Day 3 - Management

Creating Presentations using PowerPoint

STRATEGIC MANAGEMENT


SWOT ANALYSIS TEMPLATE HANDOUT

SOURCE: http://en.wikipedia.org/wiki/Swot_analysis
SWOT ANALYSIS

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. 
A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning, has been the subject of much research
  • Strengths: attributes of the person or company that are helpful to achieving the objective(s).
  • Weaknesses: attributes of the person or company that are harmful to achieving the objective(s).
  • Opportunities: external conditions that are helpful to achieving the objective(s).
  • Threats: external conditions which could do damage to the objective(s).

PORTER'S FIVE FORCES

SOURCE: http://en.wikipedia.org/wiki/Porter%27s_five_forces  
The threat of the entry of new competitors
Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by incumbents, the profit rate will fall towards zero (perfect competition).
  • The existence of barriers to entry (patents[1], rights, etc.) The most attractive segment is one in which entry barriers are high and exit barriers are low. Few new firms can enter and non-performing firms can exit easily.
  • Economies of product differences
  • Brand equity
  • Switching costs or sunk costs
  • Capital requirements
  • Access to distribution
  • Customer loyalty to established brands
  • Absolute cost advantages
  • Learning curve advantages
  • Expected retaliation by incumbents
  • Government policies
  • Industry profitability; the more profitable the industry the more attractive it will be to new competitors

The intensity of competitive rivalry

For most industries, the intensity of competitive rivalry is the major determinant of the competitiveness of the industry.
[2] used by a company which can intensify competitive pressures on their rivals. How will competition react to a certain behavior by another firm? Competitive rivalry is likely to be based on dimensions such as price, quality, and innovation. Technological advances protect companies from competition. This applies to products and services. Companies that are successful with introducing new technology, are able to charge higher prices and achieve higher profits, until competitors imitate them. Examples of recent technology advantage in have been mp3 players and mobile telephones. Vertical integration is a strategy to reduce a business' own cost and thereby intensify pressure on its rival.

The threat of substitute products or services

The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives:
  • Buyer propensity to substitute
  • Relative price performance of substitute
  • Buyer switching costs
  • Perceived level of product differentiation
  • Number of substitute products available in the market
  • Ease of substitution. Information-based products are more prone to substitution, as online product can easily replace material product.
  • Substandard product
  • Quality depreciation

The bargaining power of customers (buyers)

The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes.
  • Buyer concentration to firm concentration ratio
  • Degree of dependency upon existing channels of distribution
  • Bargaining leverage, particularly in industries with high fixed costs
  • Buyer volume
  • Buyer switching costs relative to firm switching costs
  • Buyer information availability
  • Ability to backward integrate
  • Availability of existing substitute products
  • Buyer price sensitivity
  • Differential advantage (uniqueness) of industry products
  • RFM Analysis

The bargaining power of suppliers

The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices for unique resources.
  • Supplier switching costs relative to firm switching costs
  • Degree of differentiation of inputs
  • Impact of inputs on cost or differentiation
  • Presence of substitute inputs
  • Supplier concentration to firm concentration ratio
  • Employee solidarity (e.g. labor unions)
  • Supplier competition - ability to forward vertically integrate and cut out the buyer
VARIABLE & FIXED COSTS





VARIABLE COSTS – The cost of labor, material, or overhead that changes according to a change in the volume of production costs.
  • Cost of Goods Sold (COGS) –
    • Direct costs attributable to the production of goods sold by a company
    • Includes material costs and direct labor cost
    • Excludes indirect cost like advertising or R & D
  • Other

FIXED COSTS – A cost that does not vary depending on production or sales levels
  • USAIIRDO 
  • Utilities Expense
  • Salaries Expense
  • Advertising Expense
  • Interest Expense
  • Insurance Expense
  • Rent Expense
  • Depreciation Expense
  • Other
TOTAL COSTS = FIXED COSTS + VARIABLE COSTS




CLICK HERE FOR ADDITIONAL INFORMATION WEBSITES TO HELP WITH YOUR PROJECT:


http://mastersprogram-mrfilipinas.blogspot.com/2010/07/websites-for-business-plan-research.html


http://www.investopedia.com/articles/pf/10/why-startups-fail.asp

CHECKPOINTS

1.) Complete 4 P's, SWOT (and / or Porter's Five Forces if applicable)  on Presentation
2.) Start researching your expenses.

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