Strategic Analyses Kevin Krar Krar Consulting SWOT Analysis

Strategic Analyses Kevin Krar – Krar Consulting

SWOT Analysis ● Useful qualitative tool to identity an organization`s strategic position within a market ● Performed in the preliminary stages of decision making ○ Analysis should be conducted within the context of achieving tactical or strategic objectives ● Examines internal and external factors affecting an organization to recognize strategic advantage 2

SWOT Analysis Strengths Weaknesses ● Useful qualitative to identity an organization`s strategic Organizational characteristics thattool contribute to Organizational characteristics that create competitive advantage competitive disadvantage position within a market Relevant Questions: ● your Performed in generate the preliminary of your decision making How does organization value? What stages How does organization generate value? Does factors drive sales? What does your organization do your organization lack any resources? What tasks ○ Analysis should be conducted within the context of achieving better than competitors? What efficiencies does are relatively low benefit and high cost? Do your organizationtactical exploit? or strategic objectives competitors do anything better than your firm? Opportunities Threats Examines internal and external factors affecting an organization Environmental factors that could be exploited for Environmental factors that hinder to recognize strategic advantage ● business/project success Relevant Questions: What trends are affecting your industry? Are consumer behaviours stable or shifting? How could regulatory change affect your business model? Relevant Questions: What trends are affecting your industry? Are there emerging competitors in the market? Are there external risks that could interrupt your value chain? 3

Six Forces Model ● Industry assessment tool developed to identify drivers of profitability and competition ○ Holistic industry view provides contextual information on a firm’s strategy position ● Useful for strategic planning ● Examines forces that determine the overall attractiveness of an industry 4

Six Forces Model Substitute Products New Entrants Buyers Competitiv e Rivalry Complementar y Products Suppliers 5

Six Forces Model Competitiv e Rivalry Substitute Products Competitive rivalry and profitability of an industry is a multi-factor force influenced by the combination of all other forces Threat of substitutes is influenced by number of substitutes available, cross elasticity of demands between substitutes and product & etc. Less threat of substitutes leads to higher competitive rivalry Buyers Suppliers Bargaining power of buyers is influenced by number of customers, elasticity of demand & etc. Bargaining Less bargaining power of buyers leads to higher competitive rivalry power of suppliers is influenced by number of suppliers and the uniqueness of their products & etc. Less bargaining power of suppliers leads to higher competitive rivalry Complementary Products Impact of complementa ry products is influenced by number of complements, cross elasticity of demand between complements and product Higher impact complementa ry products leads to increased competitive rivalry New Entrants Threat of new entrants is influenced by barriers to entry, economies of scale, brand loyalty, government policy & etc. Less threat of new entrants leads to higher competitive rivalry 6

Porter’s Diamond Model ● Institutional analysis examining external competitive environment ○ Becomes increasingly useful as a firm considers entering new operating environments (jurisdictions/cultural boundaries) ● Studies sources of competitive advantage scalable from an institutional (or national) context 7

Porter’s Diamond Model Firm Strategy, Structure, and Rivalry Chance Factor Conditions Demand Conditions Related and Supporting Industries Government 8

Porter’s Diamond Model Chance Encompasses the notion that an enterprise might obtain competitive advantage through pure chance (exogenous shocks)** Does not create lasting competitive advantage Firm Strategy, Structure, and Rivalry Includes firm internal characteristics (strategies and structure) along with competition within a sector Collectively these can be local drivers of innovation and efficiency Factor Conditions Demand Conditions An environment ’s infrastructure, labour force, and natural resources Local demand conditions Categorized into highly specialized resources and natural endowments Provides drivers for growth, innovation, and quality improvement Related and Supporting Industries Governmen t Refers to industries that supply, distribute, or otherwise contribute to the industry being examined A government’ s role in promoting higher levels of competitive performance in their area of influence Clusters of related industries can result in local competitive advantage Arguably does not create lasting competitive advantage*** 9

Contact Krar Consulting Website https: //www. krarconsulting. com/ Email Kevin. Krar@krarconsulting. com 10