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Subject Name: Business Strategy Topic Name(s) : Industry Analysis Lecture No: 16

This document provides a framework for analyzing industries by examining various influences including demographic, macroeconomic, governmental, new entrants, suppliers, customers, substitutes, and technology. It discusses Porter's five forces model for analyzing the intensity of competition within an industry by evaluating the threat of new entrants and existing rivals. Specific factors are identified for assessing barriers to entry, industry concentration, capacity levels, market share stability, and the industry life cycle stage. Limitations of life cycle analysis from technological, demographic, regulatory, and social changes are also noted.

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30 views

Subject Name: Business Strategy Topic Name(s) : Industry Analysis Lecture No: 16

This document provides a framework for analyzing industries by examining various influences including demographic, macroeconomic, governmental, new entrants, suppliers, customers, substitutes, and technology. It discusses Porter's five forces model for analyzing the intensity of competition within an industry by evaluating the threat of new entrants and existing rivals. Specific factors are identified for assessing barriers to entry, industry concentration, capacity levels, market share stability, and the industry life cycle stage. Limitations of life cycle analysis from technological, demographic, regulatory, and social changes are also noted.

Uploaded by

SANKET GANDHI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Subject Name: Business Strategy

Topic Name(s): Industry Analysis


Lecture No: 16

Suman Choudhary,
ISBM

08/23/2020 Lecture Number, Unit Number 1


Industry Analysis

BASICS

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Framework for Industry Analysis
A Framework for Industry Analysis
Governmental Influences
Demographic Influences Macroeconomic Influences
(regulatory, political, legal)
(stage of business cycle, longer term growth, and structural economic trends)

New Entrant Threats

Economic
Sector
Group of Complementary Industries
Industry
Supplier Bargaining Forces Customer Bargaining Forces
(affected by number of industries Internal Competitive Forces (affected by number of suppliers,
buying suppliers’ products, of (affected by economies of scale, cost advantages, other number of purchasers, their
supply substitutes, switching brand loyalty, customers’ switching costs, product size/power, switching costs to
costs of suppliers’ customers, government regulation, industry’s competitive structure, other suppliers, number of
industry, and customers’ ability corporate rivalries, cost conditions, entry and exit barriers) contracted suppliers, customers’
to enter industry.) Life Cycle Analysis ability to produce the product
(embryonic, growth, shake-out, mature, declining) themselves)
Business Cycle Sensitivity
(cyclical: leading, lagging, coincident; defensive, growth)
Analysis by Position on the Experience Curve

Product / Service Substitution Threats

Technological Influences Social Influences

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Strategic Analysis: Porter’s “Five Forces” Framework

Threat
Threat of
of New
New Entrants
Entrants First focus for
analysis

Bargaining
Bargaining Bargaining
Bargaining
Power
Power of
of Intensity
Intensity of
of Power
Power of
of
Suppliers
Suppliers Rivalry
Rivalry Customers
Customers

Threat
Threat of
of Substitute
Substitute Products
Products

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Evaluating the Threat of New Entrants and the Level of
Competition
What are the barriers to entry?

How concentrated is the industry?

What are capacity levels?

How stable are market shares?

Where is the industry in its life cycle?


How important is price to the customer’s purchase
decision?

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Barriers to Entry

Potential for Sustainable


High Barriers
Greater Pricing Economic
to Entry
Power Profits

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Industry Concentration
What percentage of
the market does each
of the largest players
have?

ABCCompany
MNO
XYZ Company
Company

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Industry Capacity
Tight or Greater
Limited Pricing
Capacity Power

Demand
Exceeds
Supply

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Market Share Stability
Unstable
Market
Share

Limited
Pricing
Power

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Industry Life Cycle

Source: Based on Figure 2.4 in Hill and Jones (2008).

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Limitations of Industry Life-Cycle Analysis

Technological
Changes

Demographic Regulatory
Changes Changes

Social
Changes

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