Etop of Any Company

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Strategic Management
Market Dynamics

Copyright by Authors Tom Koplyay and David Goldsmith July 1998

3-1

ETOP
Environmental Threat and Opportunity Profile
Factor
Regulatory
Competitive
External Alliance
Internal Alliance
Entrepreneurial
Info Highway
Financial
Social

Impact
3
-2
7
-6
4
5
7
2

Importance
8
7
6
5
5
4
4
3

Opportunity
24

Threat
-14

42
-30
20
20
28
6

In this ETOP factors are tailored and ordered as to their importance Regulatory - tremendous opportunity to push for deregulation, led by STPI. They have had their lesson and learned well
Competitive - AT&T, Sprint
External Alliance - solid, mutually reinforcing, long-term
Internal Alliance - source of friction and reduction of ability to react Entrepreneurial - Stentor now much more entrepreneurial (all three elements) Info Highway - mergers and acquisition for cable, cellular, infotainment Financial - ability to increase leverage through debt

Social - universal access concept, downsizing, leanness all socially acceptable Copyright by Authors Tom Koplyay and David Goldsmith July 1998

3-2

ETOP: Pros and Cons

Pros


Help to determine the key

Cons


factors of threats and
opportunities



interactions between factors


It can’t reflect the dynamic
environment

Good tool to qualify the factors
related to company’s strategy

It doesn’t show the



It’s a subjective analysis tool

Can consider many factors for
each special case

Copyright by Authors Tom Koplyay and David Goldsmith July 1998

3-3

Porter Competitive Analysis
5 Forces Model of Competition
FIRMS IN OTHER
FIRMS IN OTHER
INDUSTRIES OFFERING
INDUSTRIES OFFERING
SUBSTITUTE PRODUCTS
SUBSTITUTE PRODUCTS

SUPPLIERS
SUPPLIERS

RIVALRY
RIVALRY
AMONG
AMONG
COMPETING
COMPETING
SELLERS
SELLERS

BUYERS
BUYERS

POTENTIAL
POTENTIAL
NEW ENTRANTS
NEW ENTRANTS

Copyright by Authors Tom Koplyay and David Goldsmith July 1998

3-4

Porter Analysis
Substitutes
Substitutes

Suppliers
Suppliers

Customers
Customers

Market
Market

New Entrants
New Entrants

Horizontal Forces
mature markets
Vertical Forces
growth markets
Vertical and Horizontal
competitive and changing markets
Copyright by Authors Tom Koplyay and David Goldsmith July 1998

3-5

Porter Competitive Analysis - Wal-Mart

New Entrants

Discount Retailing
Discount Retailing

Copyright by Authors Tom Koplyay and David Goldsmith July 1998

3-6

Porter: NTI
Sat. Tech.
Sat. Tech.

Telephone or
Multimedia cost?
Suppliers
Suppliers

AT&T
AT&T
NTI
NTI

Baby Bells
Baby Bells

Low cost producer
Financial strength

Siemens
Siemens
NEC
NEC

Growth market
Price focus of customers - close to maturity
Strategic Factors: Flexibility, enhancement, uniqueness (product/service combination), combine with GVA, new Porter needed?
Copyright by Authors Tom Koplyay and David Goldsmith July 1998

3-7

Porter’s Five Forces: Pros and Cons
Cons

Pros











It’s a good tool to identify the clear
competitive environment and the
relationship for the five market forces
It is an useful analysis model for the •
new entrants and the existing
competitor inside the market

It helps the company design
competitive strategies and make right
decisions
It surfaces the inverse relationship
between profit margin or returns and

the intensity of competition
It provides useful inputs for performing
other analysis

Copyright by Authors Tom Koplyay and David Goldsmith July 1998

It often produces the same
recommendations for similar
organizations
It assumes relatively static
market structures.
It provides a good framework
for analysis but does not really
consider issues around
implementing changes to
reposition for strategic
advantage.
It can’t show how a company
performed relative to its
competitors

3-8

Porter Competitive Analysis -...
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