Logistik und Management

(1)

Logistik und Management

12. Vorlesung

on

(2)

Fachhochschule Lausitz University of Applied Sciences

Prof. Dr. Wilhelm Produktionswirtschaft

(3)

Strategie 1

Einführung: Strategie Wettbewerbsdynamik

Modell der fünf Wettbewerbskräfte

(4)

(5)

1

(6)

What is Strategy?

(7)

• Strategic decisions have a long term performance impact

• Strategic decisions v. Tactical decisions

• What is long term?

• Time horizon varies by industry (3-5 yrs.)

• What is performance?

• Profit: Accounting v. Economic

• Success: Market share, well being

• Wealth: MVA; Dividend history; EPS

• Consequential: Cascading effect

• Chrysler/Benz; Citibank/Travelers

• Rare

(8)

Is Strategy really important?

• The automobile industry

• Chrysler/ Benz

• Nissan

• General Motors

• The steel industry

• U.S. steel v. Japan

• NUCORv. USX

• The dotcom businesses

• RCA in liquid crystal displays

• Sears Roebuck

(9)

(10)

Disciplinary foundations of Strategy

Competitive strategy evolved from several fields

• Industrial organization economics

• Organization Theory

• Sociology

• Financial Economics

• Marketing

• Operations Research

• History and anthropology

2 2

(11)

Fachhochschule Lausitz

University of Applied Sciences Prof. Dr. Wilhelm

Produktionswirtschaft

(12)

Alternative conceptualizations of strategy

• Strategy as the product of rational planning

• Strategy as an intuitive response

• Logical incrementalism

• Deterministic

(13)

University of Applied Sciences Prof. Dr. Wilhelm

Produktionswirtschaft

(14)

The Strategy Process

3 3

(15)

External Environment (O/T)

Internal Environment (S/W)

Formulation Implementation

—*\ Mission |

—*\ Objectives |

—*\ Strategy |

Evaluation/

Control

(16)

Corporate Industry is the source of competitive advantage

Business Internal resources provide competitive advantage

Functional Efficient and effective resource utilization is the source of advantage

(17)

(18)

Where are we headed?

• Why do some firms succeed when others fail?

• What are the fundamental principles leading to sustainable competitive advantage?

• How do resource acquisition and management decisions impact the success of strategy?

• How do domain and scope decisions influence strategy outcomes?

• How is corporate governance related to the

strategy process?

(19)

(20)

4

(21)

Key Topic Areas

• Dynamics of competition within industries

• Resource based view of the firm

• Cost and differentiation as the bases of competitive advantage

• Corporate strategy and the scope of a firm

• Corporate governance

(22)

(23)

Strategie 1

Einführung: Strategie Wettbewerbsdynamik

Modell der fünf Wettbewerbskräfte

(24)

(25)

Competitive Dynamics:

Understanding Industries

• Environmental Analysis

• Macro Environment Analysis

• National Competitiveness Analysis

5 5

(26)

(27)

The Levels of Environmental Analysis

Industry Environment

(28)

The Macro Environment

• The focus of a macro environmental analysis is primarily to understand the "context"

Economic forces Socio-cultural forces Political-legal forces Technological forces

• Are there any systematic sources of country specific competitive advantage that can be leveraged?

6 6

(29)

Prof. Dr. Wilhelm Produktionswirtschaft

(30)

Determinants of National Competitiveness

Factor Conditions

(31)

Demand Conditions

Related and Supporting

Industries

(32)

University of Applied Sciences Firm strategy,

Structure and Rivalry

M.E. Porter (1990)

(33)

Strategie 1

Einführung: Strategie Wettbewerbsdynamik

Modell der fünf Wettbewerbskräfte

7 7

(34)

(35)

Competitive Dynamics within Industries

Threat of EntrantsNew

Power of

1

Suppliers Rivalry

among competitors

«

—

Power of Buyers

I

Threat of Substitutes

(36)

M. Porter (1980)

(37)

8

(38)

The Threat of New Entrants

Barriers to Entry:

•

Economies of scale are significant

•

Product differentiation is a major selling feature

•

High capital requirements

•

Customers incur significant switching costs

•

Limited access to distribution channels

•

Existing firms have cost advantages independent of scale

•

Extensive government regulation

(39)

(40)

The Threat of Substitution What are substitutes?

• Meet the same customer needs

• Two products or services that perform the same general function

Threat of substitution is high if...

Product demand is price elastic

• Rate of change in price v. rate of change in demand Price-performance tradeoff is unfavorable

• Incremental cost v. incremental performance

(41)

(42)

Pressure from Buyers

Buyers will have power if...

• There are fewer buyers than suppliers

• Buy in large quantities

• Product is standard

• Switching costs are low

• Can integrate backwards

• Have full information on costs of the product or service

9 9

and Suppliers

. Suppliers will have power if....

• There are fewer suppliers than buyers

• Buyer industry is relatively small

• Product is differentiated

• Switching costs are high

• Can integrate forward

(43)

Intensity of Rivalry will be High if...

• There are equally balanced competitors - Hi concentration

• Industry growth rate is slow

• The industry is characterized by high fixed/storage costs

• The products lack differentiation or switching costs

• Industry capacity is augmented in large increments

• Industry has high exit barriers

• The players have high strategic stakes - Cross-subsidization

(44)

(45)

10