Documente Academic
Documente Profesional
Documente Cultură
Resources Resources
Resource
Money markets Money
Taxes, Services,
goods money
Services, Taxes,
money goods
Money Money
Middlemen
Goods and services markets Goods and services
Le
MACROENVIRONMENT
gi
s la
y
tio
og
n
ol
an
COMPETITVE ENVIRONMENT
hn
d
c
Te
re
gu
la
Suppliers Substitute
tio
ns
COMPANY
ics
So
ph
ci
al
ra
og
V
New Entrants
al
m
ue
de
sa
n
nd
tio
la
Li
pu
fe
Po
le
s
Value $
Sales
Profit
Break-even Point
Total
Variable costs
costs
Fixed
Current sales level costs
0
0 Units sold
1200
Total revenue
1000
Target profit
Total cost
800
600
400
) s dnas uoht ni ( sr all o D
Fixed cost
200
0 10 20 30 40 50
35 Total
Revenue
30
25
Total Costs
$ Millions
20
15
10 Fixed
Expenses*
0
50 100 150 200
Break-even Volume Units Sold (‘000)
(90,000)
Profit Loss
* Fixed Expenses = Marketing Expenses and Other Direct
Expenses
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Break-even Regions
Cash flow
$
EVA break-even
P&L break-even
Early Later
Seed Capital Growth Growth
& Early Stage
Enterprise Enterprise
Cash Flow Mezzanine Public Financing
3rd Market
2nd
1st Initial
Public
Offering
Time
Valley Break-even
of Death point
Emerging Growth
S
D
F G
E
Price
A B
D
0
Quantity
Average cost
LACs*
Output
Price
e = 0 (total
Price
e=-
8
inelastic
demand)
e<-1
e=-1 e=-
8
(total elastic
demand)
e>-1
Quantity Quantity
e=0
P1
Price
(-)
P2
P1
(-)
Price
(+) P2
(+)
0 Quantity 0 Quantity
Demand is elastic and expenditure increases Demand is inelastic and expenditure increases
when price falls from P1 to P2 when price falls from P1 to P2
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Inelastic and Elastic Demand
P2 P’ 2
P1 P’ 1
eci r P
Q 2Q 1 Q’ 2 Q’ 1
Quantity Demanded per Period Quantity Demanded per Period
(a) Inelastic demand (b) Elastic demand
Sales
Sales and Profits ($)
Profit
Volume or value
Market potential
Market volume
Market share
Time
Sales
Profits
Introduction Growth
Unit
Sales A
Volume
B
Time
Note: A = Moderate Growth, B = Commodity, C = Decline
Development
A
C
Growth B
D
THE INDUSTRY‘S STAGE Competitive
shakeout F
IN THE EVOLUTIONARY
LIFE CYCLE
E
Maturity
Saturation
G
H
Decline
Potential Product
Augmented Product
Expected Product
Generic Product
E
A
B High price
Low price
C
D
Low quality
Environment
Environment
Environment
Product Price
Place Promotion
Environment
Marketing
Mix
Channels
Product variety
Coverage
Quality
Assortments
Design
Features Product Place Locations
Inventory
Brand name
Transport
Packaging
Sizes Target
Services
Warranties Market
Returns
Price Promotion
List price Sales promotion
Discounts Advertising
Allowances Low quality Salesforce
Payment period Public relations
Credit terms Direct marketing
Marketing
activities Demand
End
Manufacturer Intermediaries
Push Strategy users
Demand
Marketing activities
Demand Demand
End
Manufacturer Intermediaries
Pull Strategy users
Product
Promotion Price
Customer
Service
Place People
Processes
2 Objectives
Marketing Plan
Forecasts 5
sales quantify:
market share costs
market expansion sales
leadership profits
satisfaction market share
3 Strategy Control 6
segment – target
organization structure
price / quality
measurement tools
product positioning
check frequency
differentiation
=> Corrective actions
diversification
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The PDCA Cycle
Plan
Act Do
Performance
Check
Time
Decision
Process
Customer
Satisfaction
Value Enterprise
Improvement Learning
Benchmarking
Numerous
environmental
opportunities
Cell 3: Cell 1:
Supports a turnaround- Supports an
oriented strategy aggressive strategy
Critical Substantial
internal internal
weaknesses strengths
Cell 4: Cell 2:
Supports a Supports an
defensive strategy diversification strategy
Major
environmental
threats
Strengths Weaknesses
Opportunities Threats
Support
Firm infrastructure
activities
gi n
Human resource management
Mar
Technology development
Procurement
ngi
Mar
Primary activities
FIRM INFRASTRUCTURE
HUMAN RESOURCES MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
MARGIN
Firm infrastructure
Mar
gin
Technology development
Procurement
Mar
Inbound Operations Outbound Marketing Service
gin
logistics logistics and sales
Primary Activities
New Market
Diversification
Markets development
Existing New
New
Market
Existing product
penetration
development
MARKETS
Market
New Diversification
development
Existing New
Customer Customer
Existing loyalty extension
CUSTOMERS
Customer Customer
New acquisition diversification
Broad
Product Diversification
Moderate
Narrow
Narrow Moderate Broad
Market Diversification
High Low
Question
High Star Mark
MARKET
GROWTH
RATE
Cash
Low Dog
Cow
High Low
High
E Divest
B
D
MARKET
GROWTH
RATE F
Low C
G Divest
MARKET
GROWTH 10%
RATE
Cash generating
High Dog businesses
businesses
6%
4% 6 7
2%
8
x1
x 01
x 1. 0
Relative Market Share
Small Large
SIZE OF ADVANTAGES
Small Large
Stalemate Volume
ROI ROI
Few
Many
Structure
Strategy Systems
Superordinate
Goals
Skills Style
Staff
Banner
Brand
Business
Units
Core
Products
(Platforms)
Core
Competencies
Processes
Core
Competencies
Technologies Capabilities
Competency 1
High
Competency 5
Competency 4
Market View
Competency 6
Competency 2
Low
Competency 3
COMPETITIVE POSITION
Low
INDUSTRY Medium
ATTRACITVENESS
High
Industry attractiveness
High
HOLD BUILD BUILD
Low
HARVEST HARVEST HOLD
High Business F
Business A
LONG-TERM
INDUSTRY Medium
ATTRACTIVENESS
Business C Business B
INDUSTRY ATTRACTIVENESS
Manage
Invest Invest Selectively
for Earnings
BUSINESS STRENGTH
Manage
Invest Selectively Harvest or
for Earnings Divest
Manage
Harvest or Harvest or
Selectively
Divest Divest
for Earnings
Very Attractive
Protect Protect
Market Attractiveness
Very Unattractive
Very Weak Very Strong
Competitive Advantage
Clutches
Fuel
Medium Pumps
TE KR A M
Flexible
SS E NE VI T C ARTT A
Diaphragms
2.33
Relief
Valves
Low
1.00
5.00 3.67 2.33 1.00
(a) Classification
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The Risk-Reward Diagrams
High
RISK
Low High
REWARD (NPV)
Low
Consumer
Supply flow
UPSTREAM Centre of gravity DOWNSTREAM
ORGANIZATIONS of a manufacturing ORGANIZATIONS
industry
Commodity Proprietary
Standardize Customize
Maximize end users Target end users
Low-cost producers High margins
Sales push Marketing pull
Line-driven organization Line/staff
Process innovation Product innovation
Capital budget R & D/advertising budget
Capital-intensive People-intensive
Technological know-how Marketing skills
Supply and trading/manufacturing and engineering Product development/marketing
Potential
PotentialEntrants
Entrants
Bargaining Bargaining
Industry
power of Industry
competitors power of
suppliers competitors buyers
Suppliers Buyers
Suppliers Buyers
Rivalry
Rivalryamong
among
existing firms
existing firms
Substitutes
Substitutes
Firms in other
industries
offering
Substitute
Products
Suppliers of
raw materials,
RIVALRY
parts,
AMONG Buyers
components or
COMPETING
other resource
SELLERS
inputs
Potential
New Entrants
Potential Entrants
Threat of
new entrants
Industry
Bargaining power Bargaining power
competitors
of suppliers of buyers
Suppliers Buyers
Rivalry among
existing firms
Threat of
substitute products
or services
Substitutes
EXIT BARRIERS
Low High
PROFITS=LOW PROFITS=LOW
Low RETURNS=STABLE RETURNS=RISKY
ENTRY
BARRIERS
PROFITS=HIGH PROFITS=HIGH
High RETURNS=STABLE RETURNS=RISKY
Old/Existing New/Creative
KFS Aggressive
KFS Aggressive
Compete initiatives
initiatives
(wisely)
Route 1 Route 3
Intensify
Intensifyfuntional
funtional
differentiation Ask
differentiation Ask„why-why‘s“
„why-why‘s“
Strategic
Relative Strategicdegrees
degreesofof
Avoid Relativesuperiority
superiority Freedom
head-on Freedom
competition
Route 2 Route 4
Exploit
Exploitcompetitor‘s
competitor‘s Maximize
weakness Maximizeuser
user
weakness benefit
benefit
Focus
COMPETITIVE ADVANTAGE
Broad
Target
Cost Leadership Differentiation
COMPETITIVE
SCOPE
Narrow
Cost Focus Differentiation Focus
Target
TYPE OF COMPETITVE
ADVANTAGE BEING PURSUED
MARKET Best-Cost
TARGET Provider
Strategy
Marketer Innovator
Emphasizes Emphasizes
Enhanced
• Quality • Quality
• Speed
• New product/service
• Development
Caretaker Innovator
Emphasizes Emphasizes
• Price/ cost • Quality
Basic
• Dependability • Product/service
• Quality • Performance
• Flexibility
• Speed
Traditional Enhanced
CONTROL VARIABLES
MOTIVATION VARIABLES
CONDITIONING
VARIABLES
FIRM
FIRMSTRATEGY,
STRATEGY,
STRUCTURE
STRUCTUREAND
AND
RIVALRY
RIVALRY
FACTOR DEMAND
FACTOR DEMAND
CONDITIONS CONDITIONS
CONDITIONS CONDITIONS
RELATED
RELATEDAND
AND
SUPPORTING
SUPPORTING
INDUSTRIES
INDUSTRIES
Low High
Imposed
Low „Formula“ priorities
EXTENT OF
CENTRAL
DIRECTION
Free Open
High
bargaining competition
• Relative cost
High
Joint Foreign Foreign
venture branch subsidiary
Joint
Export Licensing/ venture
Low
Low High
MARKET COMPLEXITY
Finance Marketing
and Control
GOALS
Purchasing Distribution
Labor Manufacturing
Return on
Investment
Market Share
V
ue al
ue
al
V
Product/service
differentiation
Customers
Needs seeking benefits
at acceptable prices
V
al
ue
u e
al
V
t
en En
nm vi
ri o ro
nm
v
En en
t
Strategy
Structure Culture
En t
vi
ro en
nm nm
en iro
v
t En
Organizational
effectiveness
Controlling R&D
CEO CEO
Chemicals
PROJECT DEPARTMENTALIZATION
Alpha Project
E E E E
Project Leader
Beta Project
E E E E
Project Leader
Gamma Project
E E E E
Project Leader
Task
Structure People
Technology
TASK
INDIVIDUAL
NEEDS
NEEDS
GROUP
NEEDS
TEAM
Shaper
Company Worker
t
Plan
Chairman
Finisher
ator
Monitor-Evalu
Resource-Investigator W orker
Team
Stage V
Adjourning
Group effectiveness
Stage IV
Performing
Stage III
Norming
Stage II
Storming
Stage I
Forming
Time
leads to leads to
passive work
attitude
Theory Y
strenghten following
leads to allow
Self-Actualization
Needs
(self-development and
realization)
Esteem Needs
(self-esteem, recognition, status)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
Friends in
Friendship Belongingness Needs Work Group
•SALARY
•SALARY
•ADMINISTRATION
•ADMINISTRATION •ACHIEVEMENT
•ACHIEVEMENT
•SUPEVISION
•SUPEVISION •RECOGNITION
•RECOGNITION
•COMPANY
•COMPANYPOLICY •RESPONSIBILITY
•RESPONSIBILITY
POLICY
•STATUS
•STATUS •ADVANCEMENT
•ADVANCEMENT
•WORKING
•WORKING •NATURE
•NATUREOF
OFWORK
WORK
CONDITIONS
CONDITIONS
1 2 3 4 5 6 7 8 9
Concern for production
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Situational Leadership
LEADER BEHAVIOUR
Share ideas Explain
and facilitate decisions
RELATIONSHIP BEHAVIOUR
in decision- and provide
making NG opportunity
TI
(Supportive Behaviour)
PA
CI for
TI
SE
R clarification
PA
LL
IN
S3 S2
G
NG
TE
TI
LL
GA
Provide
IN
LE
G
specific
DE
FOLLOWER READINESS
HIGH MODERATE LOW
R4 R3 R2 R1
Able and Willing Able but Unwilling Unable but Willing Unable and Unwilling
or Confident or Insecure or Confident or Insecure
Stories
Rituals and
routines Symbols
THE
PARADIGM
Control
systems Power
structures
Organizational
structures
Development of Corporate
The paradigm Development of Implementation Corporate
The paradigm strategy Implementation Performance
strategy Performance
if unsatisfactory
Step
Step11
Tighter
Tighter
controls
controls
Step
Step22
Reconstruct
Reconstructoror
develop
developnew
new
strategy
strategy
Step
Step33
Abandon
Abandonparadigm
paradigm
and
andadopt
adoptnew
newone
one
Strategy
Goals, Strategy Policies
Mission Goals, formulation Policiesand
and
Mission objectives formulation procedures
objectives procedures
• •Alternatives
Alternatives
• •Evaluation
Situation Evaluation
Situationanalysis
analysis and
andchoice
choice
• •Enviromental
Enviromental
opportunities/
opportunities/
threats
threats
• •Organizational
Organizational
resources
resourcesand
and
competences
competences
Strategy
Strategy
implementation
implementation
and
andplanning
planning
Strategic control
Mission
Mission
WHAT
WHAT ananorganization
organizationisisseeking
seekingtotododo
Objectives
Objectives
Strategy
Strategy
HOW ananorganization
HOW organizationwill
willachieve
achieveitit
Tactics
Tactics
4 H
5
4 3
3 F
4 9
5 5
KEY: 9
Activity
Critical path
Event
Earliest event time
Event number
Large collaboration
coordination
"?"
delegation
SIZE OF red tape
ORGANIZATION
direction control
creativity
autonomy evolution: stages of
growth
revolution: stages of
Small leadership crisis
Young Mature
AGE OF ORGANIZATION
The
The Early Mainstream
Market Market
The
Chasm
Te
c Vi Pra Co Sk
En hnol sio g ma n se r ep
thu o g n ari vat tic
sia y es tist s
sts s ive
s
Steady and
Order predictable Slope = demand rate
quantity demand (D)
Q
Average inventory = Q / 2
Inventory
level
Time
Q/D
Instantaneous deliveries at rate of D / Q per period
Total costs
Costs
Holding costs
Order quantity
CIM
CAD/CAM PPS
Production Programm Planning
C
CAD
Quantity Planning
Place Order
CAM
D Control Order
s ess ec or p ss e ni s u B
ec or p ss e ni s u B
e n r e mot s u C
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Total Quality Management
• Quality systems
• Quality costing Inspection
• Problem solving
• Quality planning
Quality control
• Statistical methods
Quality assurance
• Process performance
• Quality standards Total quality management
• Error detection
• Rectification
The
Operation
Materials management
Supply chain management
Profit Variance
Liabilities Liabilities
Assets $100 $113
Assets
$170
$190
Owner‘s equity
$70 Owner‘s equity
Expenses $77
Revenues $469.8
$480
Net Profit
$10.2
Retained earnings
$7
Dividends
$3.2
Cash
Raw materials
Receivables inventory
Finished goods
inventory
Debt
Entrepreneurial concerns
Sources and Deal
Time to out of cash Equity
Structure
Future alternatives Other
Burn Rate
Angels
High
FFF
VCs
Entrepreneur
PERCEIVED
Moderate
RETURN Realistic
Investors
Banks
Low
Operating profit margin Capital turnover Financial structure ratio Financial cost ratio Tax effect ratio
Earnings before interest and tax Sales Invested capital Earnings before tax Earnings after tax
Sales Invested capital Owner‘s equity Earnings before interest and tax Earnings before tax
Cash
Operating costs
Working Capital
requirement
Fixed assets
Economics
Economics
What
Whatare
are
the
thekey
key What What are my
Changing assumptions What‘s How can What What are my
Changing assumptions What‘s How can dimensions choices
About important dimensions choices
importanttoto profit
Customer
Customer About profitbebe matter
matterthe now?
Priorities customers customers? made? the now?InInthe
the
Priorities customers customers? made? most? future?
and most? future?
and
economics?
economics?
Technology
Technology
Are
Arethe
thebest How
best What‘s my How long HowcancanI I
Which choices What‘s my How long prepare
Which choices best will prepare
ones internally best willthis
this for
ones internally business design for
are business designbebe
arebest? consistens ongoing
best? consistens design? valid? ongoing
integratable? design? valid? redesign?
integratable? redesign?
The Center
The Center of Gravity
of Gravity
The
center
of
gravity
Assets/ Product/
Inputs, Raw The
Core Service Channels
Material Customer
Competencies Offering
Assets/
The Inputs, Raw
Channels Offering Core
Customer Material
Competencies
Purchase Criteria
Customer Anger
Preferences
Power
Assets/
Customer Inputs, Raw
Decision-Making Process Channels Offering Core
Priorities Material
Competencies
Purchase Occasion
Buyer Behavior
Functional Needs
Systems Economics
Profit
Price
Volume
Base Business
Other Components
Buyers Sellers
$/Unit
Cost
Price
Time
$/Project
Revenue
Cost
Project Type
Other Forms
Key Asset
Base
Business
Spin-Outs
Return on Sales
Generalist Specialist
Profit Margin
Hardware/Base Consumables/
Product Follow-on Product
Profit Margin
Market Share
Price/Unit
Market Brand
Price Price
100 %
S
Revenue
Profitability by Region
$/Unit
Revenue
Cost
Size of Transaction
$/Unit Price
Cost
Utilization
Base Follow-on
Product Products/Services
Time
Return on Sales
Cost/Unit
Cumulative Experience
$/Unit
Product
Blancpain
Omega, Longines,
Rado
Coca-Cola
Fountain
Brand
Vending
1996
Distribution
Consumer Grocery Logistics Bottling Syrup
Fountain Coca-Cola
Mega Brand
Coca-Cola, diet Coca-
Vending Cola, Caff. Free, diet
Caff. Free, Cherry,
The Profit Zone Diet Cherry
no participation
Mutual Fund
Investors Companies
The Profit
Zone
Intel
$/Unit
AMD
Cost
Price
Q2 Q4 Q6 Q8 Q10
Quarters Post-Launch
Thermo
Thermo Spectra
Instrument
Systems Thermo
Optek
Thermo
Voltek
Thermo-Electron Thermedics
Thermo
Sentron
Thermolase
Thermo
Trex
Trex
Medical
OEMs
Microsoft
Applications
Windows Customers
Applications
Developers
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