1. EXTERNAL ENVIRONMENT ANALYSIS (Competitive analysis)

2. Competitive Forces
Seven Characteristic describe the most competitive companies :
Market share matters
Understand and remember precisely what business you are in ?
Whether it’s broke or not, fix it. Make it better not just product but the whole company if necessary
Innovate or evaporate, particularly in technology-driven businesses
Acquisition is essential to growth\
People make a difference
There is no substitute for quality and no greater threat than failing to be cost competitive on a global basis.

3. Key Question about Competitors
What are the major competitor’s strength ?
What are the major competitor’s weaknesses
What are the competitor’s objective & strategies ?
How will the major competitors most likely respond to current economic, social, cultural, demographic, environmental, political, governmental, etc
How vulnerable are the major competitor to our company’s strategies ?
How vulnerable are our alternative strategies to success ful counterattack by our major competitors ?
How are our product or service positioned relative to major competitors ?
To what extend are new firms entering and old firms leaving this industry ?
What key factor have resulted in our present competitive position in this industry ?
What is the nature of suppliers and distributors relationship ?

4. Competitive Intelligence Programs
Competitive Intelligence (CI), as formally defined by the Society of Competitive Intelligence Professional (SCIP), is a systematic and ethical process for gathering and analyzing information about the competition’s activities and general businesses trend to further a business’s own goals
Three strong misperception about CI
Running an Intelligence program requires lot of people, computer and other resources.
Collecting intelligence about competitors violate antitrust laws, business intelligence equals espionage
Intelligence gathering is an unethical practices

5. Competitive Analysis : Porter’s Five Forces Model
Industry growth
Fixed (or storage) cost / value added
Intermittent over capacity
Product differences
Brand Identity
Switching Cost
Concentration and balance
Informational complexity
Diversity of competitors
Corporate Stakes
Exit Barriers
Entry Barriers
Economic of scales
Proprietary product
Brand Identity
Switching cost
Capital requirement
Access to distribution
Absolute cost advantage
Governmental policy
Expected Retaliation
Rivalry Determinant
New Entrants
Threat of
New Entrants
Industry Competitors
Bargaining Power
Of Suppliers
Bargaining Power
Of Buyers
Suppliers
Buyers
Intensity of
Rivalry
Determinant of Suppliers Power
Bargaining Leverage
Bayer concent’ vs firm concent’
Buyer Volume
Buyer switching cost vs firm switching cost
Buyer information
Ability to backward integrate
Substitute product
Price Sensitivity
Price / Total purchase
Product difference
Brand Identity
Impact on quality perf’
Buyer’s profit
Decision maker incentives
Determinant of Buyers Power
Differentiation of inputs
Switching Cost
Presence of substitute inputs
Supplier concentration
Importance of volume to supplier
Cost relative to total purchase
Impact of inputs on cost or differentiation
Threat of forward integration relative to threat of backward integration by firms in the industry.
Threat of
Substitutes
Subtitutes
Relative price performance of substitute, switching cost, Buyer propensity to substitute

6. External Factors Evaluation (EFE)
EFE matrix allowed strategist to summarized and evaluate the external factors.
5 steps to make EFE
List key external factors as identified
Assign each factor a weight that range from 0 (not important) and 1.0 (very important)
Assigned rating between 1-4 to indicate how effectively the firms current strategies to response
Multiply each factor’s weight by its rating to determine a weighted score
Sum the weighted score to determine the total weighted score of the organization

7. EFE

8. External Threat and Opportunity Profile

9. Competitive Profile Matrix (CPM)
The CPM identifies a firm’s major competitor and its particular strength and weaknesses.
CPM include both external and internal factors the rating refer : 4 = major strength, 3 = minor strength, 2 = minor weaknesses, 1 = major weaknesses
The critical success factors are broader

10. Critical Success Factors
An Example CPM
Critical Success Factors
Weight
Company 1
Company 2
Company 3
Rating
Score
1. Advertising
0,20 1 4
0,80 3
0,60
2. Product Quality
0,10
0,40
0,30 2
3. Price Competitiveness
4. Management
5. Financial Position
0,15
0,45
6. Customer Loyalty
7. Market Share
1,00
3,30
2,55
2,65
Pelajari CPM yang lain di hal. 114

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