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Start from scratch If favorable, how to enter? Acquire existing player Joint venture with existing player
Market share Market favorable for entry? Comparative products and services Barriers to entry
Industry Analysis
Growth
How many?
Life cycle? Transition
Performance, margins
Maturity
Suppliers
Major players
Competition Market share Current industry structure New players Industry changes New technology
Brand
Drivers
Technology
Size
The industry? How secure are its markets and customers? Due Dilligence What are the margins? Competitive response to acquisition Legal issues
Price
How to pay?
How long to keep it? Exit strategies Divest parts of the organization?
New Product
Special or proprietary?
Expanding customer base Prompting competitive response Market Strategy Barriers to entry
Financing?
Patented?
Major players and market share
Substitutions?
Who?
Product Advantages and disadvantages Place in product line Cannibalizing our own products Replacing existing product
Customers
How funded?
Financing
Debt viable?
Pricing Strategies
Value based pricing
Pricing
KEEP IN MIND 1. Price discrimination (1st/2nd/3rd degree) 2. Bundling 3. Competitors reactions 4. Behavioral Economics Anchoring, Prospect theory
Competitive pricing
Cost-based pricing Price-based costing
Growth Strategies
Is the industry growing?
How are we growing compared to the industry? Prices relative to competitors Assessment Competitors marketing and development Which segments have the most potential? Funding for higher growth
Increase distribution channels Increase product line Strategies Invest in major marketing campaign Diversity of products or services offerd
New Business
Management
Marketing and strategic plan Distribution channels Product
Barriers to entry
Market
Customers
Finance
Competitive Response
Acquire a competitor
New Product?
Why?
Strategy
Copy competitor Hire the competitor's management Increase profile with marketing campaign
Increasing Sales
Growth relative to market share
Increase volume
Changes in market share
Prices competitive?
Reducing Costs
Get cost breakdown Investigate for irregularities Benchmark competitors Labor-saving technologies
Cost analysis Internal
Union wages, suppliers, materials, economies of scale, increased support system Economy, interest rates, government regulations, transportation/shipping strikes
Assessment
Increasing Profits
Indentify revenue streams
ID fixed costs
Revenue ;
E (P=R-C) M ; Always look at external factors first
ID variable costs
Unusual balance?
Have percentages changed? Expand into new areas Increase sales (volume and force) Volume Increase marketing
Reduce prices
Turnaround
Learn about company Review services, products, finances Strategy Secure funding
Strategy (con.) Reassure clients, suppliers, distributors Prioritize goals and develop some small successes for momentum Determine short term/long term goals
Business plan
Factors to analyze competitors: - Market share - Relative strengths in Product categories, price, features, quality - Substitutability
Useful generic framework for yes/no cases Ex. Should Trevor Toys spend more on Low-tech toys?
PROs Customer Company Resources Competition Product etc CONs