ELE Ch.4

Fragmented Markets

markets in which no one competitor has a substantial share of the market and the means of competition vary widely within the same market space

5 Issues of External Analysis

- Substitutes -Elasticity of Demand: customers will pay any price = inelastic demand - Ease of Entry and Exit - Benchmarking - Industry Trends

4 Criteria for a Resource-Based Analysis

- valuable - rare - durable - relatively non-substitutable

8 Critical Steps of External Analysis

1. Define the industry 2. Define your customers 3. Research the Industry 4. Identify competitors 5. Research those competitors 6. Draw a set of competitive maps 7. Examine and develop insights about the industry 8. Understand your competitive advantage

2 Categories of Competitive Factors

Normal or Ordinary Unusual or Unique

NAICS

North American Industry Classification System

Benchmarking

Working with and learning from a company outside your industry that has a particular skill that is potentially critical to your operation

Competitive Map

an analytical tool used to organize information about direct competitors on all points of competition

Industry

companies within a specified geographic radius that will be in direct competition for the same customers and sales

Unusual or Unique Competitive Factors

provide a business and advantage cause its out of the ordinary

Normal or Ordinary Competitive Factors

standard practice for a competitor