Ch2-1
Barriers to Entry
Switching Costs
Access to Distribution Channels Cost Disadvantages Independent of Scale Government Policy
Expected Retaliation
Ch2-3
Supplier industry is dominated by a few firms Suppliers products have few substitutes Buyer is not an important customer to supplier Suppliers product is an important input to buyers product
Powerful suppliers can squeeze industry profitability if firms are unable to recover cost increases
Ch2-4
Ch2-5
Staging advertising battles Increasing consumer warranties or service Making new product introductions
The 7-S framework of McKinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company. Together these factors determine the way in which a corporation operates.
Ch2-10
Strategy
Style
Shared Values
Skills
Systems
Staff
Shared Value
The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and what it believes in. Central beliefs and attitudes.
Ch2-12
Strategy
Plans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition, customers.
Ch2-13
Structure
The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc.
Ch2-14
System
The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems.
Ch2-15
Staff
Numbers and types of personnel within the organization.
Ch2-16
Style
Cultural style of the organization and how key managers behave in achieving the organizations goals. Management Styles.
Ch2-17
Skill
Distinctive capabilities of personnel or of the organization as a whole. Core Competences.
Ch2-18
Ch2-19
Two worlds
Red Ocean Compete in crowded markets Blue Ocean Create and capture new market space
Ch2-20
Blue Oceans all industries not in existence today (unknown market space)
Ch2-21
Ch2-22
Ch2-23
Ch2-24
Two worlds
Red Ocean Strategy
Compete in existing market space. Beat the competition. Exploit existing demand.
revenue impact
62%
38%
Profit Impact
39%
61%
Ch2-29
Value innovation:
Make the competition irrelevant Create a leap in value for both buyers and your company Open up new and uncontested market space
Ch2-31
Price
Set a price that attracts a mass of buyers
Cost
Set the structure based on a target
Ch2-32