Quiz Week 3 Advanced Models

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Quiz Week 3Advanced Models

• Vault

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Week 3 Quiz

• List all the advance models.

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Week 3 Quiz

• List all the advanced models.

• Net Present Value
• Capital Asset Pricing Model
• Five Forces
• PIE
• SWOT
• Seven Ss
• Product Life Cycle Curve
• Strategy Framework Chart
• Four Ps
• Four Cs

• Five Cs
• Value Chain Analysis
• Core Competencies
• Best Practices
• 2X2 Matrix
• BCG Matrix
• Value Drivers Framework
• Target and Market Assessment
• Data Gathering and Analysis

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Strategic and Natural Competition

• Bruce D. Henderson, 1980

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Bruce Henderson

• BCG founder
• Provocative
• Relevant and Significant
• Argumentative
• Self-critical
• Strategy 1963

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Strategy

• All competitors who persist over time must
  maintain a unique advantage by differentiation
  over all others. Managing that differentiation
  is the essence of long-term business strategy.
• Bruce Henderson

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Strategy

• The essence of strategy is managing a firms
  differentiation.

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Elements of Competition

• The ability to understand competitive
  interactions as a complete dynamic system that
  includes the interaction of competitors,
  customers, money, people, and resources.
• The ability to use this understanding to predict
  the consequences of a given intervention in that
  system and how that intervention will result in a
  new pattern of stable dynamic equilibrium.

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Elements of Competition

• The availability of uncommitted resources that
  can be dedicated to different uses and purposes
  in the present even though the dedication is
  permanent and the benefits will be deferred.
• The ability to predict the risk and return with
  sufficient accuracy and confidence to justify
  commitment of such resources.
• The willingness to deliberately act to make the
  commitment.

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Strategic and Natural Competition

• Strategic
• Deliberate
• Radical
• compressed time

• Natural
• Wildly expedient
• Inherently extremely conservative
• Learning by trial-and-error
• Goes on even if by pure chance
• Can yield complexity

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Hypotheses

• Effective competition will result in a range of
  sizes of competitors from very small to very
  large. The spectrum will be stable over time.

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Hypotheses

• Competitors who survive and prosper will have a
  unique advantage over any and all other
  competitors in specific combinations of time,
  place, products, and customers.

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Hypotheses

• For any given competitor, there will be different
  competitors who will provide the constraints for
  almost every combinations of relevant factors.
  Therefore the frontiers or boundaries of
  competitive parity will be constantly changing as
  any one of the competitors changes, adapts,
  grows, or redeploys.

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Hypotheses

• Perpetual conflict will exist along those
  frontiers where competitive ability is at parity.

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Hypotheses

• Very little conflict will exist where clear
  superiority is visible. The military analogy of
  the battlefront is useful in visualizing this.

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Hypotheses

• Business competition inherently has multiple
  fronts with a different competitor on each front.

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Hypotheses

• Any redeployment of resources will change the
  balance of competitive parity on at least two
  fronts. If one is strengthened, others will be
  weakened.

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Hypotheses

• Whenever a front or zone of competitive parity
  becomes stable or static, then bourgeois
  competition will develop. Such bourgeois
  competition exists even when the defense always
  acts as hawk and the offense always acts as a
  dove. This is a mutual recognition of mutually
  predictable behavior.

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Hypotheses

• The fewer the number of competitive variables
  that are critical, the fewer will be the number
  of competitors. If only one factor is critical,
  then no more than two or three competitors are
  likely to coexist. Only one will survive if the
  available market shrinks. This is the Rule of
  Three and Four.

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Hypotheses

• The greater the number of potentially important
  variables, the larger will be the number of
  coexisting competitors but the smaller will be
  their absolute size.

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Hypotheses

• The more variable the environment, the fewer the
  number of surviving competitors. In this case,
  the ability to cope with the greater change in
  environment becomes the overriding and
  controlling factor.

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Hypotheses

• The entry of a new competitor depends on the
  ability of that competitor to develop and
  identify a clear superiority compared to all
  existing competitors in some subsection of the
  total market. Sequence of entry is important.

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Summation of SC

• Elements of SC
• Understanding of competitive interactions as a
  complete dynamic system of firms-people-money-res
  ources
• Ability to predict the results of an intervention
• Availability of uncommitted resources
• Ability to predict risks and returns
• Willingness

• SC Hypotheses
• Size
• Unique combination
• Boundaries
• Parity
• Clear superiority
• Multiple fronts
• Redeployment
• Bourgeois
• Small number of variablesRule of Three and
  Four
• Large number of variables
• Variable environment
• New entrant

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Case Interview 1

• Use PIE to analyze the supermarket industry in
  Sacramento

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Case Interview 2

• Use the Product Life Cycle Curve to decide
  whether Apple should develop a new version of the
  iPhone.

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Case Interview 3

• Use the Four Cs to determine whether it would be
  a good idea to launch a fast-food chain based on
  a Greek / Mediterranean menu.

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Case Interview 4

• Use the Rule of Three and Four to analyze the
  supermarket industry in Sacramento.

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Next Weeks Assignment

• Write
• What was your favorite thing about todays
  discussions?
• Why?
• What are your plans for mastering this material?
• Read (This assignment is due in 2 weeks)
• Chapter 4, Cosentino
• Foundations Section, BCG