EXTERNAL ENVIRONMENT ANALYSIS

(Competitive analysis)

Dosen : Drs. HA. ROMADLON, MM, CTP

 Fakultas Ekonomi dan Bisnis
School Economics and Business Competitive Forces

Seven Characteristic describe the most competitive companies :

1. Market share matters
2. Understand and remember precisely what business you are in ?
3. Whether its broke or not, fix it. Make it better not just product but
the whole company if necessary
4. Innovate or evaporate, particularly in technology-driven businesses
5. Acquisition is essential to growth
6. People make a difference
7. There is no substitute for quality and no greater threat than failing to
be cost competitive on a global basis.

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 Fakultas Ekonomi dan Bisnis
School Economics and Business
1. What are the major competitors
strength ?
2. What are the major competitors
weaknesses
3. What are the competitors
objective & strategies ?
4. How will the major competitors
most likely respond to current
economic, social, cultural,
demographic, environmental,
political, governmental, etc
5. How vulnerable are the major
competitor to our companys
strategies ?
Key Question about Competitors
6. How vulnerable are our alternative
strategies to success ful counterattack
by our major competitors ?
7. How are our product or service
positioned relative to major
competitors ?
8. To what extend are new firms
entering and old firms leaving this
industry ?
9. What key factor have resulted in our
present competitive position in this
industry ?
10.What is the nature of suppliers and
distributors relationship ?
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 Fakultas Ekonomi dan Bisnis
School Economics and Business Competitive Intelligence Programs

Competitive Intelligence (CI), as formally defined by the Society of Competitive

Intelligence Professional (SCIP), is a systematic and ethical process for gathering
and analyzing information about the competitions activities and general
businesses trend to further a businesss own goals

Three strong misperception about CI

1. Running an Intelligence program requires lot of people, computer and
other resources.
2. Collecting intelligence about competitors violate antitrust laws, business
intelligence equals espionage
3. Intelligence gathering is an unethical practices

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 Fakultas Ekonomi dan Bisnis
School Economics and Business Competitive Analysis : Porters Five Forces Model
Telkom University
5 Entry Barriers Rivalry
Industry Determinant
growth
Fixed (or storage) cost / value added
Economic of scales New Entrants Intermittent over capacity
Proprietary product Product differences
Brand Identity Brand Identity
Switching cost Switching Cost
Capital requirement
Threat of
Concentration and balance
Access to distribution New Entrants Informational complexity
Absolute cost advantage Diversity of competitors
Governmental policy Corporate Stakes
Expected Retaliation Exit Barriers
Industry
Competitors
Bargaining Power
Bargaining Power
Suppliers Buyers
Of Suppliers Of Buyers
Determinant of Suppliers Power Intensity of Bargaining Leverage
Rivalry Determinant of BuyersBayer
Price Sensitivity Power concent vs firm concent
Differentiation of inputs Price / Total purchase Buyer Volume
Switching Cost Product difference Buyer switching cost vs firm
Presence of substitute inputs Brand Identity switching cost
Supplier concentration Threat of Impact on quality perf Buyer information
Importance of volume to supplier Buyers profit
Substitutes Decision maker incentives
Ability to backward integrate
Cost relative to total purchase Substitute product
Impact of inputs on cost or differentiation
Threat of forward integration relative to threat of backward
integration by firms in the industry. Subtitutes

Relative price performance of substitute,

switching cost, Buyer propensity to substitute

5 Creating the great business leaders

 Fakultas Ekonomi dan Bisnis
School Economics and Business External Factors Evaluation (EFE)
Telkom University
EFE matrix allowed strategist to summarized and evaluate the external factors.
6
5 steps to make EFE
1. List key external factors as identified
2. Assign each factor a weight that range from 0 (not important) and 1.0 (very important)
3. Assigned rating between 1-4 to indicate how effectively the firms current strategies to
response
4. Multiply each factors weight by its rating to determine a weighted score
5. Sum the weighted score to determine the total weighted score of the organization

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Fakultas Ekonomi dan Bisnis
School Economics and Business EFE

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Fakultas Ekonomi dan Bisnis
School Economics and Business External Threat and Opportunity Profile

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 Fakultas Ekonomi dan Bisnis
School Economics and Business Competitive Profile Matrix (CPM)
Telkom University

The CPM identifies a firms major competitor and its particular strength and
weaknesses.

CPM include both external and internal factors the rating refer : 4 = major
strength, 3 = minor strength, 2 = minor weaknesses, 1 = major weaknesses

The critical success factors are broader

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 Fakultas Ekonomi dan Bisnis
School Economics and Business An Example CPM
Telkom University

10

Company 1 Company 2 Company 3

Critical Success Factors Weight
Rating Score Rating Score Rating Score
1. Advertising 0,20 1 0,20 4 0,80 3 0,60
2. Product Quality 0,10 4 0,40 3 0,30 2 0,20

3. Price Competitiveness 0,10 3 0,30 2 0,20 4 0,40

4. Management 0,10 4 0,40 3 0,30 3 0,30

5. Financial Position 0,15 4 0,60 2 0,30 3 0,45

6. Customer Loyalty 0,15 4 0,60 3 0,45 2 0,30

7. Market Share 0,20 4 0,80 1 0,20 2 0,40

1,00 3,30 2,55 2,65

Pelajari CPM yang lain di hal. 114

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Fakultas Ekonomi dan Bisnis
School Economics and Business Tugas-3

A. Sesuai dengan tugas kelompok anda masing masing.

1. Tentukan perusahaan tsb bergerak di industri apa ?
2. Berapa jumlah pemain di industri tersebut (domestik maupun internasional),
dan tentukan market position dari perusahaan anda (siapa leader dan siapa
follower)
B. Kalau anda harus membuat External Factor Evaluation (EFE) untuk
perusahaan sesuai tugas anda buatlah daftar Key Factor minimum 5
Opportunities dan 5 Threats dan menurut anda bagaimana pembobotannya.
C. Kalau anda harus membuat Competitive Profile Matrix (CPM) untuk
perusahaan sesuai tugas anda buatlah daftar Critical Success Factor minimum
10 factors, lakukan rating perusahaan anda, rating competitor yang ada
D. Tugas dibuat hari ini juga dikumpulkan paling lambat pkl 17.00 di Loker Dosen

11 Creating the great business leaders