1. REVIEW SPEED: What are Porter’s four generic strategies?
What are the four categories of business/product positions in the BCG matrix?

2. Porter’s Competitive Strategies Source of Competitive Advantage
Broad
Cost leadership
strategy
Differentiation
strategy
Market
Scope
Focused
Differentiation
Strategy
Focused low cost
strategy
Narrow
Low price
Uniqueness
Source of Competitive Advantage 2

3. BCG Matrix
High
Market
Growth
Low
Low
High
Market Share

4. Adaptive Strategies Make notes from Text pg. 219-220 Prospector
Defender
Analyzer
Reactor

5. SF
Michael Porter created the 4 Generic Strategies to determine how a business will compete.
The Boston Consulting Group developed the BCG Matrix to determine which products deserve the most attention and resources.
However, a manager must first determine if the industry is even a good place to compete in at all!

6. Porter’s 5 Forces
Michael Porter identified 5 forces that could make an industry attractive or unattractive to operate in…
External Environment
A model to help understanding competition in the external environment.
Deciding whether or not to open a bagel business in Cambridge… We were discussing SWOT – expands upon the “T” competition…
Why is knowing Threats important?
Why do businesses care about competition?
How do we know if there is competition in a particular industry?

7. Rivalry Amongst Competitors
New Entrants
Is this industry too easy for others to enter?
Suppliers
Will they have a lot of control over our business?
Customers
Do they have a lot of bargaining power?
Rivalry Amongst Competitors
Is it fierce already?
New Entrants
- Government regulation?
Major players with deep pockets? Economies of Scale
High start up costs?
Suppliers
Powerful if there are few players
No substitutes for supplies
High cost to switch suppliers
Customers
Powerful if concentrated (few customers)
Purchase in large volumes
Substitutes
e.g. video conferencing and business air travel
Rivalry Amongst Competitors
Affected by the other forces
Growth in the industry (Greater the growth, less the competitive rivalry
Substitutes
Could consumers easily switch to a competing product?

8. Results of the 5 Forces? Forces are HIGH = unattractive industry
Forces are LOW = attractive industry
Ideally, you would answer “No” to the questions we just asked about each force and then enter that industry.
Industries with low rivalry are 5 star industries and have a high level of expected profitability for firms within that industry.