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Lecture

lecture 5

7 Pages
127 Views

Department
Global Management Studies
Course Code
GMS 200
Professor
Shavin Malhotra

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Management Strategy
Imp aspect of any org
Help org beat competitiors
Useful planning tools and techniques
SWOT (strengths, weakness, opportunites, threats)
ostrengths internal= manufacturing effiency, skilled workforce, market
share, financing, rep
oWeakness internal = Obsolete tech
oOpp external = strong economy = huge growth rate
oThreat external = new competitor, consumer more demanding
Porters five forces model
oFocuses on industry
Highest rev
5aerospace and defence, 8health care: pharmacy, 7commercial
banks, 10entertainment,6 food consumer products, network and
comm., 4mining and crude-oil production,9 motor vehicles and
parts, 2pharmaceuticals, 3railroads
Least profit to rev ratio
oWhy industry? help design plan and strategy
oIndustry competition, customers, substitute products, suppliers, new entrants
= if no these = no kind of industry in = better plan how reach position
oAirline industry highly competitive = strong rivalry = many competitors =
low profitablity
Bargaining power of consumers, since strong competition and compare
prices with one airline with other
Suppliers not too many = better for suppliers and more competition
with airlines = not good b/c not lot of option and prices are controlled
and supplier can demand the price of material = controled
Oil = fly on crude oil = makes competitive b/c prices controlled
www.notesolution.com
Management Strategy
oRivalry among competing firms most strongest competive force
Rivalry increase as;
# of competitors increase
Competitors become more equal in size = equal resource
(manpower, money)
Product is a commodity and cant be differentiate = every
product i the same with same beinfit and price (ex: salt and
sugar = everyone sells same product)
Consumer demand is growing slowly = less more pressure
on profit margin
oPotential entry of new customers
When firm can easily enter new industry, competition in that industry
= low cost of entry (entertainment) = make highly competitive
Want to make it more difficult for competors by:
oBarriers to entry:
Large econmies of scale
Need to gain tech and know how = tech sparse
Strong brand preference = one that are there are
up against strong brand loyalty and increase
protoion and lose money to do that (ex: Coca
Cola, Pepsi) = already huge market share = when
enter new country they buy out any competition
Large capital req
Lack of adequeste distribution channels
oDevelopment of substitute products
Industries with close completion w/producers of substitute products
have higher competeition
Ex: producers of eye glasses compete/ lenses and laser tech
www.notesolution.com

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Description
Management Strategy Imp aspect of any org Help org beat competitiors Useful planning tools and techniques SWOT (strengths, weakness, opportunites, threats) o strengths internal= manufacturing effiency, skilled workforce, market share, financing, rep o Weakness internal = Obsolete tech o Opp external = strong economy = huge growth rate o Threat external = new competitor, consumer more demanding Porters five forces model o Focuses on industry Highest rev 5aerospace and defence, 8health care: pharmacy, 7commercial banks, 10entertainment,6 food consumer products, network and comm., 4mining and crude-oil production,9 motor vehicles and parts, 2pharmaceuticals, 3railroads Least profit to rev ratio o Why industry? help design plan and strategy o Industry competition, customers, substitute products, suppliers, new entrants = if no these = no kind of industry in = better plan how reach position o Airline industry highly competitive = strong rivalry = many competitors = low profitablity Bargaining power of consumers, since strong competition and compare prices with one airline with other Suppliers not too many = better for suppliers and more competition with airlines = not good bc not lot of option and prices are controlled and supplier can demand the price of material = controled Oil = fly on crude oil = makes competitive bc prices controlled www.notesolution.com
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