COMPETITIVE BUSINESS ENVIRONMENT2016.pptx

competitive business environment

1. COMPETITIVE AUSAD, GLENDA TANG, MERLYN BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN

2. BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN TOPICS TO BE COVERED: Defining Competition Who are the Competitors Types of Competitors Meaning of Competitive Environment Elements of Competitive Environment Competitive Strategies Challenges to Competitive of Business MICHAEL PORTER’S FIVE FORCES: COMPETITIVE BUSINESS ENVIRONMENT

3. COMPETITION COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN In economics “Competition” is the rivalry among sellers trying to achieve such goals as increasing profits. By varying the elements of the Marketing Mix: PRICE, PRODUCT, DISTRIBUTION, AND PROMOTION

4. COMPETITORS Any person or entity which is a rival against another . In business, A company in the same industry or a similar industry which offers a similar product or services. COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN

5. TYPES OF COMPETITORS Direct Competitors Indirect Competitors COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN

6. COMPETITIVE ENVIRONMENT Is the dynamic external system in which a business competes and function. COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN

7. ELEMENTS OF COMPETITIVE ENVIRONMENT Regulatory Elements Direct Competitors Indirect Competitors Differentiation Technology COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN

8. COMPETITIVE STRATEGIES COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN LOWER COST DIFFERENTIATION Broad Target 1. Cost Leadership 2. Differentiation Narrow Target 3a. Cost Focus 3b. Differentiation Focus COMPETITIVE ADVANTAGE COMPETITIVE SCOPE

9. CHALLENGES TO COMPETITIVE OF BUSINESS Operations Logistical Cost Creating global marks Leadership Customer Acceptance Market Understanding and Branding Less Experience of International Markets, Customers and Suppliers COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN

10. MICHAEL PORTER’S FIVE FORCES: It is a framework for analysing the level of competition within an industry and business strategy development It draws upon industrial organization economics to derive five forces that determine the competitive intensity Porter refers these forces as the Micro environment, to contrast it with more general term Macro environment COMPETITIVE BUSINESS ENVIRONMENT BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN

11. INDUSTRY RIVALRY Bargaining Power of Suppliers Threat of Substitutes Bargaining Power of Buyers Threat of New Entrants MICHAEL PORTER’S FIVE FORCES: THREAT OF NEW ENTRANT Potential factors: Government Policy Capital requirements Absolute cost Economics of scale Brand Equity Network effect BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN COMPETITIVE BUSINESS ENVIRONMENT

12. INDUSTRY RIVALRY Bargaining Power of Suppliers Threat of Substitutes Bargaining Power of Buyers Threat of New Entrants MICHAEL PORTER’S FIVE FORCES: THREAT OF SUBSTITUTES Potential factors: Quality depreciation Buyer switching cost Substandard product Availability of close substitute BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN COMPETITIVE BUSINESS ENVIRONMENT

13. INDUSTRY RIVALRY Bargaining Power of Suppliers Threat of Substitutes Bargaining Power of Buyers Threat of New Entrants MICHAEL PORTER’S FIVE FORCES: BARGAINING POWER OF BUYER OR CUSTOMER Potential factors: Buyer concentration to firm concentration ratio Buyer information availability Force down prices Availability of existing substitute products Buyer price sensitivity BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN COMPETITIVE BUSINESS ENVIRONMENT

14. INDUSTRY RIVALRY Bargaining Power of Suppliers Threat of Substitutes Bargaining Power of Buyers Threat of New Entrants MICHAEL PORTER’S FIVE FORCES: BARGAINING POWER OF SUPPLIERS Potential factors: Suppliers switching cost relative to firm switching cost Presence of substitute inputs Strength of distribution channel Employees solidarity BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN COMPETITIVE BUSINESS ENVIRONMENT

15. INDUSTRY RIVALRY Bargaining Power of Suppliers Threat of Substitutes Bargaining Power of Buyers Threat of New Entrants MICHAEL PORTER’S FIVE FORCES: INDUSTRY RIVALRY Potential factors: Degree of transparency Level of advertising expenses Powerful competitive strategy Firm concentration ratio BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN COMPETITIVE BUSINESS ENVIRONMENT

16. END BA 205 BUSINESS ENVIRONMENT I AUSAD, GLENDA & TANG, MERLYN