Business growth and strategy.ppt

1、6 Business Growth and Strategy,Strategic management strategic and day-to-day management the components of strategic management strategic analysis strategic choice strategic implementation Importance of the business environment PEST analysis,Strategic Analysis,Strategic Analysis,Porters five forces m

2、odel the five forces the bargaining power of suppliers the bargaining power of buyers the threat of potential new entrants the threat of substitutes the extent of competitive rivalry,Industry competitors,Porters Five Forces Model,Source: Michael E. Porter Competitive Strategy: Techniques for Analyzi

3、ng Industries and Competitors, (The Free Press, 1980),Industry competitors Rivalry among existing firms,Porters Five Forces Model,Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980),Potential entrants,Industry competitors Rivalr

4、y among existing firms,Threat of new entrants,Porters Five Forces Model,Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980),Substitute products,Potential entrants,Industry competitors Rivalry among existing firms,Threat of new e

5、ntrants,Threat of substitutes,Porters Five Forces Model,Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980),Suppliers,Substitute products,Potential entrants,Industry competitors Rivalry among existing firms,Threat of new entrant

6、s,Bargaining power of suppliers,Threat of substitutes,Porters Five Forces Model,Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980),Buyers,Suppliers,Substitute products,Potential entrants,Industry competitors Rivalry among exist

7、ing firms,Threat of new entrants,Bargaining power of suppliers,Bargaining power of buyers,Threat of substitutes,Porters Five Forces Model,Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980),Strategic Analysis,Porters five forces

8、 model the five forces the bargaining power of suppliers the bargaining power of buyers the threat of potential new entrants the threat of substitutes the extent of competitive rivalry factors affecting each of the forces,Strategic Analysis,Porters five forces model the five forces the bargaining po

9、wer of suppliers the bargaining power of buyers the threat of potential new entrants the threat of substitutes the extent of competitive rivalry factors affecting each of the forces limitations of the five forces model,Strategic Analysis,Value chain analysis nature of value chain analysis primary ac

10、tivities inbound logistics operations outbound logistics marketing and sales service secondary activities procurement technological development human resources management firm infrastructure,Inbound logistics,The value chain,Firm infrastructure,Technological development,Human resource management,Pro

11、curement,Strategic Choice,Environment or market-based strategy types cost leadership differentiation focus importance of establishing:- the basis of a firms competitive advantages the nature of the target market Resource-based strategy exploiting core competencies defining & establishing core compet

12、encies,Growth by internal expansion product differentiation vertical integration diversification Growth by external expansion: mergers and takeovers horizontal mergers vertical mergers conglomerate mergers,Growth Strategy,Alternative growth strategy,GROWTH OF A FIRM,Internal expansion,External expan

13、sion,(1) Differentiation Horizontal expansion (same product, increase in market share),(1) Horizontal integration Mergers of firms producing the same product,(2) Vertical integration Different products, but belonging to different stages of same product,(2) Vertical integration Mergers of firms produ

14、cing at different stages of same process,(3) Conglomerate Diversification - introduction of totally different products,(3) Conglomerate Diversification - merger of firms producing totally unrelated products,Growth Strategy,Growth by internal expansion financing internal growth borrowing share issue

15、ploughing-back profit the takeover constraint,Growth Strategy,Growth by internal expansion (cont.) growth through vertical integration backward integration (upstream integration) forward integration (downstream integration) why vertically integrate? economies of scale reduced uncertainty monopoly po

16、wer barriers to entry growth through diversification advantages when existing market is saturated spreads risks,Growth Strategy,Growth through mergers and takeovers types of merger and takeover horizontal vertical conglomerate motives for mergers and takeovers growth economies of scale monopoly powe

17、r increased market valuation reduced uncertainty other motives effects of mergers on consumers,Financing Growth and Investment,Sources of business finance internal sources ploughed-back profit external sources banks mainly short- and medium-term finance stock market longer-term finance problem of sh

18、ort-termism international sources,The role of the Stock Exchange primary market secondary market advantages brings together savers & firms seeking finance regulates firms and helps encourage confidence facilitates mergers and takeovers reduces transaction costs of investment finance disadvantages cost of getting listed possible short-termism and instability,Financing Growth and Investment,Is the stock market efficient? the efficient market hypothesis share prices reflect information about companies current and expected future performance implications of stock market efficiency bene