Business policy and strategy
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Business Policy and Strategy. Lecture-11. Recap. Social, Cultural, Demographic & Environmental Forces Average level of education Government regulation Attitudes toward customer service Attitudes toward product quality Energy conservation Social responsibility Recycling

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Business policy and strategy

Business Policy and Strategy

Lecture-11

Business Policy and Strategy


Recap

Recap

  • Social, Cultural, Demographic & Environmental Forces

  • Average level of education

  • Government regulation

  • Attitudes toward customer service

  • Attitudes toward product quality

  • Energy conservation

  • Social responsibility

  • Recycling

  • Waste management

  • Air & water pollution

  • Ozone depletion

Business Policy and Strategy


Recap1

Recap

  • Political, Governmental & Legal Forces

    • Government regulation/deregulation

    • Tax law changes

    • Special tariffs

    • Political Action Committees (PACs)

    • Voter participation rates

    • Number of patents

    • Changes in patent laws

    • Environmental protection laws

    • Equal employment legislation

Business Policy and Strategy


Today s lecture

Today’s Lecture

  • Technological Forces

    • Revolutionary technological forces

    • Internet changes the nature of opportunities and threats

  • Competitive Forces

    • Collection and evaluation of information on competitors

Business Policy and Strategy


Technological forces

Technological Forces

Revolutionary technological forces:

  • Profound impact on organizations

    • Internet

    • Semiconductors

    • XML technologies

    • UWB communications

Business Policy and Strategy


Technological forces1

Technological Forces

Internet changes the nature of opportunities and threats --

  • Alters life cycle of products

  • Increases speed of distribution

  • Creates new products and services

  • Eases limitations of geographic markets

  • Alters economies of scale

  • Changes entry barriers

Business Policy and Strategy


Technological forces2

Technological Forces

  • Altering the life cycles of products by

    • Increasing the speed of distribution

    • Creating new products and services

    • Erasing limitations of traditional

    • Geographic markets

    • Changing the historical tradeoff between production standardization and flexibility

Business Policy and Strategy


Technological forces3

Technological Forces

Technology-based issues

  • Underlie nearly every strategic decision

  • Bank Sector information system

    • Chief information officer (CIO) and 

    • Chieftechnology officer (CTO).

Business Policy and Strategy


Competitive forces

Competitive Forces

  • Collection and evaluation of information on competitors is essential for successful strategy formulation

    • Virtually competition in all industries can be described as intense.

Business Policy and Strategy


Competitive forces1

Competitive Forces

Identifying rival firms

  • Strengths

  • Weaknesses

  • Capabilities

  • Opportunities

  • Threats

  • Objectives

  • Strategies

Business Policy and Strategy


Competitive forces2

Competitive Forces

Key Questions About Competitors:

  • Their strengths

  • Their weaknesses

  • Their objectives and strategies

  • Their responses to all external variables (e.g. social, political, demographic, etc.)

  • Their vulnerability to our alternative strategies

Business Policy and Strategy


Competitive forces3

Competitive Forces

Key Questions About Competitors:

  • Our vulnerability to successful strategic counterattack

  • Our product and service positioning relative to competitors

  • Entry and exit of firms in the industry

  • Key factors for our current position in industry

  • Sales and profit rankings of competitors over time

  • Nature of supplier and distributor relationships

  • The threat of substitute products or services

Business Policy and Strategy


Competitive forces4

Competitive Forces

Sources of Corporate Information:

  • Moody’s Manuals

  • Standard Corporation Descriptions

  • Value Line Investment Surveys

  • Dun’s Business Rankings

  • Standard & Poor’s Industry Surveys

  • Industry Week

  • Forbes, Fortune, Business Week

Business Policy and Strategy


Competitive forces5

Competitive Forces

7 Characteristics of most competitive U.S. firms:

  • Market share matters

  • Understand what business you are in

  • Broke or not, fix it

  • Innovate or evaporate

  • Acquisition is essential to growth

  • People make a difference

  • No substitute for quality

Business Policy and Strategy


Competitive forces6

Competitive Forces

Competitive Intelligence Programs:

  • Systematic and ethical process for gathering and analyzing information about the competition’s activities and general business trends to further a business’ own goals

Business Policy and Strategy


Competitive forces7

Competitive Forces

Firms need an effective competitive intelligence program. The three basic missions of a CI program are:

 (1) To provide a general understanding of an industry and its competitors,

(2) To identify areas in which competitors are vulnerable and to assesses the impact strategic actions would have on competitors

(3) to identify potential moves that a competitors might make that would endanger a firm’s position in the market

Business Policy and Strategy


Summary

Summary

  • Technological Forces

    • Profound impact on organizations

      • Internet

      • Semiconductors

      • XML technologies

      • UWB communications

  • Competitive Forces

    • Market share matters

    • Understand what business you are in

    • Broke or not, fix it

    • Innovate or evaporate

    • Acquisition is essential to growth

    • People make a difference

    • No substitute for quality

Business Policy and Strategy


Next lecture

Next Lecture

  • COMPETITIVE ANALYSIS

    • PORTER’S FIVE-FORCES MODEL

Business Policy and Strategy


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