BeBeyond_常用商业分析工具

BeBeyond Business

Frameworks Introduction

The table on next page is an abstract of useful frameworks and tools in Business. You can apply these frameworks to understand better about marketing, business case analysis.

Who should read these frameworks?

?Applicants for Marketing: please read 4P analysis, Porter’s 5 C forces ?Applicants for Consulting: please read carefully all frameworks frequently used in case interview.

?Applicants for Sales: please read PRODUCT part in 4P analysis to think about product difference.

?Applicants for Auditing: please read the form to understand what business risk is.

Typical business issues and related frameworks

BUSINESS ISSUES POTENTIAL FRAMEWORK

Profitability (in general

operations related question)

Market Expansion (in general strategy related question)

Opportunity Assessment: Always “think internal and external factors”

- Product (e.g. new product launch)

Product Life Cycle curve - Business Unit Core competencies Value Chain

- Overall market

- Porter’s Five Forces

- BCG matrix

- Assess valuation / maximization

Net Present Value

Competitive Analysis 3C’s (Customer, Company, Competition)

SWOT (Strengths, Weaknesses, Opportunities, Threats) Marketing Strategy

4P’s (Product, Price, Promotion, Place)

Market expansion and Opportunities Assessment

? Market expansion matrix

? BCG Matrix

? Choosing a strategy

? Industry analysis: Porter’s five forces

? Internal - External factors

? Acquisition analysis

? Value Chain Analysis

? Product Life Cycle

Framework for Low cost vs. Niche player

Strategy

Low Cost

Differentiation

Required Capabilities Requires large and dedicated

manufacturing facilities. Lean overhead.

Requires ability to identify and deliver

on non-price based purchase criteria. You need strong marketing, flexible manufacturing, etc.

Typical Markets

Commodity, low-growth markets belong to this category, and in general, markets where products present no differentiation and little brand awareness. In these markets, customers make their purchasing decisions following non-price factors like quality, delivery, features, etc.

Market Timing Markets are mature or declining Markets can be emergent, growing or declining

Examples Grain, gold, paper, floppy disks, transportation

Breakfast cereal, formal attire, wine

Porter ’s 5 Forces - Industry Analysis

This framework is applicable to new business opportunity and firm strategy questions.

Barriers to Entry increase with:

?Economies of scale

?Proprietary product differences

? Brand recognition

?High switching costs for the

customer

? Capital requirements

?Difficulty to access distribution

channels

?Absolute cost advantage of

incumbents

9 Learning curve advantages

9Access to necessary inputs

9Proprietary low-cost product

design

? Government regulation,

restrictions on entry

? Expected retaliation Buyer Power increases with:

? Bargaining leverage

?Buyer concentration, Small

number of buyers

?Low buyer switching costs

? Buyer information

?Buyer ability to integrate

backward

?Availability of substitute products

?High price elasticity

? Low product

differentiation ?High brand recognition of buyers products

?Low impact on buyer's product

quality.

?Decision makers' incentives

Rivalry increases with:

? Industry growth

?High Fixed costs + low variable costs

?High value added

? Intermittent overcapacity

? Low product

differentiation ?Low brand recognition.

? Low switching costs.

?Number of competitors.

? Corporate stakes.

?High fixed costs or highly

specialized assets.

?High barriers to exit. Supplier Power increases with:

?Differentiation of inputs

?Importance of supplier's

product/service in cost

?Structure of industry.

?Lower Switching costs of

suppliers

?Higher impact of inputs on cost or differentiation

?Lower Number of substitute

inputs

?Higher threat of forward

integration.

?Lower importance of volume to

suppliers

?Lower Supplier concentration

Threat of substitute increases with:

?Relative performance of substitutes.

?Lower switching costs.

?Higher buyer propensity to substitute.

Internal-External Factors

This framework is especially applicable to new market and company strategy questions.

The question you are looking to answer is whether the firm strategy aligns internal factors with external environmental considerations.

Internal Considerations

9Core competencies of the firm

9Company mission and goals (consider its objectives for employees, the community, the environment, technology, etc.)

9 Company organizational structure

9Firm resources (labor, technology, internal systems)

Environmental Factors

9Industry trends (including a five forces analysis)

9Constraints (government regulations, laws, union/labor agreements, societal pressures, etc.)

9Competitor activities (plans for expansion, financial strength, etc.)

Product Life Cycle Curve

Phase 1

On this phase, the focus should be on R&D and engineering. You should refer to product definition and need generation with little or no competition.

Phase 2

This phase should emphasize marketing. The challenge is now to manage rapid growth while maintaining quality. You should expect new entrants

Phase 3

This phase focuses on manufacturing and cost. Prices fall and competition intensifies.

Phase 4

High cost and low share competitors exit. This phase focuses on being low-cost or niche player.

Competitive analysis: The 3 C’s - Customer, Company, Competition

This is a basic framework but is very useful. It is especially applicable to business strategy and new market opportunity questions.

Marketing strategy: the 4 P’s

Apply this framework to marketing and new product development questions.

Product

I. Must fit within positioning decision and market segmentation (e.g. high end, low

end; consumer, industry)

II. Differentiated good vs. commodity

III. Features and capabilities

IV. Reliability, quality, brand name, reputation

size

V. Packaging,

warranties

VI. Service,

VII.Future strategy for the product

Placement (Distribution)

I. Channel (decision based on product specifics, level of control desired and

margins desired)

II. Coverage - tradeoff between coverage levels and costs

III. Inventory - levels, turnover, carrying costs

IV. Transportation - alternatives, efficiencies, costs

Promotion

I. The Buying Process:

A. Consumer awareness for the product

B. Interest for the product

C. Trial

D. Repurchase

E. Loyalty

II. Select sales method: Pull (advertising...) or Push (discount to distributor...)

III. 5 categories of promotional efforts:

A. Advertising: medium, reach (share of target market reached) and frequency

(number of times reached).

B. Personal Selling: when direct contact with buyer is needed.

C. Sales Promotion: Incentives to consumer, sales force and channel members.

?Consumer incentives: coupons, refunds, samples, premiums, and contests.

?Trading force incentives: Sales contest, Point of purchase displays, spiffs (payments to dealers), trade shows, franchise reputation, in-store

demonstrations.

D. Public Relations and Publicity.

E. Direct sales.

Price

I. Considers both retail price and discounts.

II. What strategy? MC=MR? Skim (high price, make profits now)? Penetrate (low price, gain market share)?

III. Seek volume or profits?

IV. Perceived value, cost-plus-margin pricing?

V. How does price relate to the market, size, product life cycle, and competition?

VI. Economic incentives to channel (commissions, margin).

VII. Establishes barriers to entry.