PRUEBA

STRATEGY TOOLS-A PERSPECTIVE

Team Prueba

PORTERS FIVE FORCES MODEL

Useful to find the attractiveness of the market

or profitability

All the parameters can be mapped

A viable business model can be developed

PORTERS FIVE FORCES MODEL

TELECOM INDUSTRY ANALYSIS

New Entrants Medium

--Wireless Spectrum-main entry

barrier

--Huge Capex; long breakdown period

--Mobile Virtual Network Operators

--Voice over Internet Protocol players

Supplier Power-Medium

--Network Equipment & Tower

companies have low bargaining

power

--Content & handset providers

has high bargaining power

Buyer Power-High

--Customers has many options

--Low switching cost

--Strong trend towards prepaid

--High churn rate

Substitutes-High

--VOIP & Instant Messaging over

mobile

--Alternate technology over WIMAX

--Broadband & VOIP services from

other players

Rivalry-High

--New products/Services are

replicable easily

--Difficult to differentiate

--Fierce price war

BCG MATRIX

Its a portfolio

management tool used

in Product Lifecycle.

Y axis= Market Growth

Rate

X axis= Relative Market

Share (wrt the Largest

Competitor) >0

BCG MATRIX

Stars= (High Growth, High Market

Share)Leaders in their segment

Question Marks= (High Growth, Low Market

Share)..Either heavily invest or sell

Cash Cows= (Low Growth, High Market

Share)low promotional expenses, high return

Dogs= (Low Growth, Low Market

Share)Expensive turn around plans, Kill

DISADVANTAGES:

Market share is not the only success factor

Market Growth rate is not the only

attractiveness factor

Model neglects synergy/relationship between

the products

GE MATRIX

GE MATRIX

The aim of a portfolio analysis is to:

1. Analyze its current business portfolio and decide

which SBU's should receive more or less

investment.

2. Develop growth strategies for adding new

products and businesses to the portfolio

3. Decide which businesses or products should no

longer be retained

GE MATRIX

Industry Attractiveness The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is determined by factors such as the following:

Market growth rate

Market size

Demand variability

Industry profitability

Industry rivalry

Global opportunities

GE MATRIX

Business Unit Strength The horizontal axis of the GE / McKinsey matrix is the strength of the business unit. Some factors that can be used to determine business unit strength include:

Market share

Growth in market share

Brand equity

Distribution channel access

Production capacity

Profit margins relative to competitors

GE MATRIX-AN EXAMPLE FACTORS AFFECTING

MARKET ATTRACTIVENESS

WEIGHT

RATING

SIZE

REASONS

Overall Market Size

0.3

4.5

1.35

4.2 Lakh Crore

Annual Market Growth Rate

0.2

3

0.6

21% Growth Rate YOY

Competitive Intensity

0.2

1

0.2

In India, MF industry manages nearly 700 schemes

Major competitors are Reliance Power,Banking funds

and UTI

Market Penetration

0.1

2

0.2

8%

Consumer Awareness

0.2

3

0.6

On average, consumers awareness of the investment

related brands went up from 12.9 brands last year to

18.5 brands

TOTAL 1 2.95

GE MATRIX-AN EXAMPLE

Three Strategies: GROW, HOLD, DIVEST

SWOT ANALYSIS

Strengths

-Unique Product

-Location of your business

-Workers unique skill set

-Quality of your product

Weaknesses

-Location of your business

-Lack of quality & customer service

-Poor marketing & Sales

-Undifferentiated product or services

Opportunities

-A new emerging or developing market

(niche product, place- new country, less

competition)

-Merger, joint venture or strategic alliance

Threats

-New competition in the market, possibly

with new products or services

-Price Wars

-Competitor oligopoly or monopoly

-taxation

S,W- internal factors

O,T- external factors

ANSOFF MATRIX

Can be used at any stage of the Product

Lifecycle

ANSOFF MATRIX

Market penetration- Less Risky (existing resources can be used), But limited opportunity

Market Development- Into newer segments of different geographies; moderately risky

Product Development- Useful when the same customer segment is targeted with better product; moderately risky

Diversification- Highest Risk, but highest return also; Requires both product and market development and the company might venture outside its core competency

7 S MODEL

The Seven S's- is important for normal functioning of the org; and when

there is any Change to be implemented

7 S MODEL

Structure: This is more than just the stated hierarchy of the organization. This is the "in practice" hierarchy, too. Is a business focused on the customer? Is it segmented by function? Is it segmented by geography? Is it top heavy with a lot of decision-making executives?

Systems: This is the process through which the company gathers information and makes decisions. If it's effective, a company can react quickly and appropriately to changes in the marketplace. If a company's systems are not adequate, the company stands the risk of being ponderous.

7 S MODEL

Skills: This is the collective skill set of the organization. If

a company determines to hire only people who can

speak two or more languages, they will quickly fill their

ranks with skilled people who allow them to

communicate to other people more effectively. Some

companies in the early growth stages can react to a

need by hiring too many people in one skill category and

run the risk down the road of having a variety of absent

skills. There is no perfect mix, this is a matter of

constantly balancing and rebalancing based on need.

7 S MODEL

Style: This category is about the culture of the company. Is it aggressive? Is it conservative? Is it innovative? Is everyone happy? Does the company feel bloated and unwieldy? Each company has its own style and that style is set by the leadership and supported (or changed) by the mix of staff hired.

Staff: This category, obviously, deals with the people in the organization. It involves not only their skills (mentioned in another S) but also whether or not there are enough (or too many) staff members to do the job as well as the personal and professional goals that each person has.

7 S MODEL

Superordinate goals (which later was appropriately renamed Shared Values):This category talks about the overarching purpose in the organization more specifically, it deals with the real or practiced values and compares them to the stated values. A company, for example, may claim to be customer-centered but in reality it could reward staff for high volumes of sales, encouraging staff to ignore the customer and focus on making their numbers.

Strategy: Strategy deals with tomorrow- what is the company planning on achieving in the future and what are they doing today to prepare for those goals?

NEW BCG MATRIX

NEW BCG MATRIX

Fragmented Industry

This is a industry characterized by many opportunities to create competitive advantage but beach advantage is small

Results Many small firms each

differentiated in their own way

The industry is fragmented into different niches & segments

Examples Service industries such as

restaurants.

Specialized Industry

This is a industry where there are many opportunities for the firm to create competitive advantage that are huge & give a high payoff

Results Large firms with highly

differentiated products

Example Pharmaceutical Industry

NEW BCG MATRIX

Stalemate Industry

This is a industry that produces commodities & is characterized by few opportunities to create competitive advantage with each advantage being small

Result Limited scope for

differentiation

Price is the predominant competitive weapon

Example Steel making, bulk chemicals

Volume industry

This is the industry characterized by few opportunities to create competitive advantage but each is huge with a large payoff

Result Only the largest can sustain

competitive advantage

Industry leaders are the large, low cost producers

Examples Airlines, Soap Manufacturers

GAP MODEL

GAP 1

Gap 1 is interesting in that it highlights a

problem faced by most service organizations

but one that is not always addressed. It is that

the service provider does not accurately know,

understand or appreciate what their customer

expects

GAP 2

Gap two is the difference between a service

providers' perception of clients / users

expectations and the subsequent development

of customer-driven designs and standards. It is

not enough to simply understand clients /

users perceptions, that knowledge must

translate itself to meaningful service offerings

at an appropriate level or to an appropriate

standard.

GAP 3

This is the gap between the service designs

and standards and actual service delivery. In

other words having guidelines, manuals and

well-communicated standards is not enough to

guarantee excellent service. Resources in the

form of people, systems and appropriate

technology also need to be in place and

adequately monitored.

GAP 4

The final gap exists when there is a difference

between actual service delivery and the

external communications and promises made

by the provider. These can be in the form of

leaflets, web pages, presentations and any

other promotional media. Elevated claims or

promises become the standard for setting

expectations and the standard against which

they will be judged.

PRUEBA

PEST ANALYSIS

The model's factors will vary in

importance to a given company

based on its industry and the

goods it produces

Some analysts added Legal and

rearranged the mnemonic to SLEPT;

inserting Environmental factors

expanded it to PESTEL .

STRATEGIC EARLY WARNING SYSTEM

The ideal SEWS process has three phases: Phase 1 is characterised by the information gathering of weak signals, or trends and issues. The

scanning itself relies primarily on examining various media sources, the technique of content analysis

Phase 2 is one of diagnosis, which is characterized by three steps:

In-depth analysis of the trend or issue, examining the core and the various contexts of this phenomenon. The aim is to gain an impression of the possible potential development of an issue or trend. Stakeholder theory may be used to understand actors in a specific industry

The second step has several objectives:

The attempt should be made to think creatively about how the particular trend or issue could evolve.

The nature of the contexts needs to be examined in order to cluster several trends or issues, thus providing an understanding of the mutual influences on and of trends and issues.

It is important, due to the limited resources in any organization, to identify and select those trends and issues that are particularly relevant.

Phase 3 describes the formulation of an appropriate strategy to react to the trends and issues which have been identified and labelled as relevant.