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1、Case in Point notes咨询案例笔记The first four steps 1. Summarize the Question 2. Verify the Objectives a) One objective is to raise profits. Are there any other objectives that I should know about? 3. Asking clarifying questions Questions to ask to determine the case scenario The company The industry Comp
2、etition Is it public or private? How big is it? Is it growing? Where is the industry in its life cycle? Internal: Who are the major players? What is our market share? External: substitutions, the economy, interest rates, unemployment rate, price-cutting by competitors, rising material costs The prod
3、uct 12 case scenarios Strategy scenarios 1. Entering a new market 2. Industry analysis 3. Mergers and Acquisitions 4. Developing a new product 5. Pricing strategies 6. Growth strategies 7. Starting a new business 8. Competitive response Operations Scenarios 9. Increasing sales 10. Reducing costs 11.
4、 Improving the bottom line 12. Turnarounds 4. Lay out your structure If its a new product, ask about both the advantages and the disadvantages. Is there a patent? Is it licensed? Entering a New Market 1. Summarize the Question 2. Verify the Objectives, clarifying a) b) c) a) Why Objectives Fit of ov
5、erall strategy State of current and future market l l l l l 3. Lay out your structure Size Growth rate Market life cycle: emerging/ mature/ decline Customer segmentation Role of technology Major players, market share, strengths and weaknesses Product differentiation Price strategy Available substitu
6、tions Barriers to entry/ barriers to exit l b) Market analysis l l l l l Capital requirements Access to distribution channels Proprietary technology Government policy/ regulations Risks: market, regulation, technology If yes, how? Start from scratch Acquisition cost benefit analysis of each Joint ve
7、nture/strategic alliance c) Entering l l No Starting a New Business 1. Entering a New Market/ Market analysis l l Major players, market share, strengths and weaknesses Product comparison Differentiation Price strategy Available substitutions l Barriers to entry/ barriers to exit Management Evaluate
8、the management team Their core competencies Experience working together Advisory board? Barriers of entry Major players and market share Competitive response 2. Ok to enter? Venture Capitalist point of view: Market & Strategic Plans Distribution Channels Products Product and technology Competitive e
9、dge Weakness Technology proprietary Who How to reach them (internet?) How to retain them How is it funded? Best allocation of funds Can we support the debt? Customers Finance Developing a New Product The product l l l l l l l l Special proprietary of the product Financing? Patented? Substitutions? A
10、dvantages and disadvantages Place in product line Cannibalizing existing products? Replacing an existing product? Expanding customer base and increase sales? Competitive response? New market? Barriers to entry/exit Major players and market share Who How to reach How to retain Funding of project Fund
11、s allocation Interests rates and future economy influence Market strategy l l l l Customers l l l Financing l l l Competitive Response Competitive Analysis Competitors new products Whats changed? Have they picked up market share? Acquire the competitor Merge with the competitor Copy the competitor H
12、ire the competitors top management Response Increase our profile with a marketing and public campaign Industry Analysis Current market l l l l l l Life cycle (emerging/ maturity/ decline) Performance in the past 1, 2, 5, 10 years (growing or declining) Company position within the market Major player
13、s and market share Industry changes (new players, technology, regulations) Drivers (brand, size, technology) Suppliers l l l How many? Product availability Whats going on in their market Future l l l Are players entering or leaving the market? Mergers and acquisitions Barriers to entry and exit Merg
14、ers and Acquisitions Objectives, why buy? l Market access Boost brand Increase market share l l l l Diversify holdings Pre-empt competition Taxes Synergies Cost savings reduction of fixed and variable costs Cultural integration Distribution channel expansion Acquisition costs l l l l Fair price? Can
15、 we afford it? How to pay for it? Reintegration costs What if the economy sours? What shape is the economy in? How secure are markets and their customers? Industry overall/technology risks Competitive response Legal issues Hold for how long Break it up and sell of its parts Due diligence l l l l l E
16、xit strategy l l Pricing Strategies ProductAnanlysis l l l l Special proprietary Position in the industry life cycle Market size R&D cost Competitive analysis Competitors prices Competitors prices compared to ours Substitutions Consumer buying habits Cost of goods sold what does it cost to make? Wha
17、ts our breakeven point? How much profit margin can we add? What are customers willing to pay for the product? Whats it worth to them compared to other things? Supply and demand Pricing strategies l l Cost-based pricing l Price-based costing Growth Strategies Analyze the industry and price l l l l Gr
18、owth Strategies l l l l l Is the industry growing? How are we growing relative to the industry Are our prices in line with our competitors? What have our competitors done in marketing and product development? Which segments of our business have the highest future potential? Do we have funding to sup
19、port higher growth? Increase distribution channels Increase product line Invest in Major marketing campaign Diversify products and services Acquire competitors l l Increasing Sales Market Analysis l l l l l Growth relative to market share Changes in market share Customer needs Price in line with com
20、petitors? Competitors move in marketing and product development Increase volume. (Get more buyers, increase distribution channels, intensify marketing.) Increase amount of each sale. (Get each buyer to spend more) Increase prices Create seasonal balance. Ways to increase sales l l l l Reducing Costs
21、 Breakdown of costs l Internal costs Increased support systems Union wages (labor costs) Suppliers Materials Economies of scale (fixed and variable costs) Economy Interest rates Government regulations Transportation/ shipping strikes l External costs Step 2: If any cost seems out of line, investigat
22、e why. Step 3: Benchmark the competitors. Step 4: Determine whether there are any labor-saving technologies that would helpreduce costs. Increasing Bottom Lines: Profits Analyze the Revenues Turnarounds Strategy Gather information Company Why is it failing? Products, management, economy? Industry Co
23、mpetitors facing the same problems? Do we have access to capital? Public or privately-held? What are the revenue streams? What percentage of the total revenue does each stream represent? Does anything seem unusual in the balance of percentages? Have the percentages changed lately? If so, why? ID maj
24、or costs (variable and fixed costs) Major shifts in costs? (e.g. labor or raw material costs) Any out of line costs? Benchmark costs against competitors Expand into new areas Increase sales force Increase marketing Reduce prices Improve customer service Examine Costs Volume Review services, products
25、, and finances Secure sufficient financing Review talent and temperament of all staff, get rid of the deadwood Determine short-term and long term goals Devise a business plan Visit clients, suppliers, and distributors, and reassure them Prioritize goals and get some small successes ASAP to build con
26、fidence Michael Porters Five ForcesPotential EntrantsThreat of new entrantsSuppliers Bargaining power of suppliersIndustry competitors Rivalry Among existing firmsBuyers Bargainingpower of buyersSubstituesThreat of substitute products or servicesMcKinsey 7-S Framework StrategySystemsStructureShared
27、ValuesStyleStaffSkillsVocabulary Customer segmentation Customer Segmentation is the subdivision of a market into discrete customer groups that share similar characteristics. Companies that identify underserved segments can then outperform the competition by developing uniquely appealing products and
28、 services. Customer Segmentation is most effective when a company tailors offerings to segments that are the most profitable and serves them with distinct competitive advantages. This prioritization can help companies develop marketing campaigns and pricing strategies to extract maximum value from b
29、oth high- and low-profit customers. A company can use Customer Segmentation as the principal basis for allocating resources to product development, marketing, service and delivery programs. Customer Segmentation requires managers to: l Divide the market into meaningful and measurable segments accord
30、ing to customers needs, their past behaviors or their demographic profiles Determine the profit potential of each segment by analyzing the revenue and cost impacts of serving each segment Target segments according to their profit potential and the companys ability to serve them in a proprietary way
31、Invest resources to tailor product, service, marketing and distribution programs to match the needs of each target segment Measure performance of each segment and adjust the segmentation approach over time as market conditions change decision making throughout the organization l l l l Companies use
32、Customer Segmentation to: l l l l l l Prioritize new product development efforts Develop customized marketing programs Choose specific product features Establish appropriate service options Design an optimal distribution strategy Determine appropriate product pricing Industrylifecycle Marketentry ba
33、rriers Barriers to entry into markets for firms include: Advertising - Incumbent firms can seek to make it difficult for new competitors by spending heavily on advertising that new firms would find more difficult to afford. This is known as the market power theory of advertising.5 Here, established
34、firms use of advertising creates a consumer perceived difference in its brand from other brands to a degree that consumers see its brand as a slightly different product.5 Since the brand is seen as a slightly different product, products from existing or potential competitors cannot be perfectly subs
35、tituted in place of the established firms brand.5 This makes it hard for new competitors to gain consumer acceptance.5 Capital - need the capital to start up such as equipment, building, and raw materials Control of resources - If a single firm has control of a resource essential for a certain indus
36、try, then other firms are unable to compete in the industry. Cost advantages independent of scale - Proprietary technology, know-how, favorable access to raw materials, favorable geographic locations, learning curve cost advantages. Customer loyalty - Large incumbent firms may have existing customer
37、s loyal to established products. The presence of established strong brands within a market can be a barrier to entry in this case. Distributor agreements - Exclusive agreements with key distributors or retailers can make it difficult for other manufacturers to enter the industry. Economy of scale -
38、The increase in efficiency of production as the number of goods being produced increases. Cost advantages can sometimes be quickly reversed by advances in technology. For example, the development of personal computers has allowed small companies to make use of database and communications technology
39、which was once extremely expensive and only available to large corporations. Government regulations - A rule of order having the force of law, prescribed by a superior or competent authority, relating to the actions of those under the authoritys control. Requirements for licenses and permits may rai
40、se the investment needed to enter a market, creating an effective barrier to entry. Inelastic demand - One strategy to penetrate a market is to sell at a lower price than the incumbents. This is ineffective with price-insensitive consumers. Intellectual property - Potential entrant requires access t
41、o equally efficient production technology as the combatant monopolist in order to freely enter a market. Patents give a firm the legal right to stop other firms producing a product for a given period of time, and so restrict entry into a market. Patents are intended to encourage invention and techno
42、logical progress by guaranteeing proceeds as an incentive. Similarly, trademarks and servicemarks may represent a kind of entry barrier for a particular product or service if the market is dominated by one or a few well-known names. Investment - That is especially in industries with economies of sca
43、le and/or natural monopolies. Network effect - When a good or service has a value that depends on the number of existing customers, then competing players may have difficulties in entering a market where an established company has already captured a significant user base. Predatory pricing - The pra
44、ctice of a dominant firm selling at a loss to make competition more difficult for new firms that cannot suffer such losses, as a large dominant firm with large lines of credit or cash reserves can. It is illegal in most places; however, it is difficult to prove. See antitrust. In the context of inte
45、rnational trade, such practices are often called dumping. Restrictive practices, such as air transport agreements that make it difficult for new airlines to obtain landing slots at some airports. Research and development - Some products, such as microprocessors, require a large upfront investment in
46、 technology which will deter potential entrants. Supplier agreements - Exclusive agreements with key links in the supply chain can make it difficult for other manufacturers to enter an industry. Sunk costs - Sunk costs cannot be recovered if a firm decides to leave a market. Sunk costs therefore inc
47、rease the risk and deter entry. Switching barriers - At times, it may be difficult or expensive for customers to switch providers Tariffs - Taxes on imports prevent foreign firms from entering into domestic markets. Vertical integration - A firms coverage of more than one level of production, while pursuing practices which favor its own operations at each level, is often cited as an entry barrier as it requires competitors producing it at differ
