Chapter 6 Analyzing Global Industry and Competitors John S. Hill.
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Transcript of Chapter 6 Analyzing Global Industry and Competitors John S. Hill.
Chapter Outline
IntroductionWorldwide Industry AnalysisGlobal Competitor AnalysisUsing Market Opportunity and Competitive Analyses to Craft Global Strategies
Figure 6-1: Global Analyses of Industries and
Competitors Worldwide Industry AnalysisIndustry DemandSupply ChainsStructureIndustry Change DriversFinancial BenchmarksKey Success Factors
Competitor AnalysesGlobal, Regional Sales & Market DependenciesSupply Chain Deployments & TrendsStrategic Thrusts
Inputs into Strategic Planning Process (Chapter 7)
Worldwide Industry Analysis
Evaluation of Worldwide Market Demand
Assessing Industry Supply Chains
Industry Structure Drivers of Industry
Change Financial Benchmarks Key Success Factors
Worldwide Industry Analysis
Evaluations of Worldwide Market Demand Global Industry Demand, worldwide sector demand over time
for regions and countries Export Market Demand: uses national export statistics to locate
markets which can be accessed from a given country base Nations Trade Data Yearbook, this source uses a different
product classification (the standard international trade classification—SITC); shows which nations import specific products
Table 6.2 Global Consumption and Production Trends: Machine Tool Industry (page 209)
Table 6.3 Deriving Harmonized System Product Codes: Computers and Components (page 210)
Table 6.4 Top 25 U.S. Annual Exports of Automatic Data Processing Machines (page 211)
Worldwide Industry Analysis
Assessing Industry Supply Chains Locating Import Sources of Supply, the same databases as
the exporting analyses; import statistics show which nations are competitive sellers into a given market
Manufacturing Site Assessment: shows which countries build up expertise in particular sectors. US in computer software, Japan in consumer electronics, etc.
Table 6.5 United Nations Trade Data: Imports/Exports (page 212)
Table 6.6 Top 25 U.S. Annual Imports of Cellular Phones (page 213): shows top foreign sources for US market
Table 6.7 Global Profile: Communications Equipment Industry (page 214): market size, growth, structure, demand drivers, supply chain aspects, profitability, KSFs
Worldwide Industry Analysis
Industry Structure Identifies dominant firms in particular
industries: nationalities, sizes, influence Industry structures are becoming more global
as mergers and acquisitions, particularly among major players (‘mega-mergers’) are increasingly affecting industry competitive landscapes.
Table 6.8 Global Profile: Household Non-Durables Industry (page 215): dominant Unilever and P & G
Worldwide Industry Analysis
Drivers of Industry Change Political Trends Global Change: WTO and IMF improve worldwide
infrastructures and payments mechanisms; increasing numbers of nations are adopting democratic institutions; and more markets adopt capitalism and open up
Regional political trends: trade blocs increase and firms look to multi-market brands and supply chains
National elections and changes in political and economic agendas are constant sources of political uncertainty
Worldwide Industry Analysis
Drivers of Industry Change Economic Trends Global economic growth affects industry global
demand Regional economic growth affects how firms
allocate resources among worldwide operations National economic growth affects country
industry demand and affects national sales goals, manufacturing capacity plans and demand management for individual countries
Worldwide Industry Analysis
Drivers of Industry Change Societal Trends National industrialization efforts: create
demand for new types of financial services, industrial products, consumer products (education, healthcare, brands, labor-saving products)
Societal Priorities: At the regional and country levels, national governments push issues onto corporate agendas (conservation, recycling, rural development, transportation)
Worldwide Industry Analysis
Drivers of Industry Change Technological Trends Societal Effects Religion: reliance on technologies reduces religiosity and
provides new media outlets for alternative viewpoints Demographics: human longevity enhanced; graying of
national populations Education: internet makes vast knowledge bases available Popular Culture: new international media, products and
services have made global icons out of people and brands Company Effects Internet Technologies: gives the public access to companies
via their websites
Worldwide Industry Analysis
Drivers of Industry Change Technological Trends Customer access: internet creates opportunities for
personalized customer relationships Supply chains: suppliers have technological interfaces
with manufacturers, distributors and customers Global Market Access via websites give small companies
opportunities to trade worldwide Human resource needs have changed from financial
capital to human intellectual capital The intranet, makes information and data increasingly
accessible within companies Global financial resource availability has been enhanced
Worldwide Industry Analysis
Financial Benchmarks are important indicators of the industry attractiveness and competitiveness
Key Success Factors (KSFs): strategic expertise, competencies, resources, and competitive capabilities
Global Competitor Analyses
Uses of Global Competitor Analyses
Internal Assessments
External Assessments: Analyzing Competitor Operations
Global Competitor Analyses
Uses of Global Competitor Analysis GCA provides insights into rivals’ strategies and enable
companies to:
Outwit Rivals - detect marketplace changes more quickly than competitors
Outmaneuver Rivals - Being the first to introduce new products and technologies
Outperform Rivals - In terms of new product development, market share, customer satisfaction levels and corporate reputation
Global Competitor Analysis
Internal Assessments Corporate missions: provide overviews of
corporate priorities in terms of products, markets, technology, and corporate culture
Strategic intents: relate to long-term competitive aspirations
Core competencies: are articulations of what companies do better than others – their acknowledged expertise vis-à-vis the rest of the industry: innovation styling, value
Global Competitor Analyses
External Assessments: Analyzing Competitor Operations
Total sales and regional breakdowns show current revenue streams of competitors and regional sales dependencies
Global demand analyses show recent sales trends in specific regions and product areas
Supply Chain Strategy: the efforts firms are making to streamline purchasing, manufacturing, and distribution activities on a worldwide basis
Strategic initiative analyses: highlight management priorities in market expansion efforts
Global Competitor Analyses
External Assessments: Analyzing Competitor Operations Table 6.9 Competitive Profiles: Unilever and Proctor
& Gamble (page 222)—total, regional sales, supply chain and new strategic initiatives
Figure 6.2 Global/Regional Analysis of Principal Competitors (page 223): sales, market shares, strengths, weaknesses
Figure 6.3 Intra-Regional Analyses of Individual Competitors (page 223): regional analysis by country
Figure 6.4 Geographic evaluations of competitor supply chains (page 224): R & D, materials, manufacturing, sales
Using Market Opportunity and Competitive Analyses to Craft Global
Strategies Market Selection
Strategies
Competitive Effects on Strategic Decision-Making
Using Market Opportunity and Competitive Analyses to Craft Global
Strategies Market Selection Strategies Large international companies routinely
monitor market sizes and growth rates in over 150 national markets: large markets and markets with potential are always priorities
Smaller companies may be more selective to avoid head-to-head competition
Table 6.10 Market Size/Growth and Investment Priorities (page 225): divisions into large, medium, small, and growth, stable and declining markets
Using Market Opportunity and Competitive Analyses to Craft Global
Strategies Competitive Effects on Strategic Decision-Making Companies must not only satisfy customers but out-
compete market rivals Market challengers must be careful how they attack strong
market leaders; but few firms are strong everywhere Smaller companies lacking global reach or resources can
use acquisitions, joint ventures or global alliances to attack larger competitors
Large companies can use superior brand names, corporate reputations, cost structures, and technologies to attack weaker competitors
Table 6.11 Global Industry and Competitor Analysis Inputs into Strategy-Crafting and Decision Making (page 226)
Key Points
Analyzing industries on a worldwide scale
Evaluation of market demand
Industry supply chains Industry structure Industry change
drivers Financial benchmarks Analyses of global
competitors
Key Points
Analyzing industries on a worldwide scale has become essential as companies and industry sectors have expanded their global presences throughout international markets.Worldwide industry analyses starts with evaluations of worldwide and regional market demand and demand within individual countries. Export market demand should also be assessed using national and international trade statistics.
Key Points
Industry supply chains can be analyzed to assess international sources of supply, national expertise in manufacturing, and global distribution patternsIndustry structure analyses shows leading companies in particular sectors. Firms can then isolate individual rivals for in-depth competitor analyses of sales and supply chains
Key Points
Industry change drivers should be examined, including trends in global, regional, and national political and economic environments, societal and technological trends.Financial benchmarks are provide guidelines for corporate assessment of business divisions and subsidiariesKey success factors evaluate where to focus corporate efforts: “what they must do well” to be successful in their industry