SESSION 2: EXTERNAL ANALYSIS AND MBV Market Based View of Strategy: External environment analysis > strategic issues-> winning strategies-> superior performance Market based view of strategy (MBV) - sometimes known as Industrial Organisation based view (IO) places primary importance on external conditions faced by the firm. In this view‚ strategy is about the firm creating for itself a ‘market position’ via strategy whereby it can defend itself from external environmental forces and/or
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entrants‚ the metal container industry does not seem to be attractive due to the high barriers to entry. Most of all‚ the economies of scale provide current players with economic advantages that would be extremely difficult to reach for new entrants. Additionally‚ the saturation of the market does not make it very attractive to new entrants‚ as competition for current sales is so intense. The high barriers to entry are‚ however‚ an advantage for current producers‚ which do not have to be scared by the arrival
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businesses used a “top-down” management style * Built on a “we care” attitude that emphasized integrity and treating people right‚ they created a competitive advantage with their stellar customer service * Competition increased and growing consolidation within the industry started in early 2000’s * With this increased competition and market expansion‚ Luck had to change their management style to better meet the needs of customers and its employees * This led to Luck to diversify and
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Session 5 1. The institutional variations in ethical standards‚ CSR and sustainability issues. Matten and Moon (2008)’s framework Corporate governance refers to the system of structures‚ rights‚ duties‚ and obligations by which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors‚ managers‚ shareholders‚ creditors‚ auditors‚ regulators‚ and
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attractiveness derives from the relative low threat of new entrants‚ low supplier and buyer powers‚ and low threat of substitutes. The main factors driving these results are the low concentration of suppliers and buyers‚ the significant barriers to entry due to high up-front investment costs (for infrastructure and distribution channels) and scale economies‚ low availability of substitutes 1‚ and the threat of retaliation from incumbents (by lowering price‚ for example). However‚ it is important
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OBS 320: Chapter 4‚ Exploring the External Environment: Macro and Industry Dynamics Leave out: The Value Curve (P. 152-156); and When industry Divide and Collide (P.163-164) 1. Explain the importance of the external context for strategy and firm performance (P. 130-132) A. The External Context of Strategy (Figure 4.1) B. The External Context of Strategy (Explained) It is crucial that the external environment is thoroughly understood in order to formulate an effective
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products‚ power of suppliers not so much • Movie theatres – production houses strong; substitute products abound; Threat of Entry The threat of entry puts pressure on prices‚ costs and the rate of investment necessary to compete. This puts pressure on profitability. Competitors must hold down prices or boost investment to deter new entrants. Barriers to Entry 1. Supply-side economies of scale: Occurs when firms that produce larger volumes enjoy lower cost per unit‚ because they can
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Lenin in the Bolshevik consolidation of power from 1917 to 1924. Lenin’s contribution to the Bolshevik Party was an essential factor in their consolidation of power during 1917-1924‚ however; Lenin’s role was not the only factor contributing to their success. The Bolsheviks were regarded as a “minor feature of Russian political life” and it was not until Lenin’s return to Russia that the party became a key player. It can be seen that Lenin played a pivotal role in the consolidation of power due to his
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in industries such as software‚ soft drinks and toiletries leading to greater potential for return. Industry structure grows out of a set of economic and technical characteristics that determine the strength of each competitive force. Threat of Entry New entrants bring new capacity and desire to gain market share that puts pressure on prices‚ costs‚ and the rate of investment necessary to compete New entrant diversifying from other markets‚ particularly dangerous as seen by Pepsi in the bottled
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The Five Competitive Forces That Shape Strategy by Michael E. Porter Comments (143) RELATED Executive Summary ALSO AVAILABLE Buy PDF Editor’s Note: In 1979‚ Harvard Business Review published “How Competitive Forces Shape Strategy” by a young economist and associate professor‚ Michael E. Porter. It was his first HBR article‚ and it started a revolution in the strategy field. In subsequent decades‚ Porter has brought his signature economic rigor
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