Register to read the introduction…
We have been exposed to the SWOT model and the Porter's 5 forces model. Both of these are important tools for the manager. The 5 forces model analyses the industry environment from its individual perspectives of threat of new entrants, threat of substitutes, power of buyers, power of sellers and internal rivalry. The net conclusions to draw from this model is the relative attractiveness of the industry from the incumbents' point of view and the forces which principally affect it, be they the power of sellers, buyers, threat of substitutes, threat from potential entrants or internal rivalry. The conclusions are common to all the incumbents. Therefore specific strategic analysis and recommendation w.r.t. internal industry competitors is not within the scope of this model. SWOT on the other hand is more wide ranging because it can cover any aspect of a company's internal environment. Unfortunately charges have been leveled against SWOT that the analysis tends to be subjective and vague. Both these charges can be taken care of if firstly, the comprehensive share holder requirement is considered as mentioned in the earlier part of this note. Further a strength, weakness has to be assessed in relation to competitors within the industry and potential competitors from outside the industry. For example, if a company believes its Sales and Distribution is a strength, as in the case of Titan
…show more content…
Every firm has to evaluate its position with respect to size and scope on a continuous basis. It is the natural inclination of a firm to grow where prospects for growth exist, and to think of moving into or moving out of industry where prospects are bleak. The various options of vertical growth have to be explored first which could take the form of forward or backward integration. These decisions depend firstly on the firm's accumulated expertise on the technologies and processes connected with their end products and services. It would also depend on whether the firm can manufacture the upstream or downstream products at an economically advantageous
Every firm has to evaluate its position with respect to size and scope on a continuous basis. It is the natural inclination of a firm to grow where prospects for growth exist, and to think of moving into or moving out of industry where prospects are bleak. The various options of vertical growth have to be explored first which could take the form of forward or backward integration. These decisions depend firstly on the firm's accumulated expertise on the technologies and processes connected with their end products and services. It would also depend on whether the firm can manufacture the upstream or downstream products at an economically advantageous