Quản trị kinh doanh - Industry evolution

Industry EvolutionThe industry life cycleIndustry structure, competition, and success factors over the life cycle.Anticipating and shaping the future.OUTLINEThe Industry Life Cycle Drivers of industry evolution :demand growthcreation and diffusion of knowledge Introduction Growth Maturity DeclineIndustry SalesTimeProduct and Process Innovation Over TimeTimeRate of innovationProduct InnovationProcess InnovationStandardization of Product Features in Cars FEATURE INTRODUCTION GENERAL ADOPTION Speedometer 1901 by Oldsmobile Circa 1915 Automatic transmission 1st installed 1904 Introduced by Packard as an option, 1938. Standard on Cadillacs early 1950s Electric headlamps GM introduces, 1908 Standard equipment by 1916 All-steel body GM adoptes 1912 Standard by early 1920s All-steel enclosed body Dodge, 1923 Becomes standard late 1920s Radio Optional extra 1923 Standard equipment, 1946 Four-wheel drive Appeared 1924 Only limited availability by 1994 Hydraulic brakes Introduced 1924 Became standard 1939 Shatterproof glass 1st used 1927 Standard features in Fords 1938 Power steering Introduced 1952 Standard equipment by 1969 Antilock brakes Introduced 1972 Standard on GM cars in 1991 Air bags GM introduces, 1974 By 1994 most new cars equipped with air bags How Typical is the Life Cycle Pattern?Technology-intensive industries (e.g. pharmaceuticals, semiconductors, computers) may retain features of emerging industries.Other industries (especially those providing basic necessities, e.g. food processing, construction, apparel) reach maturity, but not decline.Industries may experience life cycle regeneration. Sales Sales 1900 ‘50 ‘60 ‘90 1930 50 60 90 MOTORCYCLES TV’sLife cycle model can help us to anticipate industry evolution—but dangerous to assume any common, pre-determined pattern of industry development.ColorB&WPortableHDTV ?Evolution of Industry Structure over the Life Cycle INTRODUCTION GROWTH MATURITY DECLINE DEMAND Affluent buyers Increasing Mass market Knowledgeable, penetration replacement customers, resi- demand dual segments TECHNOLOGY Rapid product Product and Incremental Well-diffused innovation process innovation innovation technologyPRODUCTS Wide variety, Standardization Commoditiz- Continued rapid design change ation commoditizationMANUFACT- Short-runs, skill Capacity shortage, Deskilling Overcapacity URING intensive mass-production TRADE -----Production shifts from advanced to developing countries-----COMPETITION Technology- Entry & exit Shakeout & Price wars, consolidation exitKSFs Product innovation Process techno- Cost efficiency Overhead red- logy. Design for uction, ration- alization, low cost sourcingThe Driving Forces of Industry EvolutionCustomers become more knowledgeable & experiencedDiffusion oftechnologyDemand growthslows as marketsaturation approachesCustomers become more price consciousProducts become more standardizedDistribution channels consolidateProduction shifts to low-wage countriesPrice competition intensifiesBargaining power of distributors increasesBASIC CONDITIONS INDUSTRY STRUCTURE COMPETITIONExcess capacity increasesProduction becomes less R&D & skill-intensiveQuest for new sources of differentiationChanges in the Population of Firms over the Industry Life Cycle: US Auto Industry 1885-1961Source: S. Klepper, Industrial & Corporate Change, August 2002, p. 654.ROI at Different Stages of the Industry Life CycleNote: The figure shows standardized means for each variable for businesses at each stage of the life cycle. Strategy and Performance at across the Industry Life CyclePreparing for the Future : The Role of Scenario Analysis in Adapting to Industry ChangeStages in undertaking multiple Scenario Analysis:Identify major forces driving industry changePredict possible impacts of each force on the industry environmentIdentify interactions between different external forcesAmong range of outcomes, identify 2-4 most likely/ most interesting scenarios: configurations of changes and outcomesConsider implications of each scenario for the companyIdentify key signposts pointing toward the emergence of each scenarioPrepare contingency plan1880s 1920s 1960s 2000Mail order, catalogueretailinge.g. Sears RoebuckChainStorese.g. A&PDiscountStorese.g. K-MartWal-Mart“CategoryKillers”e.g. Toys-R-Us,Home DepotInternetRetailerse.g. Amazon;ExpediaWarehouseClubse.g. Price ClubSam’s ClubInnovation & Renewal over the Industry Life Cycle: Retailing?BCG’s Strategic Environments MatrixSmallBigSIZE OF ADVANTAGEManyFewSOURCESOFADVANTAGE FRAGMENTED SPECIALIZATIONapparel, housebuilding pharmaceuticals, luxury carsjewelry retailing, sawmills chocolate confectionery STALEMATE VOLUMEbasic chemicals, volume jet engines, food supermarketsgrade paper, ship owning motorcycles, standard (VLCCs), wholesale banking microprocessors BCG’s Analysis of the Strategic Characteristics of Specialization Businesseshigh lowENVIRONMENTAL VARIABILITYABILITY TOSYSTEMATIZElowhigh CREATIVE EXPERIMENTAL fashion, toiletries, magazines general publishing food products PERCEPTIVE ANALYTICAL high tech luxury cars, confectionery paper towels