ENGR193A_293A_INDUSTRYANALYSISINTHETELECOM_ITSPACE

1、ENGR 193 A/293 A: INDUSTRY ANALYSIS IN THE TELECOM/IT SPACEWeek 5: October 26, 2010Pick up Bluetooth packetTonights ScheduleAny issues to discuss?How are teams doing?Thoughts on speaker last weekOther questions/issuesBasic information on BluetoothSWOT application: LGApple, Inc. 2008 case discussionB

2、egin metrics and financial ratios discussionTeam projects check inSWOT AnalysisStrengths: capabilities that enable your company to perform well (how can they be leveraged) (Internal)Weaknesses: characteristics that prohibit your company from performing well (that need to be addressed) (Internal)Oppo

3、rtunities: trends, forces, events and ideas that could be important in the future of your company (External)Threats: possible events/forces outside of the companys control that the company needs to plan for (External)Source for section: Harvard Business School Press, excerpted from Strategy: Create

4、and Implement the Best Strategy for Your Business, 2005, Harvard Business School Publishing CorporationSWOT AnalysisStrengths (Internal)Skill, knowledge, experienceOrganizational resource or competitive capabilityMarket advantageCompetitive assetsWeaknesses (Internal)Missing asset needed to compete

5、effectivelyCondition that places firm at a disadvantageCompetitive liabilities or unproven abilitiesOpportunities (External)External characteristics that provide potential competitive advantage or growthThreats (External)Factors that may undermine existing business model, including HR, technology, n

6、ew products, regulation, politics, demographicsExternal AnalysisCustomersPricing constraintsCompetitorsDistribution issuesTechnologyEconomic FactorsRegulationLifestyle trendsSuppliersPotential partnersExternal factors: looking outside the company for threats and opportunitiesLifestyle TrendsLarger l

7、ifestyle trends impact our lives today and in the futureMany sources of informationYankelovich Monitor: Since 1971, longest-running, most in-depth study of consumer value and lifestyle trends, featuring an annual study of several thousand adult consumers (ages 16+) Teenage Research Unlimited (TRU St

8、udy): Since 1983, 1,600-plus teens (12-19) and 1,600 twenty-somethings (21-29), nationally representative of the U.S. population in terms of age, gender, ethnicity, regionCustomers: Questions to ExploreWho are they/customer profile: segmentationHow are customers targeted by company?Current usage of

9、companys product or serviceSatisfaction with companys product or servicePrice sensitivityCustomer loyaltyMarket shareSegmentationSegment by:Demographics:AgeGenderIncomeRaceGeographyBehavior:Usage of product or servicePsychographics: based on personality, values, attitudes, interests, or lifestyles N

10、eed to understand the impact of each segment on company profitabilityPrice SensitivityPrice elasticity of demandImpact of price changes on customer demandsPercentage increase in price/Percentage decrease in quantity = Price elasticity of demandThe higher the ratio, the more sensitive customers are t

11、o price changesImpact of price elasticity on customer behaviorCompetitionDefine the competitive arena specificallyDefine the competitorsAssess the attractiveness of the competitive arenaUse Porters Five Forces ModelTechnology and RegulationEmerging technologyView as a threat and an opportunityImpact

12、s business processes, not just businessesRegulatory issuesView as a threat and an opportunityExamples: safety, PUC, free trade, etc.Other External FactorsLarger Economic IssuesHow will our current economic outlook impact business in the next 3 5 years?DistributionPartnersSuppliersInternal FactorsInt

13、ernal factors: looking inside the company for strengths and weaknessesCurrent performanceCost structureBrand power Product portfolioR&D pipelineTechnical masteryEmployee skillsCompany cultureFinancial PerformanceKey financial information needed:Cash flow trends: cash received or expended over a peri

14、od of time Access to outside capital: if cash flow is not sufficient Return on invested capital: how well a company generates cash flow relative to the capital it has invested in its business: (net operating profit taxes)/total capitalReturn on assets: how profitable a companys assets are in generat

15、ing revenue: net income/total assetsSegment, unit and company profitability trendsBrandingWhat is the awareness of the brand?What is the attitude toward the brand among customer and non-customers?How important is the brand in the success of the product or service?Core CompetencyCore competency: a co

16、mpanys expertise or skills in key areas that directly produce superior performanceSuperior performance must also be highly valued by customers, andHard to copyDurableAppropriateSustainable (substitutes)Superior to the competitionAssessment of CultureWhat is the culture of the company?How does manage

17、ment affect that culture both positively and negatively?Is the culture of the company consistent with its product and service offerings?Does the culture of the company assist or inhibit the companys success?Does the company have the right employees in place?SWOT Analysis: LG Electronics MobilecommWe

18、ll apply SWOT analysis to LG Electronics Mobilecomm traditional wireless phones and smartphonesExternal: threats and opportunitiesInternal: strengths and weaknessesLifestyle Trends: T&OTechnical competence OHands free OPhone durability/robustness (Casio) TMove toward personal computing integration T

19、Demand for touch screens (only 2 smartphones) - TCustomers: T&OVery strong cust sat traditional phones OMinimal smartphone presence TAs customer grows in sophistication, where do they go? TDesire to serve more corporate customers OSuppliers: T&OCarriersCan the carrier include additional service “add

20、 ons” or sell a premium service plan TA solid phone to sell to a basic needs customer ODrives sales with lower cost phone - OHardware/parts of phoneWell-established use of components OCompetition: T&OSmartphoneExisting expertise allows easier entry into this market - OTop competitors already in the

21、marketplace (Nokia, Apple) TTraditional phonesCompetition continues to get stronger THuge advertising by competitors - TTechnology and Regulation: T&OOther External Factors: T&OLarger Economic Issues:DistributionHow will they sell their smartphones retail like Apple?PartnersSuppliersFinancial Perfor

22、mance: S&WLower margins as phone prices lower - WBranding: S&WPerceived as more entry-level/simple (grandparents) S, WStrong international presence good platform for introducing newer phones SStrong cust. sat perception with traditional phones - SCore Competency: S&WGood quality, low cost deviceDemo

23、graphics/Segmentation: S&WAssessment of Culture: S&WHierarchical?Tech savvyTrying to change their cultureLonger work weekThreats and OpportunitiesThreats:Threats & OpportunitiesOpportunities:Strengths & WeaknessesWeaknesses:Strengths & WeaknessesStrengths:SWOT Analysis LG Electronics MobilecommStren

24、gthsStrong international presenceCustomer satisfactionEase of use of devicesAffordableWeaknessesHierarchical corporate structureLimited smartphone offeringsLower profit margins on trad. PhonesVolatility of strategy/visionOpportunitiesDependency on currency?Good carrier relations?Opportunity to grow

25、into smartphonesStrong base among less sophisticated customersThreatsDependence on currency?Very strong competition, esp. in smartphonesIncreasing customer sophisticationSWOT Conclusions - LGRecommendations to LGIncrease R&D on smartphonesFocus on core competencies can you bring more smartphone capa

26、bilities to a traditional phone? Is there a mid-level phone?Position as the entry level smartphone providerStrengthen relationship with other carriers beyond VerizonWork toward more innovative cultureStop thinking about traditional wireless phones all customers are becoming more sophisticated“Apple

27、Inc., 2008” Case PromptBe prepared to discuss the following:Analyze the structure of the PC industry in the past and todayWhat were and are Apples major competitive advantages in the computer business?Do the current PC industry dynamics help or hurt Apple today? Why do you say that?Use Porter Five F

28、orces analysis and/or SWOT analysis to demonstrate your point. Please prepare to discuss for next weeks classApples Ups and DownsBusiness Week, early 1996: “The Fall of an American Icon”Business Week, 2000: Steve Jobs named as one of the top 25 executives of the yeariPhone named 2007 “device of the

29、year” by Time MagazineResults 3Q10: 10.4% market share of U.S. computer market (PC shipments, not including iPad)Source for this section: Apple Inc., 2008 Teaching Note, Yoffie, Slind, HBS 5-708-493Apples Competitive Advantages in the Computer BusinessThen:Visionary power of personal computer househ

30、old useStrong in education market (ease of use in education)Growing future customers via education market focusDesign and guiApples Competitive Advantages in the Computer BusinessNow:Integrates with multiple devices, plug and playProprietary operating system:SecurityHarder to develop s/wStructure of

31、 the PC Industry: Business/Corporate Customers1985TodayWho were the buyers?How many PCs were typically purchased?ManagersBuying a few at a timeIT managerBuying in very large quantitiesLevel of sophistication of buyers?Very unsophisticatedHighly sophisticatedWhat do the buyers want?Ease of use and se

32、t-upLess computer-specific knowledgeLess demanding wrt processing powerReliability, ease of usePriceMuch more demanding wrt processing powerWant flexibilitySummary of Business Customer:Higher sophistication and much more concentrated buying powerWhy Did the Buyers Change So Dramatically?What were th

33、e key industry drivers of change?Mobility, durationMultiple devicesUser knowledge/sophisticationRivalry in the PC IndustryHow strong is the rivalry? What are the key drivers of that rivalry?Incredibly strongBrand loyaltyObsoleteEasy entry to buildHard to compete/winBarriers to EntryAre the barriers

34、to entry high or low?SubstitutesAre there many substitutes?SuppliersDifferent types of suppliers: Who has the power?Conclusions About PC Industry TodayConclusionsApples Position Today in PC IndustryDo the current PC industry dynamics help or hurt Apple today?What is the future of Apples PC business?

35、Luxury productStrong brandPresentation DetailsPowerPoint Format15 20 minutesApproximately 15 slidesOral presentation, and hand in your slidesPanel will provide comments and feedbackWhat to Include in Your Report: For Your IndustryClearly define your industry/segment. Provide a detailed descriptionPo

36、rter 5 Forces analysis of the industry/segmentDiscussion of technical standards: Is there a current standard? How is this likely to evolve?Highlight what you think are the key issues/challenges for the industry/segmentTop competitorsKey ratios, financials in this industry/segment (and why you think

37、these are relevant). If possible, by competitorMarket share information, if availableAny other relevant informationWhat to Include in Your Report: For Your CompanySWOT analysis of your companyAn assessment of how your company compares to the competition: Use ratios, market share, qualitative informa

38、tion and any other information youve discovered from your research that will give a sense of your company versus its competitionWhat to Include in Your Report: Key Questions to AnswerWhat will this industry/segment look like in 5 years?What should your company do to be the dominant player in the next 5 to 10 years in this industry/ segment?What key strategic advice would you give to this company?Partner with another player? Who?Exit this indus