** most common industry driving forces? (i) Emerging new internet capabilities & applications. (ii) Increasing Globalization.

(iii) Changes in an industrys long term growth rate. (iv) Changes in who buys the product & how they use it. (v) roduct Innovation. (vi) !echnological Change & manu"acturing process Innovation. (vii) #ar$eting Innovation. (viii) Entry or e%it o" ma&or "irms (i%) Changes in cost & e""iciency. (%) Growing buyer pre"erences "ro di""erentiated products.
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** )conomics of -cale & )conomic of scope?

)conomic of -cale: .i/ Economics o" scale is about gaining bene"its by production large volume o" a product. .ii/ I" re"er to reducing average cost "or a single asset. .iii/ It has been $nown "or a long time. .iv/ It use the most e""icient process. .v/ E%ample* 1uch as Cost o" roducing 233 unit is 433 !$. Cost o" producing 533 unit is (433533) 6 27337333 !$. /ut i" producing 533 unit under economics o" scale then producing cost will 837333 !$. )conomic of -cope: .i/ Economics o" scope brings bene"its by producing a wide variety o" products by e""iciency use o" the operations. .ii/ It re"er to lowering average cost o" producing two or more products. .iii/ Is relatively new approach to business strategy. .iv/ It uses the process to produce similar products using high technology. .v/ E%ample* such as 9 company produce product ) 6 : !$. ; < < < / 6 = !$. !otal cost o" ()7 /) 6 2> !$. unit. I" we produce o" product ()7 /3 ?nder ceononics o" scope then producing cost will be 25t$. +ere7 (2>*25) !$ 6 5 will called economies o" scope. '''''''''''''''''''''''''''''''''''''''''''''''

** Merger & Acquisition?

Merger: (hen two companies come together to "rom one company. Is a combination o" two companies. ) merger in which two corporations lose their separate identities & mite to "orm a completely new corporation. !here are three types o" #erger* (a) +orizontal (b) ,ertical (c) Geographic emission. Acquisition: )n ac-uisition is when are company buys another one an ac-uisition occurs when an organization ac-uires su""icient shares to gain ownership o" another organization.

** Briefly describe the procedure of thinking strategically about the companys situation to ** strategic moves are rivals likely to make ne*t? choose a strategy? redicting the ne%t strategic moves o" competitors is the hardest yet most use"ul part o" competitors analysis. Thinking !o predict what strategic moves rivals are li$ely to Strategically ma$e ne%t include the "ollowing@ about External En ironment (i) (hich rivals badly need to increase their unit sales Select the & mar$et shareA Formulati Identify Best ng (ii) (hich rivals have a strong incentive to a di""erent Strategic Strategy & Strategic Options Business position on the strategic group mapA Vision model Thinking (iii) (hich rivals are good candidates to be ac-uiredA Strategically about Internal (iv) (hich rivals are li$ely to enter new geographic En ironment mar$etsA #onitoring & (v) which rivals are strong candidates to e%pand their Evaluating "or product o""eringsA ta$ing corrective '''''''''''''''''''''''''''''''''''''''''''' action.
!he strategic .pportunities o" #otor vehicle companies must adapt their strategies to customer concerns about gasoline prices. ''''''''''''''''''''''''''''''''''''''''''''''''' ** hat do you understand by the terms vertical !ntegration & "ori#ontal !ntegration? $lease describe% &ertical !ntegration: ,ertical Integration is the process in which several steps in the production or distribution o" a product or service are controlled by a single company. In order to increase that companys power in the mar$et place. ,ertical Integration are !hree !ypes* (i) /ac$ward (ii) 0orward (iii) /alanced "ori#ontal !ntegration: +orizontal Integration means a strategy to increase our mar$et shared by ta$ing over a similar company. !his merger can be done in the same geography or probably in other countries to increase our reach. ''''''''''''''''''''''''''''''''''''''''''''''''' ** "o' the effect of ()*perience +urve, helps to increase profitability? Industry activities characterized by strong learning e%perience curve e""ects that means learning by doing such as unit costs decline as companys e%perience in per"orming the activity builds. )ny companies have signi"icant cost advantages because o" their learning e%perience in per"orming particular activities. (e can show it by a curve live

0rom the curve we can say li$e these production cost or error cost slowly goes down but unit o" production goes up that means unit o" production is increasing. /ecause i" a company have previous e%perience to do a wor$ then i" they do that wor$ again then they need lower time to produce that product. )lso increase their unit o" production but decrease their cost production that previous time by reducing time or cost o" production & increasing unit o" production.

*** 0escribe the factors to consider in identifying *** "o' the bargaining po'er of suppliers shape an industrys dominant economic features? the completion 'ithin the industry? 'hen it become Industrys dominant economic "eatures not only sets the stronger & 'eaker? 0escribe briefly? stage "or the analysis to come but also promotes understanding )ns@ /argaining power o" suppliers shape the o" the $inds o" strategic moves that industry members are li$ely completion within the industry are given@* to engage. (i) ) "ew large suppliers are the primary sources o" a .i/ Market si#e & gro'th rate: #ar$et size means haw big is the industry & how it. Growth rate means haw "ast the industry particular item. (ii) It is di""icult or costly "or industry members to is growing. )lso it represent the mar$et growth rate. .ii/ 1umber of 2ivals@ Is the industry scrapped into many switch their purchases "rom are supplier to another. small companies or concentrated & dominated by a "ew large (iii) Certain needed inputs are in short supply. competitors. (iv)Certain supplier provide e-uipment or services that .iii/ -cope of competitive rivalry: It represent the geographic deliver valuable cost saving e""iciencies. area which most companies compete local7 regional7 national7 (v) Certain suppliers provide a di""erentiated input that multinational are global. .iv/ 1umber of buyers@ It means mar$et demand scraped enhances the per"ormance -uality. -upplier bargaining po'er is stronger & 'eaker: among many buyers. .v/ 0egree of product differentiation @ It represents the -tronger: products o" rivals becoming more di""erentiated or less (i) Industry members incurs high costs in switching di""erentiated. their purchase. .vi/ -upply & 0emand conditions: Is a surplus o" capacity (ii) Ceeded inputs are in short supply. where pushing prices & pro"it margins goes down. (iii) ) supplier has a di""erentiated input that enhances (vii) ace o" technological change@ It means what role does the -uality or per"ormance o" sellers products. advancing technology play o" industry. .viii/ &ertical integration: It represent the cost or competitive (iv) 1ome suppliers threaten to integrate "orward into advantage or disadvantage annunciated with being "ully or the business o" industry members. partially integrated. eaker: i*/ )conomics of scale: It re"er to reducing in average cost "or (i) 1eller switching costs to alternative suppliers are a single asset. low. */ 3eaning curve effects: It re"ers that any companies have (ii) Good substitute input e%ist. signi"icant cost advantages. (iii) !here is a surge in the availability o" supplies. (iv) 1eller partnering with selected suppliers provides *** "o' the bargaining po'ers of buyers shape the attractive win*win opportunities. competition 'ithin in industry? hen it becomes stronger ''''''''''''''''''''''''''''''''''''''''''' & 'hen 'eaker? 0escribe briefly% *** "o' the driving forces 'ithin the industry can impact favorably or unfavorably to boost or squee#e .a/ Bargaining po'ers of buyers shape the competition profit margin? 'ithin the industry:4
(i) /uyers cost o" switching to competing brands or substitutes are relatively low. (ii) !he number o" buyers is small. (iii) /uyers demand is wea$ & catch at sellers. (iv) /uyers are well in"ormed about sellers products7 price & costs. (v) /uyers have wise &udgment in whether & when they purchase the product. .b/ Buyer bargaining is stronger & 'eaker: -tronger: (i) /uyer switching costs to competing brands an substitute products are low. (ii) Barge volume purchases by buyers are important to seller. (iii) /uyer demand is wea$ or declining. (iv) Identi"y o" buyer ads prestige to the sellers list o" customers. eaker: (i) /uyers purchase the item in small -uantities. (ii) /uyer switching costs to competing brands are high. (iii) ) sellers brand reputation is important to a buyer. (iv) /uyer partnering with selected sellers provide attractive win*win opportunities. (v) ) particular sellers product delivers -uality that is very important to buyer.

)s a rule the stranger the collective impact o" the "ive competitive "orces7 the lower the combined pro"itability o" industry participants. (hen the collective impact o" the "ive competitive "orces is moderate to wea$7 an industry is competitively attractive in the since that industry members can reasonably e%pect to earn good pro"it & a nice return on investment. !he ideals competitive environment "or earning superior pro"its is one in which both suppliers and customers are in wea$ bargaining positions7 there re no good substitutes7 high barriers bloc$ "urther entry etc. !he intensity o" competition allows good pro"itability but is also promotes sound strategic thin$ing about how to better match company strategy. ''''''''''''''''''''''''''''''''''''''''''' ** (5roup Mapping,? "o' it helps to understand competitive positions among rivals 'ithin the industry? -trategic 5roup Mapping: 1trategic group mapping is a techni-ue "or displaying the di""erent mar$et or competitive positions that rivals "irms occupy in the industry. (hich companies are strongly position & which are wea$ly positioned is an integral part o" analyzing on industry competitive structure. !he best techni-ue "or revealing the mar$et positions o" industry competitors is strategic group mapping. !t helps to understand to competitive positions among rivals 'ithin in industry:4 a) Identi"ying the competitive characteristics that di""erentiate "irms in the industry. !ypical variables are priceD-uality range7 geographic coverage7 degree o" vertical integration use o" distribution channels etc. b) lot the "irms on a two*variable map using pairs o" these di""erentiating characteristics. c) )ssign "irms that "all in about the same strategy space to the same strategic group. d) #a$ing the circles proportional to the size o" the groups share o" total industry salws revenues.

*** hat do you see as they key success factors for being a successful competitor in your industry% 0escribe briefly? Identi"ying the $ey success "actors o" the industry structure in a business plan involves conducting mar$et research as part o" constructing your business plan.!he $ey success "actors you choose to trac$ "or your business help you build your competitive strategy. -tep 6 .btain and use the templates provided by resources7 such as the 1C.EE website7 to generate business plans7 including a competitive analysis. !hese can be "ound on the 1C.EE website. -tep 7 )ccess in"ormation provided by the Census.gov website7 such as economic indicators7 to e%amine the reports "or your industry and identi"y the characteristics o" success"ul companies. Identi"y your main customers and their re-uirements. -tep 8 Fetermine which $ey success "actors7 such as the ability to attract new customers7 ability to retain e%isting customers or a low cost production structure -tep 9 Fistinguish how companies whose pro"its re"lect growth in your industry are able to structure their business to cope with changes in customer needs. -tep : Identi"y your competitors products to assess their strengths and wea$nesses. /ased on your research7 plan how to structure your company to create a competitive advantage. -tep ; Ean$ your $ey success "actors by determining why customers choose between competitors7 -tep < )rticulate how you will gain mar$et share. Bist the $ey success "actors "or your industry that in"luence your company structure in the e%ecutive summary portion o" your plan. '''''''''''''''''''''''''''''''''''''''''''

***=utlook of the industry offer the company a good opportunity Involves assessing whether the industry and competitive environment is attractive or unattractive "or earning good pro"its. ?nder certain circumstances7 a "irm uni-uely well*situated in an otherwise unattractive industry can still earn unusually good pro"its. )ttractiveness is relative7 not absolute. Conclusions about attractiveness have to be drawn "rom the perspective o" a particular company. >actors to +onsider in Assessing !ndustry Attractiveness Industrys mar$et size and growth potential (hether competitive "orces are conducive to risingD"alling industry pro"itability (hether industry pro"itability will be "avorably or un"avorably impacted by driving "orces Fegree o" ris$ and uncertainty in industrys "uture 1everity o" problems "acing industry 0irms competitive position in industry vis*G* vis rivals 0irms potential to capitalize on vulnerabilities o" wea$er rivals (hether "irm has su""icient resources to de"end against unattractive industry "actors