CSTR Notes 1-5 (Gaurav Pansari)/CSTR Summary Notes – Session 1-5 Term 2

Contents Contents................................................................................................................................................................................................................................................... 1 1. Porter’s 5 competitive forces........................................................................................................................................................................................................... 2 1.1. Use of 5 forces (strategy in practice)....................................................................................................................................................................................... 3 1.2. Steps in Industry Analysis......................................................................................................................................................................................................... 3 1.3. Avoid Pitfalls............................................................................................................................................................................................................................. 3 2. New Game Strategies - Roberto Buaron - Mckinsey ....................................................................................................................................................................... 4 2.1. The Business System................................................................................................................................................................................................................ 4 3. Competitive Advantage – Nature and Sources – Robert Grant....................................................................................................................................................... 5 3.1. Sustaining competitive advantage – mitigating competition imitation .................................................................................................................................. 5 3.2. Porter’s Generic Strategies – source of competitive advantage ............................................................................................................................................. 6 4. VRIO - Looking inside for competitive advantage – Jay Barney....................................................................................................................................................... 7 5. How Industries Change – Anita McGahan ....................................................................................................................................................................................... 9 5.1. Four Trajectories of change ..................................................................................................................................................................................................... 9 Unsolicited Gyaan  Understand this – There is no textbook approach. Each of the methods given are models made by different management gurus for no one single task  What can be suggested for understanding competitive scenario is as follows: 1. Dissect industry structure – Porter baba’s 5 pandavas. Do not think about firm but industry. Focus on what’s important – mind charts can help 2. Dissect VRIO – Ask each question at each step. What’s your mojo? 3. Dissect business system and look for sources of competitive advantage – (cost/ differentiation) – Who’s the gabru? This study source was downloaded by from CourseH on :47:15 GMT -05:00 Page 2 1. Porter’s 5 competitive forces1 1 NOT FORCES – Industry growth, Technology, Government, Complementary products – these affect 5 forces – evaluate how. Threat - New Entrant • Barriers to entry: 1. Supply side EOS - low costs. 2. Demand side EOS - Network effects. eg. FB 3. Customer Switching cost eg. SAP ERP 4. Capital requirement - incl credit, inventory, advertisement 5. Incumbency advantage - cumulative experience, brand identity 6. Distribution access blocked - Eg. shelf space displacement 7. Government policy - eg. Liquor license 8. Expected retaliation - history of pushback, substantial resources, likely price war Supplier Bargaining Power • High Costs • Factors: 1. Concentrates/ Monopoly - Eg. Microsoft 2. Supplier not dependent on industry 3. Switching costs of firm. eg. SAP 4. Differentiated product. Eg. Pharma 5. No substitute. Eg. Pilots 6. For