AUG 31, 2000 PORTER REVISITED

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AUG 31, 2000PORTER REVISITED
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COMPETITIVE FORCES MODEL

• RIVALRY AMONG COMPETITORS
• POWER OF SUPPLIERS
• POWER OF CUSTOMERS
• THREAT OF NEW PRODUCTS
• THREAT OF NEW ENTRANTS

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• DEFINITION
• NON-IT EXAMPLE
• I.T. EXAMPLE
• WEB EXAMPLE?

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WHY?

• THE NATURE OF INDUSTRY IS CHANGING.
• NEED A FRAMEWORK TO ANALYZE
• THIS IS ONE POSSIBLE WAY OF EXAMINING

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RIVALRY AMONG COMPETITION
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POWER OF SUPPLIERS

• AIRLINES
• CUSTOMERS
• AIRLINE AGENTS
• WEB?

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POWER OF CUSTOMERS

• LARGE CUSTOMERS OVER
• AIRLINE CUSTOMERS

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THREAT OF NEW PRODUCTS

• PLASTICS OVER STEEL
• WORD PROCESSORS OVER TYPEWRITERS
• MUSIC

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THREAT OF NEW ENTRANTS

• SOUTHWEST AIRLINES
• ?
• AMAZON
• ETRADE

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THUS WE CAN SEE..

• POWER RELATIONSHIPS ARE BEING CHANGED
• OPPORTUNITIES FOR NEW PRODUCTS
• BARRIERS TO ENTRY REDUCED

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NEW (?) FORMS OF BUSINESS

• THE AUCTION PROCESS --
• BUYERS BID AGAINST EACH OTHER
• THE BID PROCESS
• SELLERS BID AGAINST EACH OTHER
• (NOW FOR CONSUMER PRODUCTS)

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• ANALYZE COSTS
• ACQUISITION COSTS
• MANUFACTURING COSTS
• STORAGE COSTS
• SELLING COSTS (ADVERTISING)
• TRANSACTION COSTS
• DELIVERY COSTS

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BUNDLING / UNBUNDLING

• WHAT ARE THEY SELLING?
• PRODUCT INFORMATION
• TRAINING
• ADVICE
• PRODUCT
• AFTER-SALES SERVICE
• UNBUNDLING / RE-BUNDLING

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S.W.O.T. ANALYSIS

• STRENGTHS
• WEAKNESSES
• OPPORTUNITIES
• THREATS

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INDUSTRY ANALYSIS

• WHAT ARE THE COMPONENT ACTIVITIES?
• WHO ARE THE STAKEHOLDERS?
• WHICH ACTIVITIES GET ELIMINATED?
• WHICH STAKEHOLDERS ARE AFFECTED?

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AIRLINES
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MUSIC INDUSTRY
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STOCK BROKERAGE
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ONLY THE PARANOID SURVIVE.. Andy Grove.
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GENERAL MESSAGE

• THE INDUSTRIES ARE CHANGING.
• OPPORTNITIES, THREATS.
• PEER INTO THE FUTURE
• LOOK OVER YOUR SHOULDERS
• FRAMEWORKS TO ANALYZE
• TRIANGULATE