1.

Remote Environment

Economic Factors
• Concern the nature and direction of economy in
which a firm operates
• Types of factors
• General availability of credit
• Level of disposable income
• Propensity of people to spend
• Prime interest rates
• Inflation rates
• Trends in growth of gross national product
 Social Factors

• Beliefs, values, opinions, and lifestyles of

people
• Recent social trends
• Entry of large numbers of women into labor
market
• Accelerating interest of consumers and
employees in quality-of-life issues
• Shift in age distribution of population
 Political Factors

• Define legal and regulatory parameters

within which firms must operate
• Types of factors
– Free-trade agreements
– Antitrust laws
– Tax programs
– Minimum wage legislation
– Pollution and pricing policies
– Administrative jawboning
 Technological Factors

• Focus on technological changes affecting

industry
• Types of changes
• New products
• Improvements in existing products
• Manufacturing and marketing techniques
• Role of technological forecasting
• Foresees advancements and estimating their impact
on organization’s operations
• Alerts managers to impending challenges and
promising opportunities
 Ecological Factors

• Ecology refers to the relationships among

human beings and other living things and air, soil,
and water
• Current concerns
• Global warming
• Loss of habitat and biodiversity
• Air, water, and land pollution
• Responsibilities of firms
• Eliminating toxic by-products of current manufacturing
processes
• Cleaning up prior environmental damage
 2. Industry Environment
1.企業本身與同業直接競爭者間的競爭強度
(Rivalry Determinants)
同產業的廠商數目
同產業廠商間的市場佔有率
同產業廠商間的市場成長率
同產業廠商間產品的差異性 4.來自潛在進入者的威脅力
同產業廠商間該產品的成本結構 Economies of scale
同產業廠商間該產品的轉換成本 Product differentiation
同產業廠商間該產品的品牌強度 Capital requirements
同產業廠商間該產品的利潤空間 Cost advantages independent of size
同產業廠商間該產品的客戶群結構 Access to distribution channels
該產業之產業集中度 Government policy
該產業之進入障礙
……

2.來自供應商的議價能力
(Suppliers Bargaining Power) 3.買主的議價能力
只有一家 (Buyers Bargaining Power)
是否為少數供應商 可分消費性消耗品與工業性可轉賣品
是否為特殊規格 產品特徵
關鍵性零件 產品價格
… 品牌強度
價格對市場的敏感度
5.替代性產品的威脅力 買主的預算
(Substitution Threat) 購買數量
價值/價格比 買主的喜好
… …
 Competitive Force: Threat of Entry

• Seriousness of threat depends on

• Barriers to entry
• Reaction of existing firms
• Barriers to entry
• Product differentiation
• Capital requirements
• Cost advantages
• Access to distribution channels
• Government policy
 Competitive Force: Suppliers

• A supplier group is powerful if:

• It is dominated by a few companies and is more
concentrated than industry it sells to
• Its product is unique, or differentiated, or has built
up switching costs
• It is not obliged to contend with other products for
sale to industry
• It poses a threat of integrating forward into
industry’s business
• Industry is not an important customer of supplier
group
 Competitive Force: Buyers

• A buyer group is powerful if:

• It is concentrated or purchases in large volume
• Products purchased from industry are standard or
undifferentiated
• Products purchased from industry form a component
of its product, representing a significant fraction of its
cost
• It earns low profits, creating incentives to lower its
costs
• Industry’s product is unimportant to quality of buyers’
products or services
• Industry’s product does not save buyer money
• Buyer poses credible threat of integrating backward
 Competitive Force: Substitute Products

• Relevance of substitutes
• By placing a ceiling on prices charged, they limit profit
potential of an industry
• Substitutes deserving the most attention are
those
• Subject to trends improving their price-performance
trade-off with the industry’s product
• Produced by industries earning high profit
 What Causes Rivalry to be Intense?
競爭力越高,利潤被瓜分的越多

• Numerous competitors or they are roughly

equal in size and power
• Slow growth in industry
• Product lacks differentiation or switching costs
• High fixed costs or perishable product
• Capacity normally augmented in large
increments
• High exit barriers
• Rivals are diverse in strategies, origins, and
“personalities”
 3. Operating Environment

The operating environment comprises factors in the

competitive situation that affect a firm’s success in
acquiring needed resources or in profitably
marketing its goods and services
 Factors in the Operating Environment

• Firm’s competitive position

• The composition of its customers
• Its reputation among suppliers and creditors
• Its ability to attract capable employees
 Constructing competitor profiles

• Market share • Financial position

• Breadth of product line • Relative product quality
• Effectiveness of sales • R&D advantages position
distribution • Caliber of personnel
• Proprietary and key-account • General images
advantages • Customer profile
• Price competitiveness • Patents and copyrights
• Advertising and promotion • Union relations
effectiveness • Technological position
• Location and age of facility • Community reputation
• Capacity and productivity
• Experience
• Raw material costs
 III. Internal Analysis

• Resource-based View of the Firm

• Value Chain Analysis
• SWOT Analysis
• Internal Analysis: Making Meaningful
Comparisons
What is the Resource-based View of the Firm?

Firms differ in fundamental ways because

each firm possesses a unique “bundle” of
resources – tangible and intangible assets
and organizational capabilities to make use
of those assets.
 The Three Basic Resources
• Tangible assets
• Easiest to identify and often found on a firm’s balance sheet
• Include physical and financial assets
• Examples: production facilities, raw materials, financial resources
• Intangible assets
• Cannot be seen or touched
• Often very critical in creating competitive advantage
• Examples: brand names, company reputation, company morale
• Organizational capabilities
• Involve skills – ability to combine assets, people, and processes –
used to transform inputs into outputs
 What Makes a Resource Valuable?

• Competitive superiority: • Appropriability: Who

Does the resource help actually gets the profit
fulfill a customer’s need created by a resource?
better than those of the
firm’s competitors? • Durability: How rapidly
• Resource scarcity: Is will the resource
the resource in short depreciate?
supply? • Substitutability? Are
• Inimitability: Is the other alternatives
resource easily copied or available?
acquired?
 Isolating Mechanisms

• Physically unique resources

• Resources virtually impossible to imitate
• E.g., one-of-a-kind real estate location, mineral rights,
patents
• Path-dependent resources
– Resources that must be created over time in a manner that
is often expensive and difficult to accelerate
– E.g., Dell Computer’s system of direct sales of customized
PCs via the Internet, Coca-Cola’s brand name, Gerber
Baby Food’s reputation for quality
 Isolating Mechanisms

• Causal ambiguity
• Situations where it is difficult for competitors to
understand how a firm has created its advantage
• E.g., Southwest Airlines’ approach
• Same plane, routes, gate procedures, number of
attendants
• Culture of fun, family, and frugal yet focused service
• Economic deterrence
• Involves large capital investments in capacity to
produce products or services in a given market that are
scale sensitive
 Resource Inimitability
(Adapted)

• Easy to imitate
• Cash, commodities
• Can be imitated (but may not be)
• Capacity preemption, economies of scale
• Difficult to imitate
• Brand loyalty, employee satisfaction, reputation for
fairness
• Cannot be imitated
• Patents, unique locations, unique assets
 Key Resources Across Functional Areas
(Selected)

Marketing Financial and Accounting

• Firm’s products/services • Ability to raise short-term
• Concentration of sales in a few and long-term capital; debt-
products or a few customers equity
• Ability to gather needed • Corporate-level resources
information about markets • Cost of capital relative to
• Market share competitors
• Product-service mix and • Tax considerations
expansion potential • Relations with owners,
• Channels of distribution investors, and stockholders
• Effective sales organization • Leverage position
• Cost of entry and barriers to
entry
 (contd.)

Personnel
Production, Operations,
Technical • Management personnel
• Raw materials cost and • Employees’ skills and morale
availability, supplier • Labor relations costs
relationships compared to competitors
• Inventory control systems • Efficiency and effectiveness of
• Location, layout, and use of personnel policies
facilities • Effectiveness of incentives
• Economies of scale used to motivate performance
• Technical efficiency of facilities • Ability to level peaks and
valleys of employment
• Effectiveness of subcontracting
use
• Degree of vertical integration
 (contd.)

Quality Management Information Systems

• Relationships with suppliers, • Timeliness and accuracy of
customers information about sales,
• Internal practices to enhance operations, cash, and
quality of products and suppliers
services • Relevance of information for
• Procedures for monitoring tactical decisions
quality • Information to manage quality
issues, customer service
• Ability of people to use
information provided
 (contd.)

Organization and General Management

• Organizational structure
• Firm’s image and prestige
• Firm’s record in achieving objectives
• Organization of communication system
• Organizational climate and culture
• Use of systematic procedures in decision making
• Top management skills, capabilities, and interest
• Strategic planning system
• Intra-organizational synergy
What is a Value Chain?

The term value chain describes

a way of looking at a business
as a chain of activities that
transform inputs into outputs
that customers value
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