UNIT-3: STRATEGIC ANALYSIS AND CHOICE

• Corporate level strategies

• Corporate restructuring
• Business level strategies Methods of perusing strategies
• Strategic alliances and joint ventures
• Mergers and acquisitions
• Strategic analysis and choice
• Tools and techniques of strategic analysis and choice;
Experience Curve Analysis, life cycle Analysis, Industry
Analysis ,Strategic group analysis Competitor analysis
 LEARNING OBJECTIVES
•Understand Meaning of Strategic analysis and Choice
•Understand the Process and benefit of Strategic analysis
•Know the Process of Strategic choice
•Identify the Factors affecting strategic choice
•Understand the Tools and techniques used for strategic
Analysis and Choice
•Aware about various types of strategy( Corporate
strategy , Business strategy and functional strategy)
 MEANING OF STRATEGIC ANALYSIS AND
CHOICE
• Strategic analysis and Choice seeks to determine alternative course of
action that could be best enable the firm to achieve its mission and
objective.
• SAC will give the answer of the following question:
• How effective has the existing strategy been?
• How effective will that strategy be in future
• What will be the effectiveness of selected alternative strategies
PROCESS OF STRATEGIC ANALYSIS
1. Industry Analysis
Industry structure
Identify the Key success factors
2. Business strategy analysis
Strategic goals
Business strategies
Internal capability and skills
Strategic performance
3.Strategic evaluation and Recommendation
BENEFITS OF STRATEGIC ANALYSIS

• Sustainability
• Funding
• Whole organizational approach
• Sound goal
• External focus
• Clear expectation
• Effectiveness
 STRATEGIC CHOICE

• Pearce and Robinson: Strategic choice is a decision which

determine the future strategy of the firm”

• Glueck and Jauch; “ strategic choice is a decision which

selects from among the alternatives grand strategies which
will best meet the enterprise objective
 STEPS IN STRATEGIC CHOICE

Objective
Factors

Focusing on Evaluating Considering Strategic

Strategic Strategic Decision Choice
Alternative Alternatives Factors
Subjective
Factors
FACTORS AFFECTING STRATEGIC CHOICE

• Societal, political, regulatory and citizenship consideration

• Competitive conditions and overall Industry Attractiveness
• Company’s market opportunities and External threats
• Personal ambitions, business philosophies and ethical beliefs of
manager
• Influenced shared value and company culture on strategy
ETOP( Environment
al Threat
,Opportunity Profile Industry Analysis

McKinsey’s 7S
Framework Strategic group
Strategic Analysis
Analysis
SWOT Analysis and Competitor
Analysis
choice
Balanced Experience curve
Scorecard & Market life
cycle model
 SWOT
Analysis
!

S W O T
DR. SARITAS ATPATHY
SWOT Analysis

Learning Objectives
What
WhatisisSWOT
SWOT Analysis?
Analysis?

Aim of SWOT Analysis

Who needs SWOT Analysis?

How to conduct SWOT Analysis?

Benefits & Pitfalls of SWOT Analysis

Brainstorming & Prioritization in SWOT Analysis

Tips & Exercise for SWOT Analysis

Example text
Go ahead and replace it with your
own text. This is an example text.

Your own footer Your Logo

 What is SWOT Analysis?

Acronym for Strengths,

Strengths Weaknesses, Opportunities, and
Threats.
Technique is credited to Stanford
University in the 1960s and
1970s.

Planning tool used to understand

Oppurtunity
SWOT Weakness
Strengths, Weaknesses,
Opportunities, & Threats
involved in a project / business.
Analysis Used as framework for
organizing and using data and
information gained from
situation analysis of internal and
external environment.
Technique that enables a group /
Threats individual to move from everyday
problems / traditional strategies
to a fresh perspective.
What is SWOT Analysis?

STRENGTHS

Characteristics of the business or a team

that give it an advantage over others in the
industry.
Positive tangible and intangible
attributes, internal to an organization.

Beneficial aspects of the organization

or the capabilities of an organization,
which includes human competencies,
process capabilities, financial
resources, products and services,
customer goodwill and brand loyalty.

Examples - Abundant financial resources,

Well-known brand name, Economies of
scale, Lower costs [raw materials or
processes], Superior management talent,
Better marketing skills, Good distribution
skills, Committed employees.
What is SWOT Analysis?

OPPORTUNITIES
Chances to make greater profits in the
environment - External attractive factors
that represent the reason for an
organization to exist & develop.
Arise when an organization can take
benefit of conditions in its
environment to plan and execute
strategies that enable it to become
more profitable.
Organization should be careful and
recognize the opportunities and grasp
them whenever they arise.
Opportunities may arise from market,
competition, industry/government and
technology.
Examples - Rapid market growth, Rival
firms are complacent, Changing customer
needs/tastes, New uses for product
discovered, Economic boom, Government
deregulation, Sales decline for a
substitute product .
What is SWOT Analysis?

WEAKNESSES

Characteristics that place the firm at a

disadvantage relative to others.

Detract the organization from its

ability to attain the core goal and
influence its growth.
Weaknesses are the factors which do
not meet the standards we feel they
should meet. However, weaknesses
are controllable. They must be
minimized and eliminated.

Examples - Limited financial resources,

Weak spending on R & D, Very narrow
product line, Limited distribution, Higher
costs, Out-of-date products / technology,
Weak market image, Poor marketing skills,
Limited management skills, Under-trained
employees.
 What
SWOT is SWOT
ANALYSIS Analysis?
- THREAT

THREATS

External elements in the environment that

could cause trouble for the business -
External factors, beyond an organization’s
control, which could place the
!
organization’s mission or operation at risk.
Arise when conditions in external
environment jeopardize the reliability
and profitability of the organization’s
business.
Compound the vulnerability when they
relate to the weaknesses. Threats are
uncontrollable. When a threat comes, the

!
stability and survival can be at stake.
Examples - Entry of foreign competitors,
Introduction of new substitute products,
Product life cycle in decline, Changing
customer needs/tastes, Rival firms adopt
new strategies, Increased government
regulation, Economic downturn.
Aim of SWOT Analysis?
HARMFUL
HELPFUL
To help decision makers share
and compare ideas.

To bring a clearer common

purpose and understanding of
factors for success.

S W To organize the important factors

linked to success and failure in the
business world.

To analyze issues that have led to

failure in the past.

O T To provide linearity to the decision

making process allowing complex ideas
to be presented systematically.
Who needs SWOT Analysis?

• When the team has not met its

targets
2 • Customer service can be better
• Launching a new business unit to

pursue a new business

• New team leader is appointed

Business Unit

Management Company
• When supervisor has issues with
work output • When revenue, cost & expense
• Assigned to a new job targets are not being achieved
1 • New financial year – fresh targets 3 • Market share is declining
• Job holder seeks to improve • Industry conditions are
performance on the job unfavorable
• Launching a new business venture
 Who needs SWOT Analysis?
SWOT Analysis is also
required for / during...
Effectiveness in Market
Product Launch

Decision Making

Personal Development Planning

Competitor Evaluation

Product Evaluation
Strategic Planning
Brainstorming Meetings

Goods & Services Evaluation

 How to conduct SWOT Analysis?

1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans

External Environment & Document
How to conduct SWOT Analysis?
1. Analyse Internal & External Environment
How to conduct SWOT Analysis?
 How to conduct SWOT Analysis?

7
2. Perform SWOT Analysis & Document
Carry your findings forward - Make sure that the

6
SWOT analysis is used in subsequent planning. Revisit
your findings at suitable time intervals.

5
Evaluate listed ideas against Objectives
- With the lists compiled, sort and group
facts and ideas in relation to the

4
objectives.
List Strengths,
Weaknesses,

3
Create a workshop environment - Opportunities, & threats
Encourage an atmosphere conducive
to the free flow of information.

Select contributors -
Expert opinion may be
2 Allocate research & information gathering
tasks - Background preparation can be carried out
in two stages – Exploratory and Detailed.

1
required for SWOT
Information on Strengths & Weaknesses should
focus on the internal factors & information on
Opportunities & Threats should focus on the
MR. SHERPINSKY'S HONORS MARKETING CLASS. 2015 ALL RIGHTS RESERVED. external factors.
Establish the objectives - Purpose of
conducting a SWOT may be wide / narrow,
general / specific.
How to conduct SWOT Analysis?
3. Prepare Action Plan

Once the SWOT analysis has been completed, mark each point with:

Things that MUST be addressed immediately

Things that can be handled now

Things that should be researched further

Things that should be planned for the future

 Benefits & Pitfalls of SWOT Analysis

Benefits of SWOT Analysis

Benefits of
SWOT
Analysis

Knowing the Competion Forecasting

Reviews a company's competitors Provides a variety of information
& benchmarks against them to critical to forecasted variables.
configure strategies that will put the Threats, for e.g., can impact a
company in a competitive Decision Making Tool business's forecast. By
advantage. understanding the company's
Provides well-rounded
advantages & disadvantages,
information that prompt
forecasts will be more accurate.
well-informed decisions.
Benefits & Pitfalls of SWOT Analysis
Benefits of SWOT Analysis

Besides the broad benefits, here are few more benefits of conducting SWOT Analysis:

Helps in setting of objectives for strategic planning

Provides a framework for identifying & analyzing strengths, weaknesses,

opportunities & threats

Provides an impetus to analyze a situation & develop suitable strategies

and tactics

Basis for assessing core capabilities & competencies

Evidence for, and cultural key to, change

Provides a stimulus to participation in a group experience

Benefits & Pitfalls of SWOT Analysis
Pitfalls of SWOT Analysis

Can be very subjective. Two people rarely come up with the same final
version of a SWOT. Use it as a guide and not as a prescription.

May cause organizations to view circumstances as very simple due to

which certain key strategic contact may be overlooked.

Categorizing aspects as strengths, weaknesses, opportunities & threats

might be very subjective as there is great degree of uncertainty in market.

To be effective, SWOT needs to be conducted regularly. The pace of

change makes it difficult to anticipate developments.

The data used in the analysis may be based on assumptions that

subsequently prove to be unfounded [good and bad].

It lacks detailed structure, so key elements may get missed.

Brainstorming & Prioritization in SWOT Analysis

Brainstorming Prioritization

Output from Brainstorming exercise is Prioritized

Begin brainstorming by asking the At the end of the Brainstorming exercise:

following questions: • Reduce the list of strengths & weaknesses to no
• What opportunities exist in our more than five distinctive competencies and
external environment? debilitating weaknesses
• What threats to the institution exist in • Strengths that are distinctive competencies
our external environment? • Weaknesses that are debilitating
• What are the strengths of our • Reduce threats and opportunities to the five most
institution? critically important of each.
• What are the weaknesses of our
institution?
 Tips & Exercise

Do’s Don’ts
 Be analytical and specific. х Try to disguise weaknesses.
 Record all thoughts and ideas.
х Merely list errors and mistakes.
 Be selective in the final evaluation.
х Lose sight of external influences and trends.
 Choose the right people for the exercise.
х Allow the SWOT to become a blame-laying
 Choose a suitable SWOT leader or facilitator.
 Think out of the box
 Be open to change exercise.
х Ignore the outcomes at later stages of the
planning process.
Tips & Exercise

Introduce the SWOT

method and its
purpose in your Be willing to
When conducting organization to gain breakaway from
a SWOT analysis, acceptance. traditional methods.
designate a leader
or group
facilitator.

Discuss and record the

results. Prepare a
While doing a written summary of the
SWOT analysis SWOT analysis to give
for your job, to participants.
invite someone to
brainstorm with
you.
EXAMPLE….
 SWOT ANALYSIS OF SAMSUNG
(STRENGTH-WEAKNESS-
OPPORTUNITY-THREAT)
Strengths Weaknesses
Hardware integration with many open Patent infringement
source (OS) and software Too low profit margin
Excellence in engineering and Main competitors are also largest
producing hardware parts and consumer buyers
electronics Lack its own OS and software
Innovation and design Focus on too many products
Focus on environment
Low production costs
Largest share in mobile phones and 2nd
place in smart phones sales
Ability to market the brand
Opportunities Threats

Growing India’s smart phone Saturated smart phone markets in

market developed countries
Growing mobile advertising Rapid technological change
industry Declining margins on hardware
Growing demand for quality production
application processors Breached patents
Growth of tablets market Apple’s iTV launch
Obtaining patents through Price wars
acquisitions
Tips & Exercise

EXERCISE

Assume that a car manufacturing company has recently launched its products.
Perform a SWOT analysis for the same.
Tips & Exercise

EXERCISE
Helpful

STRENGTHS WEAKNESSES
• No Competition in the EV • High Price
Segment. • Low aesthetic appeal

Internal
• Environment friendly • Small driving range [up to
• Economic to Drive [Rs. 0.4 80 KM]
per km] * • Competition from gasoline
• Government subsidies [8%
vehicles
excise duty] *
OPPORTUNITIES THREATS

• Huge untapped EV market • Government incentives

External

• Growing demand of green to gasoline vehicles

• Entry of competitors
technologies • Stringent safety
• Rising fuel costs requirements anticipated
• Growing road congestion • Availability of hybrid vehicles
in urban cities

* Hypothetical figures Harmful

Tips & Exercise

EXAMPLE

Mc Donald’s SWOT Analysis

 Tips & Exercise
Mc Donald’s
SWOT Analysis INTERNAL

STRENGTHS WEAKNESSES

• Ranks very high on the Fortune Magazine's most • Failing pizza test market thus limiting the
admired list ability to compete with pizza providers.
• Community oriented • High training costs due to high turnover.
• Global operations all over the world • Minimal concentration on organic foods.
• Cultural diversity in the foods • Not much variation in seasonal products .
• Excellent location • Quality concerns due to franchised operations.
• Assembly line operations. • Focus on burgers / fried foods not on healthier
• Use of top quality products options for their customers.

THREATS
OPPORTUNITIES

• Opening more joint ventures. • Marketing strategies that entice people from
• Being more responsive to healthier options. small children to adults.
• Advertising wifi services in the branches. • Lawsuits for offering unhealthy foods.
• Expanding on the advertising on being • Contamination risks that include the threat of
more socially responsible e-coli containments.
• Expansions of business into newly developed • The vast amount of fast food restaurants that
.
parts of the world.
• Open products up to are open as competition.
allergen free options • Focus on healthier dieting by consumers.
such as peanut free. • Down turn in economy affecting the ability to eat
EXTERNAL
that much.
Tips & Exercise

Points to Ponder

• Keep your SWOT short and simple, but remember to include important details. For
example, if you think your communication skills is your strength, include specific details,
such as verbal / written communication.

• When you finish your SWOT analysis, prioritize the results by listing them in order of
the
most significant factors that affect you / your business to the least.

• Get multiple perspectives on you / your business for your SWOT analysis. Ask for input
from your employees, colleagues, friends, suppliers, customers and partners.

• Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve
or
a problem you need to solve. You can then conduct separate SWOT analyses on individual
issues and combine them.
INDUSTRY ANALYSIS
Industry analysis enables small business owners to identify the
threats and opportunities facing their businesses, and to focus
their resources on developing unique capabilities that could lead
to a competitive advantage
Industry analysis is a tool that facilitates a company's
understanding of its position relative to other companies that
produce similar products or services.
 IMPORTANCE OF INDUSTRY ANALYSIS
1.Industry related factors have more direct impact
2.Reveals industry attractiveness and its prospects for growth
3.Helps the firm to identify such aspects as
size, product offerings, sales volumes, performance, competitive
forces etc.,
4.Focus on competitors
5.To determine key success factors
6.To have a thorough understanding of industry
FACTORS ANALYZED IN INDUSTRY ANALYSIS

•Industry Features
•Industry Boundaries
•Industry Environment
•Industry Structure
•Industry Performance
•Industry Practices
•Industry Attractiveness
•Industry Prospects for future
 FACTORS ANALYZED IN INDUSTRY
ANALYSIS

• Industry Features
Overall size, Product category /sub categories, their relative volume
and performance in current industries in recent years, pace of
technological change, product innovation etc.
Industry Boundaries
Breadth of market, product/service quality, geographic distribution,
level of integration
• Industry Environment
a) Fragmented Industries
Large number of small or medium companies
b) Consolidated Industries
Small number of large companies
• Industry Structure
• It refers to the economic and technical forces of an industry which determine the strength
of competitiveness in the industry. It includes. No. of players, relative shares of the each
player, nature of competition, differentiation practiced by each player, cost structure of the
players Concentration, Economies of scale, Product differentiation, Barriers to entry
• Industry Performance
Production, sales, profitability, technological advancement
• Industry Practices
Product policy, pricing policy, promotion policy, distribution policy, R&D policy,
competitive tactics and legal tactic
• Industry Attractiveness
Profit potential, Growth prospects, profitability, forces shaping Competition,
innovation in industries and future pattern of Industry barriers
• Industry Future prospects
Innovation in Products, trends in consumer preferences, Emerging changes in
regulatory mechanisms, product life cycle of the industry, rate of growth
MICHEAL PORTER’S FIVE
FORCE MODEL
THREAT OF NEW ENTRANTS - BARRIERS
TO ENTRY

• Economies of scale
• Capital requirements
• Access of inputs
• Switching costs
• Government policy
• Access to distribution channels
• Absolute cost advantages
• Patent and proprietary knowledge restrict entry
• Expected retaliation
• Brand Identity
 RIVALRY AMONG EXISTING
FIRMS
• Numerous competitors or equally powerful competitors
• Slow market or industry growth
• High fixed but low marginal costs
• High exit barriers
• Large number of firms
• Low product differentiation
• Strategic stakes are high
• High storage cost or highly perishable product
 BARGAINING POWER OF BUYERS
• There are few buyers in number
• Buyers place large order
• Buyers information availability
• Availability of supplier at low price
• The products are standard or undifferentiated
• The buyer faces low switching costs
• The buyer earns low profits
• Price sensitivity nature of buyer
 BARGAINING POWER OF SELLERS
OR SUPPLIERS

• Few suppliers
• Product is differentiated or low competition
• Lack of substitutes
• Importance of volume to supplier
• Buyer is an important customer
• Product crucial to the customer
• Switching cost
• Threat of forward integration
THREAT OF SUBSTITUTE

• Price-performance comparison
• Buyer’s switching costs 
• Purchase factors for consumers
• High Product differentiation unique value
• Availability of number of substitute products
 COMPETITOR ANALYSIS

A competitive analysis is a strategy where you identify major

competitors and research their products, sales, and marketing
strategies..
Competitor analysis is a driver of an organization’s strategy
and effects on how firms act or react in their sectors.
 OBJECTIVE OF COMPETITOR
ANALYSIS
•To study the market
•To predict and forecast organization’s demand and supply
•To formulate strategy
•To increase the market share
•To study the market trend and pattern
•To develop strategy for organizational growth
•When the organization is planning for the diversification and expansion plan
•To study forthcoming trends in the industry
•Understanding the current strategy strengths and weaknesses of a competitor
•Insight into future competitor strategies may help in predicting upcoming threats and
opportunities.
 DIMENSION OF COMPETITIVE ANALYSIS

Market commonality: it is refers as the degree of presence that a

competitor manifests in the markets it overlaps with the focal firm
Resource commonality: it is refers as the extent to which a given
competitor posses strategic endowment comparable in term of
both type and amount, to those of focal firm.
 STRATEGY FRAMEWORK TO
ANALYSE COMPETITION

• Competitor’s Objective
• Competitor’s Assumption
• Competitor’s Resources
• Competitor’s Strategy
STEPS IN COMPETITIVE ANALYSIS

Step-1:Define Competitors
Step-2; Analysis of competitors strengths and weaknesses
Step-3; Analysis of internal strengths and weaknesses
Step-4: Analyse customer’s need and wants
Step-5: Studying impediments to market for us and our
competition
Step-6: building strategic plan to improve market place
position
EXPERIENCE CURVE ANALYSIS
• The concept of experience curve was first introduced by 
Boston Consulting Group (BCG) in the 1960s while analyzing cost behavior in
companies. Bruce Henderson, the group’s founder, led a study into a leading
manufacturer of semiconductors to analyze the relationship between cost behavior and
production quantity .The research found that when the manufacturer doubled the
volume of production, there was a 25% decline in the overall cost of manufacturing.
• Boston Consulting Group defined the relationship as “experience curve,” where a
company gains more experience by producing more of a particular product. Additional
research conducted by BCG in the late 1960s and early 1970s revealed that the
experience curve effect for various industries ranged between 10% and 25%.
 THE
THE EXPERIENCE
EXPERIENCE CURVE
CURVE

The “Law of Experience”

1992 The unit cost value added to a standard product
declines by a constant % (typically 20-30%) each
time cumulative output doubles.
1994
Cost per
unit of
output (in 1996
real $)
1998
2000
2002 2004

Cumulative Output
 EXAMPLES
EXAMPLES OF
OF EXPERIENCE
EXPERIENCE CURVES
CURVES

Japanese clocks & watches, 1962-72 UK refrigerators, 1957-71

50 100 200 300

20K 30K
1960 Yen

Price Index
75%
15K

70% slope

100K 200K 500K 1,000K 5 10

50
Accumulated unit production Accumulated units
(millions) (millions)
DRIVERS
DRIVERS OF
OF COST
COST ADVANTAGE
ADVANTAGE

• Indivisibli\ties
ECONOMIES OF SCALE
• Specialization and division of labor

• Increased dexterity
ECONOMIES OF LEARNING
• Improved organizational routines

• Process innovation
PRODUCTION TECHNIQUES • Reengineering business processes

• Standardizing designs & components

PRODUCT DESIGN
• Design for manufacture

• Location advantages
INPUT COSTS • Ownership of low-cost inputs
• Non-union labor
• Bargaining power

CAPACITY UTILIZATION • Ratio of fixed to variable costs

• Speed of capacity adjustment

• Organizational slack; Motivation &

RESIDUAL EFFICIENCY
culture; Managerial efficiency
LIFE CYCLE ANALYSIS
STARTUP STAGE
• At the startup stage, customer demand is limited due to unfamiliarity
with the new product’s features and performance. Distribution
channels are still underdeveloped. There is also a lack of
complementary products that add value for the customers, limiting
the profitability of the new product.
• Companies at the startup stage are likely to generate zero or very low
revenue and experience negative cash flows and profits, due to the
large amount of capital initially invested in technology, equipment,
and other fixed costs.
 GROWTH STAGE

• As the product slowly attracts attention from a bigger market segment, the industry
moves on to the growth stage where profitability starts to rise. Improvement in product
features increases the value to customers. Complementary products also start to
become available in the market, so people have greater benefits from purchasing the
product and its complements. As demand increases, product price goes down, which
further increases customer demand.
• At the growth stage, revenue continues to rise and companies start generating positive
cash flows and profits as product revenue and costs surpass break-even.
 SHAKEOUT STAGE

• Shakeout usually refers to the consolidation of an industry. Some businesses are

naturally eliminated because they are unable to grow along with the industry or
are still generating negative cash flows. Some companies merge with
competitors or are acquired by those who were able to obtain bigger market
shares at the growth stage.
• At the shakeout stage, the growth rate of revenue, cash flows, and profit start
slowing down as the industry approaches maturity.
 MATURITY STAGE

• At the maturity stage, the majority of the companies in the industry are well-established and
the industry reaches its saturation point. These companies collectively attempt to moderate
the intensity of industry competition to protect themselves, and to maintain profitability by
adopting strategies to deter the entry of new competitors into the industry. They also develop
strategies to become a dominant player and reduce rivalry.
• At this stage, companies realize maximum revenue, profits, and cash flows because customer
demand is fairly high and consistent. Products become more commonplace and popular
among the general public, and the prices are fairly reasonable, as compared to new products.
• 
 DECLINE STAGE

• The decline stage is the last stage of an industry life cycle. The intensity of
competition in a declining industry depends on several factors: speed of
decline, the height of exit barriers, and the level of fixed costs. To deal with
the decline, some companies might choose to focus on their most profitable
product lines or services in order to maximize profits and stay in the
industry. Some larger companies will attempt to acquire smaller or failing
competitors to become the dominant player. For those who are facing huge
losses and that do not believe there are opportunities to survive, divestment
will be their optimal choice.
THE TRADITIONAL MODEL OF INDUSTRY
LIFE CYCLE

Fermentation Shakeout Maturity Decline

Sales volume

Time
 EVOLUTION
EVOLUTIONOF
OFINDUSTRY
INDUSTRYSTRUCTURE
STRUCTUREOVER
OVERTHE
THELIFE
LIFECYCLE
CYCLE

INTRODUCTION GROWTH MATURITY DECLINE

DEMAND Affluent buyers Increasing Mass market Knowledgeable,
penetration replacement customers, resi-
demand dual segments

TECHNOLOGY Rapid product Product and Incremental Well-diffused

innovation process innovation innovation technology

PRODUCTS Wide variety, Standardization Commoditiz- Continued rapid

design change ation commoditization

MANUFACT- Short-runs, skill Capacity shortage, Deskilling Overcapacity

URING intensive mass-production

TRADE -----Production shifts from advanced to developing countries-----

COMPETITION Technology- Entry & exit Shakeout & Price wars,

consolidation exit

KSFs Product innovation Process techno- Cost efficiency Overhead red-

logy. Design for uction, ration- alization, low
cost sourcing