Five Force Competitive Landscapes
Five Force Competitive Landscapes
The purpose of your strategy report is to explain whether your company has a coherent strategy that will allow it to gain market share with millennial consumers and identify the tactics it is using to carry out that strategy. You should break this task into three parts:
Identify the one or two most important forces shaping your company’s competitive landscape
Focus here on the landscape not the company. You want to eliminate forces that are not important and zero in on the one or two forces that determine the shape of the landscape going forward:
Competitive rivalry: Is competition fragmented or dominated by one or two players?
Supplier power: Must companies bargain with a few essential suppliers?
Consumer power: Do consumers have bargaining power with many options?
Threat of new entrants: Can similar services/products easily enter the market?
Threat of substitute products: Is it likely that new, disruptive variations will emerge?
Describe your company’s strategy
Remember that strategy is not the same as tactics. Strategy is a question of how a company positions itself on a landscape to take advantage of the predominant forces. Tactics are the specific things a company is doing to carry out its strategy. Only list key tactics after you have described the strategy; don’t get lost in micro-details.
Evaluate how effective that strategy will be in gaining millennial market share
This part of your report involves a judgment call. I am not going to grade you on whether I agree with your call but rather on how well you state and explain it. Although predicting some future outcome is difficult (e.g. whether strategy x executed by company z can gain millennial market share), a good analyst should be able to explain the framework for making such judgments. Be decisive and explain any qualifications or conditions that apply.
You can use the basic stockbroker framework for making recommendations: buy, hold, or sell (though don’t literally use those terms). In a strategy report, you generally recommend one of three options:
Go for it
The company’s strategy is sound. Clients should partner with this company and/or adopt its market “solution.”
Wait and hedge
Some part of the strategy needs adjusting or market conditions need to evolve further before clients should partner or adopt. For this option, you need to state clearly which forces or which parts of the strategy clients should monitor to decide whether to partner or adopt.
Forget about it
There is no reason to believe this company can gain market share. Do not partner; do not adopt their solution.
Mobile
Landscape
Threat of New Entrants
needcarrier partnerships and extensive 3rd party development of apps
Supplier Power
control hardware materials and manufacturing capacity
Competitive Rivalry
iOS vs Android
Consumer Power
many choices for carriers and hardware; increasing switching costs for OS and apps
Threat of Substitute Products
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