriers to Entry: Economics of scale, Example: Google launch Nexus 7 tablet. They have the capital and Huawei the
scope, or experience, Capital investment expertise to manufacture.

Bargaining Power of Suppliers

Factor: Suppliers arespecialist or have a Example: ARM was purchased by Japan’s Softbank, who now has the power
unique resource to influence production costs at both Apple and Samsung.

Bargaining Power of Buyers

Factor: Switching costs are high, as Example: Apple’s integrated systems and software compatibility mean that
customers are tied into Brand customers find it very difficult to switch to other suppliers of technology.

The Threat of Substitutes

Factor: ‘Closeness of Rationale: The closer the substitute, the easier it is to switch to it. Smart
substitute’ watch, mini tablet, or mobile phone landlines.

Rivalry among Competitors

Factor:Product lacks differentiation Rationale: If products are not very different, rivals must compete on price and
competitive intensity increases.
GOOGLE ENTER THE TABLET
MARKET
• GOOGLE'S NEXUS PROGRAMME GIVES
BIRTH TO A PURE ANDROID SMARTPHONE
EVERY YEAR, SOMETIMES TWO. THE IDEA
BEHIND THE NEXUS IS TO SHOWCASE
ANDROID IN ITS PUREST FORM, AWAY
FROM THE POKING AND PRODDING OF
MANUFACTURER SKINS.

• IMPORTANTLY, THE NEXUS IS THE

CHANCE FOR GOOGLE TO SAY "THIS IS
WHAT ANDROID IS". WITH 2016 WELL
UNDERWAY, WE'RE LOOKING FORWARD
TO THE NEXT NEXUS, IN A YEAR THAT'S
RUMOURED TO BE BRINGING SOME BIG
CHANGES AND INTRODUCING TWO NEW
NEXT HANDSETS, OR PIXEL HANDSETS AS
THE RUMOURS ARE SUGGESTING.
 KEY ASPECTS OF FIVE FORCES
ANALYSIS
1. USE AT THE LEVEL OF STRATEGIC BUSINESS UNITS (SBU)
2. DEFINE THE INDUSTRY/MARKET/SECTOR
3. DON’T JUST LIST THE FORCES: DERIVE IMPLICATIONS FOR INDUSTRY/ORGANISATION
NOTE CONNECTIONS BETWEEN COMPETITIVE FORCES AND KEY DRIVERS IN THE MACRO
ENVIRONMENT

4. ESTABLISH INTERCONNECTION BETWEEN THE FIVE FORCES

5. COMPETITION MAY DISRUPT THE FORCES RATHER THAN ACCOMMODATE THEM

 CRITICISM OF PORTER FIVE
•
FORCES
LOOK AT THE INDUSTRY RATHER THAN INDIVIDUAL FIRM’S RESOURCES AND
• CAPABILITIES
• NOT A DYNAMIC MODEL/FRAMEWORK
HOW DO WE DEFINE AN INDUSTRY? ARE THERE ANY OTHER WAYS OF
IDENTIFYING DIRECT
COMPETITORS?
SOURCE: BESANKO ET AL. (2004) THE ECONOMICS OF STRATEGY, 3RD EDITION, HOBOKEN NJ: JOHN WILEY &
SONS INC
THE OBJECTIVES OF INDUSTRY
ANALYSIS
• TO UNDERSTAND THE KEY DRIVERS IN BOTH THE MICRO ENVIRONMENT
• TO HOW INDUSTRY STRUCTURE DRIVES COMPETITION, WHICH DETERMINES
THE LEVEL OF
INDUSTRY PROFITABILITY
•
• TO ASSESS AREA OR INDUSTRY ATTRACTIVENESS
TO FORMULATE STRATEGIES TO CHANGE INDUSTRY STRUCTURE TO IMPROVE
• INDUSTRY PROFITABILITY
TO IDENTIFY KEY SUCCESS FACTORS
KEY SUCCESS
FACTORS
•CONSIDER THE FOLLOWING QUESTIONS:
•WHAT DO THE CUSTOMERS WANT?
•HOW CAN THE FIRM SURVIVE
• HOW CAN THE FIRM DIFFERENTIATE ITS
COMPETITION?
OFFER?

• HOW CAN WE OBTAIN A SUPERIOR COMPETITIVE

• POSITION? HOW CAN WE COUNTER THE KEY FIVE
FORCES ELEMENTS?
 EXTERNAL ANALYSIS:
OPPORTUNITIES AND THREATS
(SWOT)
ANALYSING THE DYNAMICS OF THE INDUSTRY IN
WHICH AN ORGANISATION COMPETES TO HELP
IDENTIFY:
Opportunities Threats
Conditions in the environment a Conditions in the environment
company can take advantage endanger the integrity and
of to become more profitable profitability of the company’s
business
 THE RIGHT APPROACH TO
INDUSTRY/EXTERNAL ANALYSIS
•MOST EFFECTIVE WAY TO APPROACH EXTERNAL ANALYSIS–OR ANY
ANALYSIS–IS BY
USING• SCIENTIFIC METHOD.DATA AND THEN ‘DOING THE ANALYSIS’, IDENTIFY THE STRATEGIC
INSTEAD OF COLLECTING
PURPOSE AND KEY QUESTIONS
• FOR E.G., WHERE ARE THE MOST ATTRACTIVE OPPORTUNITIES TO INCREASE THE COMPANY’S

•WHENPROFITS?
PERFORMING MACRO-LEVEL ANALYSIS, KEEP FOCUS ON YOUR
INDUSTRY
CHOICEFOR E.G., PESTEL ANALYSIS FOR GROCERY INDUSTRY WILL HAVE A DIFFERENT FOCUS TO STEEL
INDUSTRY
•WHEN CARRYING OUT INDUSTRY-LEVEL ANALYSIS, THE FOCUS IS ON
RELEVANT
POSITION OF THE FIRM WITHIN THE INDUSTRY.
 SUMMA
• FORECASTING INDUSTRY RY
PROFITABILITY
• PAST PROFITABILITY A POOR INDICATOR OF FUTURE PROFITABILITY
• IF WE CAN FORECAST CHANGES IN INDUSTRY STRUCTURE WE CAN PREDICT THE LIKELY IMPACT ON COMPETITION AND
PROFITABILITY
• STRATEGIES TO IMPROVE INDUSTRY
PROFITABILITY
• WHAT STRUCTURAL VARIABLES ARE DEPRESSING PROFITABILITY?
• WHICH CAN BE CHANGED BY INDIVIDUAL OR COLLECTIVE STRATEGIES?

• DEFINING INDUSTRY
BOUNDARIES
• KEY CRITERION: SUBSTITUTION
• THE NEED TO ANALYSE MARKET COMPETITION AT DIFFERENT LEVELS OF AGGREGATION (DEPENDING ON THE
ISSUES BEING CONSIDERED)

• KEY SUCCESS FACTORS

• STARTING POINT FOR THE ANALYSIS OF COMPETITIVE
ADVANTAGE