Porter 5- forces plus

Transcription

1 Interna(onal Business Environment and Strategy Compe((on Analysis the real forces of compe((on Porter 5- forces plus Robert Jones 2013 hlp://cambridgemba.wordpress.com/strategy

2 Learning outcomes: Revisit the classic Porter 5- forces of compe((on model Understand its purpose and apply to an example Ques(on its validity and update to include more forces

3 Revision fill in the gaps

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11 Compe((on and Collabora(on Exhibit 5.5 Johnson, Scholes & Whi`ngton (2005) Exploring Corporate Strategy, 7th Edi(on, Pearson Educa(on

12 Compe((on or collabora(on? Peugeot 107 Citroen C1 Built in the same factory in the Czech Republic Common pladorm Toyota Aygo See: Brandenburger, A. and Nalebuff, B. (1998) Co- ope33on, Currency Doubleday

13 A global airline alliance:-

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15 Examples of new entrants: Walmart into Germany ( ) outcome? hlp:// biggest- retailer- wal- mart- closes- up- shop- in- germany/a hlp://journalofinterna(onalmanagement.wordpress.com/2011/05/16/walmarts- downfall- in- germany- a- case- study/ Walmart into UK (1999 to date) - outcome? hlp:// Tesco into USA ( ) outcome? hlp:// Tesco- sale- of- Fresh- and- Easy- wins- City- backing.html What happened in each case? Why?

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17 Compe((ve Strategies in Hypercompe((ve Condi(ons Compe((ve advantage is temporary Rapid imita(on Not sustainable Compe((ve advantage relates to Organisa(on s ability to change Speed Flexibility Innova(on Disrup(on of market Johnson, Scholes & Whi`ngton (2005) Exploring Corporate Strategy, 7th Edi(on, Pearson Educa(on based on: D Aveni, R. (1995) Hypercompe((ve Rivalries: Compe(ng in highly dynamic environments, Free Press.

18 Game Theory - Prisoner s Dilemma Compete aggressively? Or tolerate compe(tors and avoid harming each other? Exhibit 5.6 Johnson, Scholes & Whi`ngton (2005) Exploring Corporate Strategy, 7th Edi(on, Pearson Educa(on

19 Red Oceans industry sectors that exist today, These are already contested and compe((ve Blue Oceans industry sectors that do not yet exist Unknown market space, opportuni(es? Examples? Chan Kim, W., and Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market Space and Make Compe33on Irrelevant, Harvard Business Press

20 Is this the full picture?

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23 Government / European Union rules and regula(ons can have a direct Influence on compe((on. An(- compe((ve behaviour is not allowed. WTO is also ac(ve in this area.

24 Compe((on or collabora(on or collusion? British Airways fined 58.5m for fuel price-fixing British Airways is to pay a reduced 58.5m fine for colluding with rival Virgin Atlantic on fuel surcharges, finally putting to bed an investigation that has lasted more than five years.

25 The Compe((on Commission takes ac(on against an3- compe33ve behaviour hlp:// commission.org.uk/

26 hlp://ec.europa.eu/compe((on/index_en.html

27 Agreements between two or more independent market operators which restrict compe((on are prohibited by Ar3cle 101 of the European Treaty. The most flagrant example of illegal conduct infringing Ar(cle 101 is the crea(on of a cartel between compe(tors (which may involve price- fixing and/or market sharing). Ar3cle 102 of the Treaty prohibits firms holding a dominant posi(on on a determined market to abuse that posi(on, for example by charging unfair prices, by limi(ng produc(on, or by refusing to innovate to the prejudice of consumers. hlp://ec.europa.eu/compe((on/an(trust/overview_en.html

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31 Junior minister Cabinet minister These policies really started in 1983 in the UK, implemented by Prime Minister Thatcher, Based on much earlier wri(ngs of Peter Drucker

32 Example: Deregula(on of European airspace encouraged new entrant airlines Ryanair (as a Low Cost Airline) in 1992 easyjet (as a LCA) in 1995 How did Bri(sh Airways respond? Ignore the new entrants? Tolerate them? Retaliate against them?

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38 Bri(sh Airways gave Barbara Cassani (a senior manager at BA) 25 million to create a new LCA. She created a new airline called GO in 1998 BA planned to retaliate against the new entrants and at the same (me learn about this new business. BA sold GO in 2001 for 100 million. easyjet bought GO in 2002 for 378 million None of the players was damaged, the market for air travel in the UK grew by 40% a year.

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41 Some sectors e.g. banks and financial are being heavily Re- regulated as a result of misconduct.

42 Recap: Revisit the classic Porter 5- forces of compe((on model Understand its purpose and apply examples Ques(on validity of model and update to include more forces Five forces- plus Ques(ons

43 Sources Porter, M.E. (1980) Compe((ve Strategy: Techniques for analyzing industries And compe(tors, Free Press (Simon & Schuster Inc.) Brandenburger, A. and Nalebuff, B. (1998) Co- ope33on, Currency Doubleday D Aveni, R. (1995) Hypercompe((ve Rivalries: Compe(ng in highly dynamic environments, Free Press. TNS Worldpanel (market intelligence reports) hlp:// (accessed 10 Sept 2011) hlp:// commission.org.uk/ (accessed 12 October 2013) hlp://ec.europa.eu/compe((on/index_en.html (accessed 12 October 2013) hlp:// (accessed 12 October 2013) hlp:// (12 October 2013) Mike O Leary on YouTube: hlp:// (12 October 2013) Michael Porter interview on YouTube hlp:// (c) Robert Jones accessed Sept 2011