ENVIRONMENTAL CONSIDERATIONS
- which businesses tend to have parent's the largest impact on the overall portfolio relative to stability. cash flow. sales earnings. growth. and so on?
Knowledge provided by analyzing the above issues can help a firm locate positions in the market where it can meet its objectives without threatening competitors and perhaps touching of bitter warfare. if such a position is not available. the firm is still in a better position to develop strategies it can defend against existing and potential competitors.
Assumptions Gaining an understanding of a competitor's assumptions about itself and other firms in the industry can be quite beneficial to a firm. When these assumptions are not accurate. they can create"blind spots" that make the competitor vulnerable. If a competitor believes, or example, that t has unusually strong customer loyalty. it may be vulnerable to competitive moves such as price cuts and new product introductions. Similarly. a firm can hold inaccurate assumptions about the industry or its environment. u.S. automobile firms. for example. had long felt that the demand for small cars was based strictly on economics: this erroneous belief made them vulnerable to foreign competitors whose cars offered more luxury components and were perceived to be of higher quality
The following questions can help identify competitors' assumptions. 12 including potentially erroneous assumptions
1. What are the competitor's beliefs about its strengths, weaknesses and overall position in the industry relative to costs product quality technological sophistication, and so on. Are the beliefs accurate?
2. How strongly from a histoncal or emotional perspective does the competitor identify with particular products and policies. such as selling approach. desire for product quality. and approach to product design?
3. What is the impact of cultural. regional. or national differences on the competitor's attitudes and perception of events? 4, Are there strongly institutionalized values or canons, such as those espoused by the competing firm's founder. that influence attitudes?
5. What does the competitor believe about future demand far its prod. ucts and other industry trends?
6. What does the competitor believe about its competitors' goals and capabilities? Are these beliefs accurate?
7. Does the competitor believe in conventional wisdom or rules of thumb. such as We must have a full line and Centralization is the key to success Do these beliefs make it vulnerable?
ENVIRONMENTAL CONSIDERATIONS
- which businesses tend to have parent's the largest impact on the overall portfolio relative to stability. cash flow. sales earnings. growth. and so on?
Knowledge provided by analyzing the above issues can help a firm locate positions in the market where it can meet its objectives without threatening competitors and perhaps touching of bitter warfare. if such a position is not available. the firm is still in a better position to develop strategies it can defend against existing and potential competitors.
Assumptions Gaining an understanding of a competitor's assumptions about itself and other firms in the industry can be quite beneficial to a firm. When these assumptions are not accurate. they can create"blind spots" that make the competitor vulnerable. If a competitor believes, or example, that t has unusually strong customer loyalty. it may be vulnerable to competitive moves such as price cuts and new product introductions. Similarly. a firm can hold inaccurate assumptions about the industry or its environment. u.S. automobile firms. for example. had long felt that the demand for small cars was based strictly on economics: this erroneous belief made them vulnerable to foreign competitors whose cars offered more luxury components and were perceived to be of higher quality
The following questions can help identify competitors' assumptions. 12 including potentially erroneous assumptions
1. What are the competitor's beliefs about its strengths, weaknesses and overall position in the industry relative to costs product quality technological sophistication, and so on. Are the beliefs accurate?
2. How strongly from a histoncal or emotional perspective does the competitor identify with particular products and policies. such as selling approach. desire for product quality. and approach to product design?
3. What is the impact of cultural. regional. or national differences on the competitor's attitudes and perception of events? 4, Are there strongly institutionalized values or canons, such as those espoused by the competing firm's founder. that influence attitudes?
5. What does the competitor believe about future demand far its prod. ucts and other industry trends?
6. What does the competitor believe about its competitors' goals and capabilities? Are these beliefs accurate?
7. Does the competitor believe in conventional wisdom or rules of thumb. such as We must have a full line and Centralization is the key to success Do these beliefs make it vulnerable?
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