Managing petition.doc

Managing petition
? 2009 Peng Global Strategy 2E
Managing petition
? 2009 Peng Global Strategy 2E
? 2009 Peng Global Strategy 2E
Outline
Defining petition
The five forces framework
Three generic strategies
Debates and extensions
Implications for strategists
2–*
? 2009 Peng Global Strategy 2E
? 2009 Peng Global Strategy 2E
petition and the IO Model
Industry:
A group of firms producing products (goods and/or services) that are similar to each other3>.
Structure-Conduct-Performance (SCP) model
The primary contribution of the anization (IO) economics model
Structure: Structural attributes of an industry
Conduct: The firm’s actions
Performance: The result of the firm’s conduct in response to industry structure
2–*
? 2009 Peng Global Strategy 2E
? 2009 Peng Global Strategy 2E
Defining petition
The original goal of IO economics is not to help pete; instead, it is to help policymakers better understand how pete in order to properly regulate them and petition.
Business strategists have turned the SCP model from IO economics upside down, by drawing on its insights to help firms perform better.
This transformation is the heart of this chapter.
2–*
? 2009 Peng Global Strategy 2E
? 2009 Peng Global Strategy 2E
Five Forces Framework
The Five Forces Framework
“Translated” and extended from the SCP model in 1980 by Michael Porter.
A key proposition:
The focal firm’s performance critically depends on the degree petitiveness of the five forces within an industry.
The stronger and petitive these forces are, the less likely the focal firm is able to earn above-average return, and vice versa.
2–*
? 2009 Peng Global Strategy 2E
? 2009 Peng Global Strategy 2E
The Five Forces
Framework
Figure
2–*
? 2009 Peng Global Strategy 2E
? 2009 Peng Global Strategy 2E
Five Forces Framework:
Intensity of Rivalry petitors
Actions indicative of a high degree of rivalry:
frequent price wars
proliferation of new products
intense advertising campa