Technological Demographics Culture Economic Legal International
Relevant R&Cs Example 1 (VR) Example 2 (VRIO) Example 3(V) Example 4 (VRIO)
External Analysis - Porters 5 Forces - Threats
Threat of Entry Threat of Rivalry Threat of Substitutes Threat of Suppliers Threat of Buyers EoS : # of Similar Firms : Substitute Products : # of Suppliers : # of Buyers : Differentiation : Slow Growth : Unique Inputs : Standard Product : CIS (i.e. proprietary tech, know-how, favorable access, learning curve) : Differentiation : Substitute Inputs: % of Buyers Costs : Gov. Regulation : Capacity Increments : Vertical Integration : Buyers Earnings : FF are Important : Back V Integration :
Threat = Threat = Threat = Threat = Threat = (+ high, 0 neutral, - low) Overall Expected Returns in the Industry
External Analysis - Industry Stage - Opportunities
Industry Stage Opportunities
Relevant R&Cs Example 1 (VR) Example 2 (VR)
Internal Analysis - VRIO
R & Cs Valuable Rare Costly to Imitate Organized Implications
Includes: R&Cs, Sources of Cost Leadership, Bases of Differentiation, Vertical Integration / Capabilities Perspective, Diversification & Economies of Scope, Alliances, Mergers & Acquisitions Business Level Strategy
Business Level Strategy Product Differentiation
Sources of Cost Leadership (Table 4.1) or Bases of Product Differentiation (Table 5.1) Product Features (V) Product Customization (VR) Linkages with other firms (VR)
Relevant R&Cs Example 1 (VR) Example 2 (VR) Example 3 (VR) Example 4 (VR) Example 5 (VR) Example 6 (VR) Example 7 (VRIO)
Business Level Strategy Impact on Five Forces Threat of Entry Threat of Rivalry Threat of Substitutes Threat of Buyers Threat of Suppliers Reduced
Vertical Integration
Transaction Specific Investments (e.g. Site, Physical, Temporal, Human Capital, Dedicated Assets)
Vertical Integration Considerations VI & Opportunism (TCE) VI & Firm Capabilities VI & Flexibility
Corporate Diversification
Type of Corporate Diversification Evidence
Economies of Scope through Diversification (Table 7.1) Example 1 (VR) Example 2 (VRIO)
Relevant R&Cs Example 1 (V) Example 2 (VRIO) Example 3 (VR)
Strategic Alliance Value (Table 9.1) Example 1 (VR) Example 2 (VRIO)
Relevant R&Cs Example 1 (V) Example 2 (VRIO) Example 3 (VR)
Alliance Threats (Table 9.2) Adverse Selection Moral Hazard Hold-Up
Mergers & Acquisitions
Strategic Relatedness of M&A - Value (Tables 10.1, 10.2) Motivation (Table 10.4) Evidence
Competitive Implications of M&A Example 1 (V) Example 2 (VRIO) Example 3 (VR)
Relevant R&Cs Example 1 (V) Example 2 (VRIO) Example 3 (VR)
Bidding Firm Rules (Value goes to Bidder) Yes/No Target Firm Rules (Value goes to Target) Yes/No (VR) Economies of Scope Asymmetrical Information with Bidders Asymmetrical Information with Targets Avoid Bidding Wars Close the Deal Quickly Operate in thinly traded acquisition markets Seek Information from Bidders Invite other Bidders to Join Delay but do not stop Acquisition