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3. Strategic position Assess the nature of the environment Audit environmental influences Identify key competitive forces Identify key opportunities and threats Identify competitive position Strategic position Steps in environmental analysis

4. Trend extrapolation Decentralisation or Delphy analysis Experience and learning Scenario planning ENVIRONMENTAL CONDITIONS Static Dynamic ENVIRONMENTAL CONDITIONS Simple Complex Approaches to making sense of the environment Strategic analysis

9. Deregulation Digitization / technology Globalization Five-plus forces of competition Other force/s

18. what to do …? 1. Positioning : accept competive structure as given and match yourself to it: .. build defenses against competitive forces .. identify positions where forces are weakest 2. Take the offensive: Influencing the Balance .. identify key factors driving competition that you can control .. influence those costs that yield the greatest payoff 3. Exploiting Change .. understand which trends affect the sources of competition , and forecast the magnitude of each trend and underlaying cause .. construct a picture of the likely profit potential of the industry 4. Set and evaluate diversification potential

21. Mapping Strategic Groups in the U.S. Restaurant Chain Industry Limited menu Full menu Product-Line Price Low High Mc’Donald’s, Taco Bell, Burger King, Hardee’s K.F.C Pizza Hut, Wendy’s Perkins, Int. House of Panckake Red Lobster, Olive Garden Shoney’s, Denny’s Country Kitchen

23. Styling Performance Marque strengths Engineering innovations Build quality Most important Least important Source: D. Faulkner and C. Bowman, The Essence of Competitive Strategy, Prentice Hall, 1995. Car X Competitor A's car Competitor B's car Figure 3.10 Perceived value by customers: the luxury car market Rating 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

26. Industry and Competitive Analysis - Questions Tasks : What is our business ? How do we create value ? What are our organizational and/or technological capabilities ? Who are we in business with ? How is our business/industry changing ? What drives this change ? What are our strengths and weaknesses ? What opportunities open up, and what threats exist ? Competitive & Industry Analysis ("Where do we stand?") Strategy formulation ("Where do we want to go ?") Implementation and Control ("How do we get there?") 1 BBA_Str1v