Situational Analysis

Situational Analysis:
Process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses.

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TOWS Matrix

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Resource-Based Approach
Resource:

An asset, competency, process, skill, or knowledge controlled by the corporation.

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Competitive Strategy
Industry Structure:
Fragmented Industry
Many small and medium-sized local companies compete for small shares of total market
Focus strategies predominate

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Competitive Strategy

Industry Structure:
Consolidated industry
Mature industry dominated by a few large companies
Cost Leadership or Differentiation predominate

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Dimensions of Quality
Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived Quality

Dimensions Quality

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Competitive Strategy
Strategic rollup:
Quickly consolidate fragmented industry Money from venture capital Entrepreneur acquires hundreds of owner-operated firms Creates large firm with economies of scale
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Competitive Strategy
Strategic rollup:
Differ from Conventional M&As
Large number of firms Owner-operated firms Goal to reinvent entire industry

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Competitive Tactics
Tactic:
Specific operating plan detailing how a strategy is to be implemented in terms of when and where it is to be put into action.
Timing tactics Market location tactics

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Competitive Tactics
Timing Tactics:
First mover (pioneer)
Reputation as industry leader High profits Sets standards for subsequent products in the industry

Late mover
Able to imitate technological advances of others
Keeps R&D costs down Keeps risks down
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Competitive Tactics
Market Location Tactics:
Offensive Tactics
Frontal assault Flanking maneuver Bypass attack Encirclement Guerrilla warfare

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Competitive Tactics
Market Location Tactics:
Defensive Tactics
Raise structural barriers Increase expected retaliation Lower the inducement for attack

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Cooperative Strategies
Cooperative Strategies:
Collusion
Active cooperation of firms to reduce output and raise prices
Explicit Tacit

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Cooperative Strategies
Cooperative Strategies:
Strategic Alliance:
Partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial.

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Cooperative Strategies
Obtain technology

Access to markets

Strategic Alliance

Reduce financial risk

Reduce political risk Achieve competitive advantage

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