External analysis overview
Industry Evolution and Life-Cycle
Tech-Based Industries
Internal Analysis Overview
Business Strategies
100
Describe the overall relationship between the strength of the five forces and the profit potential of the industry
Inverse (strong forces, low profit potential
100
List the five stages of the industry life cycle
Start-up; growth; shakeout; maturity; decline
100
List the three dimensions of the technology stack
Value is based on the stack:
Technology utility (good itself)
Installed base
Complementary goods
100
A resource is cost to imitate if
1) It has physical uniqueness
2) Built on path dependency
3) Built on casual ambiguity
100
Give an example of a firm following a cost leadership strategy and explain how the company implements it (one company example and one implementation example).
Walmart - low product prices, store brand products, aggressive pricing strategy with competitors; M&A of e-commerce overseas to beat amazon etc
200
List and define the four types of industry competitive structures
200
True or False: Different industries will follow the same evolutionary pathways
False. Some stages are shorter in different industries due to factors such as barriers to entry, which can shift industry concentration/dynamics
200
What is the role of network effects in Google's competitive advantage?
•It is a source of increasing returns to adoption: the value of the good grows as more people use it
The more a technology is used, the more it is improved
Benefits of adopting a product or service increase as more people adopt it
•Network effects
•Installed base
•Complementary products (suite of products that add to installed base)
•The more people that uses the complementary products, the more the installed base is used
•Creates switching costs
200
List two tangible and two intangible resources and indicate which resources are generally more valuable.
200
What is strategic positioning?
Strategic profile based on value creation and cost in a specific product market.
A valuable and unique position, which:
•Meets customer needs.
•Maximizes product value.
•Lowest possible product cost.
• Cost vs. Value Position -> always relative to competitors
300
What is the relationship between the general environment of the firm and firm performance?
General environment can affect firm performance in many ways. PESTEL forces can positively or negatively affect growth potential, industry dynamics, customer preferences, etc
300
Which stage is the voice assistant industry in and why?
Start-up; growth; shakeout; maturity; decline
any stage, as long as definition of the stage is correct
300
Explain industry convergence as a concept and explain briefly how it is happening within media industries
Unrelated industries begin to satisfy the same customer need
•Media Industries: Content going online; Newspapers, magazines, TV, movies, radio, music.
A wide variety of mobile devices, including smartphones, tablets, and e-readers, provide a new form of content delivery that has the potential to make print media obsolete.
300
_______ and _________ are the critical assumptions of RBV. What are they again?
Resource Heterogeneity.
•A firm is a unique bundle of resources, capabilities and competencies.
•These bundles differ across firms.
Resource Immobility.
•Resources are “sticky,” and don’t move easily from firm to firm.
•Resources are difficult to replicate.
•Resources can last for a long time.
300
List the four factors/drivers that keep costs low (e.g. that firms need to focus on if they are pursuing cost leadership strategy)
Cost of input factors:
•Raw materials, capital, labor, and IT services.
•Why does location matter?
Economies of scale:
•Decreases in cost per unit as output increases.
Learning-curve effects:
•Less time to produce output with experience.
Experience-curve effects:
•Improvements to technology and production processes.
400
Explain why the social and political elements of the PESTEL framework have been particularly important for Peloton during the pandemic?
Social - social distancing and need to have a sense of community
Political - quarantine and stay at home mandates isolating people
400
The industry life cycle is defined by two main aspects (related to innovation and product/service adoption)
demand growth and knowledge diffusion
400
What differentiates the tech industry from others?
Increasing returns to adoption
400
Describe Peloton's core competency
Anything works.
Create community and belonging
Great content with celebrity trainers
High quality hardware + software
400
How is Shein able to successfully sustain their low cost leadership strategy?
Violation of IP, strong relationship with suppliers, cheap labor and inputs, virtual business, ..
500
The retail giant Walmart provides perhaps the most potent example of tremendous buyer power. Walmart is not only the largest retailer worldwide (with over 12,000 stores and 2 million employees), but it is also one of the largest companies in the world (with $530 billion in revenues in 2019).
Walmart is one of the few large big-box global retail chains and frequently purchases large quantities from its suppliers. Walmart leverages its buyer power by exerting tremendous pressure on its suppliers to lower prices and to increase quality or risk losing access to shelf space at the largest retailer in the world. Walmart’s buyer power is so strong that many suppliers co-locate offices directly next to Walmart’s headquarters in Bentonville, Arkansas, because such proximity enables Walmart’s managers to test the supplier’s latest products and negotiate prices.
500
How can companies win in the growth stage of the industry life cycle?
Design for or secure access to large scale manufacturing capability to obtain gains of scale and move in learning curve; access to and control channels of distribution to mass market; develop strong brand. This stage is crucial for firm survival – it is like crossing the chasm for technological developments. Wrong moves can bust your growth phase and lead to sudden decline and potential exit of the industry.
500
This is my favorite fast-food chain. Give the name of the chain and explain its strategic positioning.
McDonalds - low-cost leadership
500
How can core competencies sustain a firm's competitive advantage over time?
They strategically valuable resources or competencies that enable a company to perform activities better or more cheaply than rivals.
•Core competencies are resources and capabilities that serve as a source of a firm’s competitive advantage.
Distinguish a company competitively and reflect its personality
Emerge over time through an organizational process of accumulating and learning how to deploy different resources and capabilities
500
Define differentiation strategy. How can a bottled-water company differentiate itself from competitors?
Unique features that increase value, so that consumers pay a higher price.
The focus of competition:
•Unique product features.
•Service.
•New product launches.
•Marketing and promotion.
Competitive advantage achieved when:
Value – Cost > Competitors.
Several competitors in the bottled-water industry provide a prime example of pursuing a successful differentiation strategy. As more and more consumers shift from carbonated soft drinks to healthier choices, the industry for bottled water is booming—growing about 10 percent per year. In the United States, the per person consumption of bottled water surpassed that of carbonated soft drinks for the first time in 2016. Such a fast-growing industry provides ample opportunity for differentiation. In particular, the industry is split into two broad segments depending on the sales price. Bottled water with a sticker price of $1.30 or less per 32 ounces (close to one liter) is considered low-end, while those with a higher price tag are seen as luxury items. For example, PepsiCo’s Aquafina and Coca-Cola’s Dasani are considered low-end products, selling purified tap water at low prices, often in bulk at big-box retailers such as Walmart. On the premium end, PepsiCo introduced Lifewtr with a splashy ad during Super Bowl LI (2017), while Jennifer Aniston markets Smartwater, Coca-Cola’s premium water.