IntraIndustry Analysis

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Intra-Industry Analysis
OUTLINE

• Segmentation
• Strategic Groups
• Competitor Analysis

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Segmentation Analysis The Principal Stages

• Identify key variables
• and categories.
• Construct a segmentation matrix
• Analyze segment attractiveness
• Identify KSFs in each segment
• Analyze benefits of
• broad vs. narrow scope.

Identify segmentation variables Reduce to 2 or 3
variables Identify discrete categories for each
variable
Potential for economies of scope across
segments Similarity of KSFs Product
differentiation benefits of segment focus
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The Basis for Segmentation Customer and Product
Characteristics
Size Technical sophistication OEM/replacemen
t
Industrial buyers
Characteristics of the Buyers
Demographics Lifestyle Purchase occasion
Household buyers
Size Distributor/broker Exclusive/
nonexclusive General/special list
Distribution channel
Opportunities for Differentiation
Geographical location
Physical size Price level Product
features Technology design Inputs used (e.g.
raw materials) Performance characteristics Pre-s
ales post-sales services
Characteristics of the Product
4
Segmenting the European Metal Can Industry
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Segmenting the World Automobile Market
REGION US Canada W.Europe
E.Europe Asia Lat America Australia
Africa Luxury Cars Full-size sedans Mid-size
sedans Small sedans Station wagons Passenger
minivans Sports cars Sport-utility Pick-up
trucks
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Segmentation and Key Success Factors in the U.S.
Bicycle Industry
SEGMENT
KEY SUCCESS FACTORS
Low-costs through global sourcing of components
low-wage assembly. Supply contract with
major retailer. Leading competitors Taiwanese
Chinese assemblers, some U.S manufacturers, e.g.
Murray Ohio, Huffy
Low price bicycles sold primarily through
department and discount stores, mainly under the
retailers own brand (e.g. Sears Free Spirit)
Cost effieciency through large scale operation
and either low wages or automated
manufacturing. Reputation for quality
(durability, reliability) through effective
marketing to dealers and/or consumers.
International marketing distribution. Leading
competitors Raleigh, Giant, Peugeot, Fuji
(Japan).
Medium-priced bicycles sold primarily under
manufacturers brand name and distributed mainly
through specialist bicycles stores
Quality of components and assembly, Innovation
in design (e.g. minimizing weight and wind
resistence). Reputation (e.g. through success in
racing, through effective brand
management). Strong dealer relations.
High-priced bicycles for enthusiasts.
Childrens bicycles (and tricycles)
sold primarily through toy retailers (discount
toy stores, department stores, and specialist
toy stores).
Similar to low-price bicycle segment.
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Strategic Group Analysis

• A strategic group is a group of firms in an
  industry following the same or similar strategy.
  

• Identifying strategic groups
• Identify principal strategic
• variables which distinguish
• firms.
• Position each firm in relation
• to these variables.
• Identify clusters.

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Strategic Groups in the World Automobile Industry
Broad
GLOBAL, BROAD-LINE PRODUCERS e.g., GM, Ford,
Toyota, Nissan, Honda, VW
REGIONALLY FOCUSED BROAD-LINE PRODUCERS e.g.
Fiat, PSA, Renault, Rover, Chrysler
GLOBAL SUPPLIERS OF NARROW MODEL RANGE e.g.,
Volvo, Subaru, Isuzu, Suzuki, Saab, Hyundai
NATIONALLY FOCUSED, INTERMEDIATE LINE PRODUCERS
e.g. Tofas, Kia, VAZ, Maruti
PRODUCT RANGE
LUXURY CAR MANUFACTURERS e.g., Jaguar, Rolls
Royce, Daimler-Benz, BMW
NATIONALLY- FOCUSED, SMALL, SPECIALIST PRODUCERS
e.g., Bristol (U.K.), Classic Roadsters (U.S.),
Morgan (U.K.)
PERFORMANCE CAR PRODUCERS e.g., Porsche,
Maserati, Lotus
Narrow
National
GEOGRAPHICAL SCOPE
Global
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Strategic Groups Within the World Petroleum
Industry
Statoil
INTEGRATED DOMESTIC OIL COMPANIES
PRODUCTION COMPANIES
INTEGRATED INTERNATIONAL MAJORS
DIVERSIFIED MAJORS
PDVSA
Kuwait
0 0.5 1.0 1.5 2.0
Exxon
Vertical Balance
Shell
Amoco
BP
Chevron
Unocal
Arco
Total
Mobil
Texaco
Phillips
Indian Oil
Petrobras
ENI
ENI
Elf
Elf
INTERNATIONAL DOWNSTREAM OIL COMPANIES
Repsol
Neste
Petrofina
Nippon
Sun
0 10 20 30 40 50 60 70 80
NATIONALLY-FOCUSED DOWNSTREAM COMPANIES
Geographical Scope
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A Framework for Competitor Analysis

• OBJECTIVES
• What are competitors current
• goals?
• Is performance meeting there goals?
• How are its goals likely to change?
• STRATEGY
• How is the firm competing?
• ASSUMPTIONS
• What assumptions does the competitor
• hold about the industry and itself?
• RESOURCES CAPABILITIES
• What are the competitors key
• strengths and weaknesses?

• PREDICTIONS
• What strategy changes
• will the competitor
• initiate?
• How will the competitor
• respond to our strategic
• initiatives?