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MBA in a nutshell

Revenue/Cost model

Profit
RevenueCost
PriceQuantityFixedVariable
  • Price discrimination
  • Changes in pricing structure
  • Viability of pricing over time
  • Discounts of couponing
  • Competitor’s pricing
  • Customer segmentation
    • New/existing
    • Loyal/switchers
  • Channel restrictions or temporary disturbances
  • Changing customer demands
  • Capital equipment
  • Land
  • Buildings
  • Labor
  • Material
  • Energy

The 3 C’s (Company, Customers, Competition)

CompanyCost structure, break-even, capacity utilization, cost compared to competitors, financial resources, company and product fit, core competencies
CustomersWho are they, how are they different (segmented), what is the level of competitive intensity in the industry, what channels do they use, how are products differentiated
CompetitionWho are they, how are they different, what are competitive market shares, is the industry fragmented, what is the level of competitive intensity in the industry, what channels do they use, how are products differentiated

The 4 Ps’ (Product, Price, Promotion, Place)

ProductPlace (distrubution)PromotionPrice
  • Differentiation
  • Customer segmentation
  • Competing and substitute products
  • Packaging
  • Why does the consumer purchase the product
  • Distribution to consumers
  • Distribution to retailers
  • Sales/retail incentives
  • Direct sales
  • New methods (warehouse stores, mail order, internet)
  • Advertising/P.R.
  • Imagine/reputation
  • Retail placement – aisle-end displays
  • New media
  • Retail pricing
  • Wholesale pricing
  • Competitor pricing
  • Price discrimination
  • Value pricing
  • Premium pricing

Porter’s 5 forces model

The Five Forces model of Porter is an Outside-in business unit strategy tool that is used to make an analysis of the attractiveness (value) of an industry structure. The Competitive Forces analysis is made by the identification of 5 fundamental competitive forces:

  1. Entry of competitors. How easy or difficult is it for new entrants to start competing, which barriers do exist.
  2. Threat of substitutes. How easy can a product or service be substituted, especially made cheaper.
  3. Bargaining power of buyers. How strong is the position of buyers. Can they work together in ordering large volumes.
  4. Bargaining power of suppliers. How strong is the position of sellers. Do many potential suppliers exist or only few potential suppliers, monopoly?
  5. Rivalry among the existing players. Does a strong competition between the existing players exist? Is one player very dominant or are all equal in strength and size.

Sometimes a sixth competitive force is added:

  1. Government.
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