That“Made in USA” label may be worth more than you think
Ask most Americans if they prefer products made by American workers, and they readily say, “Of course! ” But do they put their money where their mouth is?
The common assumption is that, when given the choice of saving a few dollars by buying a toy , a pair of sneakers, or a cell phone made in China versus purchasing a more expensive product that says“Made in USA, ” the vast majority of Americans go for the bargain. It may be time to rethink that assumption.
How to Analyze a Case Study
Case studies are used in many professional education programs, primarily in business school, to present real-world situations to students and to assess their ability to parse out the important aspects of a given dilemma. In general, a case study should include, in order: background on the business environment, description of the given business, identification of a key problem or issue, steps taken to address the issue, your assessment of that response, and suggestions for better business strategy.
The steps below will guide you through the process of analyzing a business case study in this way.
The Five Competitive Forces That Shape Strategy
In essence, the job of the strategist is to understand and cope with competition. Often, however, managers define competition too narrowly, as if it occurred only among today’s direct competitors. Yet competition for profits goes beyond established industry rivals to include four other competitive forces as well: customers, suppliers, potential entrants, and substitute products. The extended rivalry that results from all five forces defines an industry’s structure and shapes the nature of competitive interaction within an industry.
As different from one another as industries might appear on the surface, the underlying drivers of profitability are the same. The global auto industry, for instance, appears to have nothing in common with the worldwide market for art masterpieces or the heavily regulated health-care delivery industry in Europe. But to understand industry competition and profitability in each of those three cases, one must analyze the industry’s underlying structure in terms of the five forces. (See the exhibit “The Five Forces That Shape Industry Competition.”)
Threat of entry
New entrants to an industry bring new capacity and a desire to gain market share that puts pressure on prices, costs, and the rate of investment necessary to compete. Particularly when new entrants are diversifying from other markets, they can leverage existing capabilities and cash flows to shake up competition, as Pepsi did when it entered the bottled water industry, Microsoft did when it began to offer internet browsers, and Apple did when it entered the music distribution business.
The power of suppliers
Powerful suppliers capture more of the value for themselves by charging higher prices, limiting quality or services, or shifting costs to industry participants. Powerful suppliers, including suppliers of labor, can squeeze profitability out of an industry that is unable to pass on cost increases in its own prices. Microsoft, for instance, has contributed to the erosion of profitability among personal computer makers by raising prices on operating systems. PC makers, competing fiercely for customers who can easily switch among them, have limited freedom to raise their prices accordingly.
The power of buyers
Powerful customers the flip side of powerful suppliers can capture more value by forcing down prices, demanding better quality or more service (thereby driving up costs), and generally playing industry participants off against one another, all at the expense of industry profitability. Buyers are powerful if they have negotiating leverage relative to industry participants, especially if they are price sensitive, using their clout primarily to pressure price reductions.
The threat of substitutes
A substitute performs the same or a similar function as an industry’s product by a different means. Video-conferencing is a substitute for travel. Plastic is a substitute for aluminum. E-mail is a substitute for express mail. Sometimes, the threat of substitution is downstream or indirect, when a substitute replaces a buyer industry’s product. For example, lawn-care products and services are threatened when multifamily homes in urban areas substitute for single-family homes in the suburbs. Software sold to agents is threatened when airline and travel websites substitute for travel agents.
Rivalry among existing competitors
Rivalry among existing competitors takes many familiar forms, including price discounting, new product introductions, advertising campaigns, and service improvements. High rivalry limits the profitability of an industry. The degree to which rivalry drives down an industry’s profit potential depends, first, on the intensity with which companies compete and, second, on the basis on which they compete.
PEST Analysis
A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:
The acronym PEST (or sometimes rearranged as "STEP") is used to describe a framework for the analysis of these macro environmental factors.
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Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:
| Economic Factors Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macro economy:
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Social Factors Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer needs and the size of potential markets. Some social factors include:
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Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include:
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SWOT Analysis
A SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture or in any other situation requiring a decision. It involves monitoring the marketing environment internal and external to the company. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from the Fortune 500 companies.
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Strengths A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage Examples of such strengths include:
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Weaknesses The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses:
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Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:
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Threats Changes in the external environmental also may present threats to the firm. Some examples of such threats include:
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Case Study Report Format Guideline
Following is a suggested guideline for preparing your case study reports (Harvard Business Style):
Vision is vital to setting the future direction of the organization and the goals and strategies necessary to achieve it.
Once an organization has a clear vision, it can now dissect the vision to determine its component parts.
The diagram below shows the links between the Values, Vision, Mission, Strategic Objectives and Actions.
Vision and Strategy
Values: who we are, what we stand for
Vision: where we are going in the long-term
Mission: our purpose and reason for existing
Strategy: a comprehensive plan with clear and concise goals detailing how to achieve the vision, with indicators and supporting strategies
Actions: clearly defined, specific and sequential tasks and tactics designed to implement an organizations strategy.
No strategy can be better than its tactical execution.
No vision means no strategy, no strategy means no coherent tactics, no tactics means:
It’s worth remembering that by increasing the involvement of members of your organisation in the development of your vision and strategy, you are improving their understanding and the liklihood that they will execute tactics correctly.
Strategy into Action
The next step is to examine each strategic objective to determine the necessary:
oTest your Vision
Once your vision statement is finalized, you should make arrangements to regularly review and challenge it as part of your overall strategy review process to ensure it remains relevant.
Mercedes Benz has struggled in recent years in its battle with other Germany luxury carmakers — with BMW and Audi both passing the fabled brand. In “A Mini Mercedes with Big Ambitions” (BusinessWeek, September 22, 2011), you can read about a new Mercedes Benz the B-Class. This smaller and more affordable Mercedes targets a “younger, hipper clientele” than the traditional Mercedes target market.
The move is an example of expanding a product line downmarket — which has implications for Mercedes positioning and brand equity. What do you think about Mercedes risk to its classic positioning? What could Mercedes have done — or could they still do — to minimize such concerns? What other promotion ideas do you have to help Mercedes as it aims at a new target market?
وبلاگی برای تبادل اطلاعات دانشجویان کلاس مدیریت استراتژیک و مدیریت استراتژیک بازاریابی