Nghiệp vụ ngân hàng - Chapter 2: External environment

Nội dung text: Nghiệp vụ ngân hàng - Chapter 2: External environment

1. BUSINESS STRATEGY Chapter 2- External environment Lecturer: PHD. PHẠM QUỐC KHÁNH Banking Academy (Vietnam) khanhhvnh@gmail.com or khanhhvnh@yahoo.com Mobile: 0913210000
2. Chapter 2- External environment Learning outcomes ▪ After finishing this chapter, you will be able to: ▪ Understand the importance of external environment to the strategy process. ▪ Analysis the range of factors in the external environment. ▪ Apply Porter’s five forces model for business strategy. ▪ Identify opportunities and threats for a business.
3. Chapter 2- External environment Learning outcomes
4. Chapter 2- External environment 1- What is the external environment? Economic Demographic Socio- cultural Industry Environment Competitive Environment Political/Legal Global Technological
5. Chapter 2- External environment 1- What is the external environment? Competitors Suppliers Distributors Creditors Customers Key Employees Opportunities External Communities & Forces Managers Threats Stockholders Labor Unions Special Interest Groups Products Services Markets Natural Environment
6. Chapter 2- External environment 1- What is the external environment? Long- term orientation Measurable External Factors Applicable to competing firms Hierarchical The environment is a major source of uncertainty!!!
7. Chapter 2- External environment 1- What is the external environment? Political The environment is a Technol Economi major source of ogical PEST c uncertainty!!! Socio- cultural
8. Chapter 2- External environment 1- What is the external environment? Political Economi Legal c The environment is a PES major source of TEL uncertainty!!! Environ mental/ Socio- ecologic cultural al Technol ogical
9. Chapter 2- External environment 1- What is the external environment? ▪ Provide at least five sources of information for environment analysis in business strategy process.
10. Chapter 2- External environment 1- What is the external environment? ▪ Sources of Information: •Internet •Libraries •Suppliers •Distributors •Salespersons •Customers •Competition
11. Chapter 2- External environment 1- What is the external environment? • Political Analysis – Political stability – Risk of military invasion – Legal framework for contract enforcement – Intellectual property protection – Trade regulations & tariffs – Favored trading partners – Anti-trust laws
12. Chapter 2- External environment 1- What is the external environment? • Political Analysis – Pricing regulations – Taxation - tax rates and incentives – Wage legislation - minimum wage and overtime – Work week – Mandatory employee benefits – Industrial safety regulations – Product labeling requirements
13. Chapter 2- External environment 1- What is the external environment? • Economic Analysis – Type of economic system in countries of operation – Government intervention in the free market – Comparative advantages of host country – Exchange rates & stability of host country currency – Efficiency of financial markets – Infrastructure quality
14. Chapter 2- External environment 1- What is the external environment? • Economic Analysis – Skill level of workforce – Labor costs – Business cycle stage (e.g. prosperity, recession, recovery) – Economic growth rate – Discretionary income – Unemployment rate – Inflation rate – Interest rates
15. Chapter 2- External environment 1- What is the external environment? • Social Analysis – Demographics – Class structure – Education – Culture (gender roles, etc.) – Entrepreneurial spirit – Attitudes (health, environmental consciousness, etc.) – Leisure interests
16. Chapter 2- External environment 1- What is the external environment? • Technological Analysis – Recent technological developments – Technology's impact on product offering – Impact on cost structure – Impact on value chain structure – Rate of technological diffusion
17. Chapter 2- External environment 1- What is the external environment? • By examining opportunities, you can discover untapped markets, and new products or technologies, or identify potential avenues for diversification. • By examining threats, you can identify unfavorable market shifts or changes in technology, and create a defensive posture aimed at preserving your competitive position.
18. Chapter 2- External environment 2- Porter’s five forces Potential development of substitute products Bargaining power Rivalry among Bargaining power of suppliers competing firms of consumers Potential entry of new competitors
19. Chapter 2- External environment 2- Porter’s five forces New Entrants: Barriers to Entry • Economies of Scale – To the extent that there are economies of scale, it will be difficult for a new firm to come in and compete with established firms. • Product Differentiation – To the extent that the firm’s products are distinct and non-copiable, new firms won’t be able to come in and take away customers. • Brand Identification – To the extent that there is brand identification, customers will remember the firm’s product and will resist switching. • Switching Cost – If it is costly for the customer to switch, new entrants won’t be able to convince them to do so.
20. Chapter 2- External environment 2- Porter’s five forces New Entrants: Barriers to Entry • Access to Distribution Channels – If the firm has preferential or monopolistic access to distribution channels, it is more resistant to competition. • Capital Requirements – If capital requirements are high, new under-capitalized firms won’t be able to enter the industry. • Access to Latest Technology – If technology is important in the industry, new firms are less likely to have access to them, which is good for established firms. • Experience and Learning Effects – If experience is necessary for a firm to figure out how to operate efficiently, established firms have a distinct advantage.
21. Chapter 2- External environment 2- Porter’s five forces New Entrants: Government action • Industry Protection • Industry Regulation • Consistency of Policies • Capital Movement Amongst Countries • Custom Duties • Foreign Exchange • Foreign Ownership • Assistance Provided to Competitors
22. Chapter 2- External environment 2- Porter’s five forces Bargaining Power of Suppliers • Number of Important Suppliers – The fewer the number of important suppliers, the more power they have over the firm, and the greater their ability to extract producer surplus. • Availability of Substitutes for the Suppliers’ Product – This would reduce supplier power
23. Chapter 2- External environment 2- Porter’s five forces Bargaining Power of Suppliers • Differentiation or Switching Costs of Suppliers’ Products – If it’s difficult for the firm to switch to other suppliers, the current suppliers can charge more • Suppliers’ Threat of Forward Integration – To the extent that suppliers might potentially themselves become competitors, they are less reliable and need to be looked at strategically
24. Chapter 2- External environment 2- Porter’s five forces Bargaining Power of Suppliers • Differentiation or Switching Costs of Suppliers’ Products – If it’s difficult for the firm to switch to other suppliers, the current suppliers can charge more • Suppliers’ Threat of Forward Integration – To the extent that suppliers might potentially themselves become competitors, they are less reliable and need to be looked at strategically
25. Chapter 2- External environment 2- Porter’s five forces Bargaining Power of Suppliers • Industry Threat of Forward Integration – To what extent is it possible that the entire supplier industry might integrate forward? • Suppliers’ Contribution to Quality or Service of the Industry Products – How crucial are suppliers in the maintenance of the quality of industry products? Clearly, this will determine supplier power. Also, if this is an important factor, then the supplier industry might be more important, and might integrate forward. • Total Industry Cost Contributed by Suppliers – This goes to the same issue as above, but from a more quantitative perspective. • Importance of the Industry to Suppliers’ Profits
26. Chapter 2- External environment 2- Porter’s five forces Bargaining Power of Customers • Number of Important Buyers – The greater the number of important buyers, the less power does the firm have to manipulate prices • Availability of Substitutes for the Industry Products – The impact of this on price elasticity of demand for the industry’s products is obvious. • Buyer’s Switching Costs – This is relevant both in terms of switching to competitors’ products and switching to products manufactured by other industries. • Buyer’s Threat of Backward Integration – The buyer might choose to integrate backward and manufacture his input goods, himself. This means that buyers have to be looked at strategically; they also have more power over the prices they are charged.
27. Chapter 2- External environment 2- Porter’s five forces Bargaining Power of Customers • Industry Threat of Backward Integration – The entire buyer industry might integrate backward. • Contribution to Quality or Service of Buyer’s Products – The greater the contribution of the firm’s product to the quality of the product, the greater the power of the firm. On the other hand, this might also impel the buyer to integrate backward. • Total Buyer’s Cost Contributed by the Industry – This is similar to the previous point, but in a more quantitative fashion. • Buyer’s Profitability – The more profitable buyers are, the more amenable they are to paying more for their input products.
28. Chapter 2- External environment 2- Porter’s five forces Substitutes • Some of these points have already been addressed in looking at buyers/suppliers. However, it’s useful to consider it again from the product perspective, rather than from the perspective of other economic actors. – Availability of Close Substitutes – User’s Switching Costs – Substitute Producer’s Profitability and Aggressiveness – Where is the substitute product located on the Price/Value dimensions?
29. Chapter 2- External environment 2- Porter’s five forces Competitors analysis Current Future Assumptions Capabilities Strategy Objectives • What • Does our • How do our • How do our assumptions current goals compare capabilities do our strategy to our compare to competitors support competitors’ our hold about changes in the goals? competitors? the future of competitive industry and environment? themselves?
30. Chapter 2- External environment 2- Porter’s five forces Competitors analysis- Response 1. What will our competitors do in the future? 2. Where do we have a competitive advantage? 3. How will this change our relationship with our competition?
31. Chapter 2- External environment