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IMPACT OF INPUTS ON COST OR DIFFERENTIATION - a determinant of the bargaining power of suppliers. The
more important an input is to the success of the buyer, the greater the
supplier power (assuming everything else is equal). [Source: M. Porter]
IMPACT ON QUALITY AND PERFORMANCE - a determinant of the bargaining power of customers. When
the quality of the buyers' products is very much affected by the industry's
product, buyers are generally less price sensitive. [Source: M. Porter] IMPLEMENTATION - doing something. Implementation is best when done in
concert with the business plans. IMPORTANCE OF VOLUME TO SUPPLIER - a determinant of the bargaining power of suppliers. When
suppliers sell to a number of industries and a particular industry does not
represent a significant fraction of sales, suppliers are much more prone to
exert power. INBOUND LOGISTICS - are activities associated with receiving, storing, and
disseminating inputs necessary to build the product or provide the service.
[Source: M. Porter] INDUSTRY - is defined via an iterative process (like calculating the square root of 75 knowing that it's somewhere between 8 and 9). An industry includes the scope of closely related products and / or services sold to one more external customers. The industry represents the entire playing field. (A business unit, or SBU, can choose to compete in some or all of the industry.) When defining an industry, it is helpful to clearly define what is not in the industry.
INDUSTRY ATTRACTIVENESS - refers to the relative industry profitability outlook for
this industry vis-à-vis the expected average U. S. industry profitability.
(For scoring, use: Very Attractive (5); Attractive (4); Neither Attractive
Nor Unattractive (3); Slightly Unattractive (2); Very Unattractive (1).) INDUSTRY GROWTH - a measure of the expected annual change in revenue, or
change in number of customers, or change in number of units sold. (For
scoring, use: Growing Rapidly (5); Growing (4); No Growth, Maturing, Flat
(3); Declining (2); Declining Rapidly (1).) INDUSTRY OVERVIEW - a general description of the industry from a industry
analyst's point of view (rather than from your own company's point of view.) INDUSTRY POSITIONING - refers to identifying current and potential industry
competitors and their competitive strategy (or lack of a clear competitive
strategy). INDUSTRY SCENARIO - an internally consistent view of what the future of the
industry might turn out to be. An industry scenario is not a forecast but
one possible future industry structure. The elements of an industry
structure scenario include: 1) those things that will remain the same
(Constants); 2) those things that will change in a predictable way
(Predetermined Variables); and 3) those things which may change in an
unpredictable way (Uncertainties). [Source: M. Porter] INDUSTRY SCENARIO VARIABLE - a significant event or condition which may or may not
occur, that will affect the industry structure differently depending on the
status (value) of that event or condition (the scenario variable). INDUSTRY SCOPE - The range of related industries in which a firm competes
with a coordinated strategy. [Source: M. Porter] INDUSTRY SEGMENT - one cell of an industry segmentation matrix. A product
variety linked to a buyer type. INDUSTRY SEGMENTATION - Industry segmentation is the division of an industry into
sections for purposes of developing competitive strategy. Industry
segmentation combines customer purchasing behavior (market segmentation)
with the behavior of costs, both production costs and the costs of serving
different customers. Industry segmentation encompasses the entire value
chain. It exposes the differences in structural attractiveness among
segments, and the conflicts in serving many segments simultaneously.
[Source: M. Porter] Sample Product Segmentation Variables: Features;
Technology or Design; Performance; Bundled versus Unbundled; New versus
Replacement; Product versus Ancillary Service. Sample Buyer Segmentation
Variables; Buyer Industry; Technological Sophistication; Buyer's Strategy;
Purchasing Process; Buyer's Size or Financial Strength; Ownership; Vertical
Integration; Type of Channel; State, Region, or Country; Country Stage of
Development. INDUSTRY SEGMENTATION MATRIX - A matrix which graphically segments an industry into both strategically relevant product varieties and strategically relevant buyer types. It also highlights competitors in their targeted industry segments. See Industry Segmentation. INDUSTRY SIZE - Total annual revenue of firms in the industry.
(Alternative: the sum of all purchases made by the industry's customers.) INDUSTRY STRUCTURE ANALYSIS - involves an analysis of the industry from the perspective of an industry analyst (rather than from the firm's perspective). This process involves examining the five competitive forces that determine industry profitability [Source: M. Porter]. The five forces are:
INDUSTRY TRENDS - list
of trends taking place within an industry which are important to
understanding the industry's future. Include government and regulatory
trends, as well as any other major trend that will impact the industry's
buyers, competitors, or suppliers. INELASTIC - see Price Elasticity. INFORMAL ORGANIZATIONAL STRUCTURE - refers to all of the behavior within the organization which arises from individual initiative, social interaction, and collective and individual values and beliefs. Of particular importance are leadership behavior, informal work practices, inter-group interactions, and organizational culture. INFORMATION TECHNOLOGY -
all technologies supporting business information development, storage,
processing, and distribution. The entire domain of hardware, software, data,
communications, systems development and related topics. INFRASTRUCTURE - (1) business definition: an activity category of the generic value
chain representing those activities which support the entire firm (i.e.,
general management, legal, accounting, etc.). See Firm Infrastructure. (2)
systems definition: a system category classification for those systems which
are useful in any part of the organization (for example: mainframe and
telecommunication utilities used by multiple applications and multiple
businesses). INITIAL PERCEIVED VALUE - is a measure of the customers' ability to appreciate the value of the
product or service before using it. This measure is important to the
marketing department in designing programs to fill the gap between actual
product value and perceived product value. (For scoring, use: Benefits are
Immediately Self-Evident (5); Benefits are Mostly Self-Evident (4); Benefits
are Somewhat Self-Evident (3); Benefits are Slightly Self-Evident (2); Only
After Using the Product Are the Benefits Recognized (1).) INSTITUTIONAL FACTORS - include government policies and regulations (at all levels of
government in any country). INTANGIBLE INTERRELATIONSHIPS - involve the transference of management know-how among separate value
chains (business units). Note: to realize intangible interrelationships,
business units usually have to have the same generic strategy. [Source: M.
Porter] INTEGRATION - defines the division of activities between a firm and its suppliers,
channels, and buyers. [Source: M. Porter] INTEREST RATE RISK - the risk of loss resulting from adverse movement of interest rates. INTERMITTENT OVERCAPACITY - is a condition that arises in industries where economies of scale
dictate that capacity must be added in large increments, and the capacity
additions cause an imbalance in the industry supply-demand equilibrium. The
industry may face recurring periods of over-capacity and price cutting.
[Source: M. Porter] INTERNAL ORGANIZATIONAL TRENDS - a list of expected trends within the business or corporate environment
that might affect the business. For example: organizational restructuring
and changing corporate culture patterns. INTERRELATIONSHIPS - are of three types: tangible interrelationships, intangible
interrelationships, and competitor interrelationships. [Source: M. Porter] INVESTOR COMMUNICATIONS - The fundamental purpose of investor communications is to provide information, within competitive limits, that enable security analysts and investors to make soundly based forecasts of a firm's value drivers and share price. Because an efficient market reflects available information, investor communications is most important when management believes that their share price is significantly undervalued because the market does not have relevant information to process (rather than because of a more optimistic set of projections). [Source: A. Rappaport] |
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