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BUSINESS ENVIRONMENT
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Technological and competitive Environment

Jul 29, 2015

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Page 1: Technological and competitive Environment

BUSINESS ENVIRONMENT

Page 2: Technological and competitive Environment

TECHNOLOGICAL AND

COMPETITIVE ENVIRONMENT

Page 3: Technological and competitive Environment

TECHNOLOGICAL

ENVIRONMENT

Page 4: Technological and competitive Environment

TECHNOLOGICALENVIRONMENT

•According to J.K Galbraith

“ Technology is a systematic application of scientific or other organized knowledge to practical tasks”

Page 5: Technological and competitive Environment

FEATURES OF TECHNOLOGICAL ENVIRONMENT

• Growth.

• Technology makes more technology possible.

• It requires research and development.

• Helps promote business using Technology.

• Shows not only the success of the firm but also of the country.

Page 6: Technological and competitive Environment

IMPACT OF TECHNOLOGY ON BUSINESS

• Increased Productivity.• Need For Professional Managers And

Skilled Employers.• Technology Creates Substitutes.• Technology Results In Opposition.• It Has Increased Business Mobility.

Page 7: Technological and competitive Environment

COMPETITIVE

ENVIRONMENT

Page 8: Technological and competitive Environment

COMPETITIVE ENVIRONMENT

• Means the immediate competitive factors in which an organization conducts its activities.

• Michael Porter’s Five forces of competitive positions analysis is a framework for assessing and evaluating the competitive strength and position of an organization.

Page 9: Technological and competitive Environment

Michael Porter's Five Forces Analysis

Rivalry Among Existing Compet

itors

Threat Of

New Entran

ts

Bargaining

Power Of

Buyers

Threat Of

Substitutes

Bargaining

Power Of

Suppliers

Page 10: Technological and competitive Environment

RIVALRY AMONG EXISTING COMPETITORS

• Organizations in an industry are affected by the number of competitors and capability of the competitors.

• Competitive strategies of an organization make use of techniques like rigorous promotion of products, providing good customer service, reducing the price of the product etc.

• When the fixed costs are high the rivalry among the firms increases because of economies of scale.

Page 11: Technological and competitive Environment

THREAT OF NEW ENTRANTS

• Second force that creates competition is new Firms entering the industry.

• Threat of new entry depends on the entry and exit barriers.

• When entry and exit barriers are low, the firms easily enter and exit the industry, the profit is low and vice versa.

• Government controls entry of new firms with policies and laws.

Page 12: Technological and competitive Environment

THREAT OF SUBSTITUTES

• Substitutes means the products of other firms.• Threat of substitutes means the threat when the demand for product of firm gets affected because the price of the substitute product of other firm gets changed.• Price of substitute commodities.

Page 13: Technological and competitive Environment

BARGAINING POWER OF BUYERS

• Powerful buyers are able to force the industry to reduce the prices of the products.• The smaller the number of buyers the greater is the bargaining power of the buyers.• The greater the size of the order; greater is the bargaining power of the buyers.• Cost of switching.

Page 14: Technological and competitive Environment

BARGAINING POWER OF SUPPLIERS

• When suppliers have bargaining power, they sell their products at higher prices and exercise power on the firm.• When supplier demands for more share in

profits, the profits of the firm get reduced.• If the product supplied has unique features

and has no substitutes, supplier is powerful; he can demand more price.

Page 15: Technological and competitive Environment

Competitive

Strategies

Page 16: Technological and competitive Environment

COST LEADERSHIP STRATEGY

• Goods are produced for broad customer base.

• Strict attention is given to product controls and budgets.

• There is little product differentiation.

• More importance is given on improving the productivity.

• Tries to understand the need of the specific market of consumers and creates a product that will attract the customers.

Page 17: Technological and competitive Environment

DIFFERENTIATION STRATEGY

• It is adopted to offer products which are unique.• The organization makes effort to create

brand loyalty.• Gives organization advantage over its

competitors .• Offers products that create value to

customers.

Page 18: Technological and competitive Environment

LOW-COST FOCUS STRATEGY

• Similar to Cost Leadership Strategy except that it focuses on niche market.• Product is not marketed to the entire

market but to a particular segment of consumers.• The focus is to provide goods at lower rate

to that particular segment.

Page 19: Technological and competitive Environment

DIFFERENTIAL FOCUS STRATEGY

• Also focuses on a particular segment of consumers like the low-cost strategy.• The product is marketed as being unique in

some way, to a particular segment.• In this strategy, the organization offers

something unique to the customers in the niche market.

Page 20: Technological and competitive Environment

THANK YOU