Competitive strategy and strategic agendas. Introduction. Porter’s five forces and strategic analysis, страница 6

MOVER                                                & E-COMMERCE GROWTH Figure 8. Tesco market entry — home shopping.

•  The high cost of selection and delivery of stock thus reducing margins

•  Erosion of in-store sales through delivery by a new distribution channel.

While some of the attractors and repellers might be generic to a similar type of player, some may be very different. For instance, for Safeway there are relatively few attractors and far more repellers. Its attractors might include:

•  The perceived need not to fall behind the innovations and best practice of other retailers.

•  The lack of size of many of its stores limits non-food sales and home shopping would facilitate this.

The repellers might include:

•  The high cost of picking and delivery of stock.

^•• Erosion of in-store sales.

TheperceptionthatSafewaydoesnothave the capability to attack on its stronger competitors.

By aggregating the attractors and repellers of the various rivals in an industry, a more complete and more dynamic view of the patterns of competitive rivalry can be created together with recognition of where rivalry will be the most vigorously contested.

Summarizing the linkages between the five forces and stakeholder analysis

Each of the five competitive forces should be analysed and then the cumulative effects of agendas impacting on each one should be considered in order to understand the industry dynamics more fully. This entails, for instance:

•  Relating the agendas of the buyer to those players up the industry chain, especially to rivals and suppliers (see the wholesaler/retailer example).

•  Understanding the impact of agendas of new entrants on existing players and thus on the agendas of rivals.

•  Exploring the influence of the agendas of suppliers of substitutes on the agendas of existing players and thus also (indirectly) on the levels of rivalry.

•  Evaluating the agendas of suppliers towards new entrants (which might be to help promote them or to dissuade them) or towards substitutes (which almost certainly will be to strive to minimise them).

Thetotal set ofinterdependenciesbetween the different layers is shown in Figure 9. Altogether there are ten possible interdependencies if the loops from supplier to buyer are included and also from entrant to substitute. From all these interrelationships it can be expected that a small sub-set is likely to emerge as most critical.

This methodology is likely to be particularly helpful when coping with disruptive industry change. By underpinningtraditional industry structure analysis with stakeholder agenda analysis we can help to predict the course of industry change and perhaps shape its evolution. To bring this alive it is also useful to draw out from scenarios the methodology of story telling to elicit new patterns in competitive response. This can be undertaken:

•  By describing the agendas of each of the key players in the industry. By drawing out their knock-on effects on one another.

Figure 9. Interrelating agendas — the five competitive forces.

•  Through scenario construction and storytelling then drawing out new patterns of competing and mind-set advantages.

•  By projecting the implications of these shifts for patternsof financialperformance in the industry (especially of cash generation and of cash investment/divestment) to ascertain the tangible impact of these stakeholder agendas.

Conclusion

Competitive strategy, and in particular the five competitive forces, can be significantly complemented and enhanced with the analysis of stakeholders and their agendas. Stakeholder analysis of key players or groups of players can give richer insights into not only the basis of industry structure but also of its dynamics, especially through scenario analysis and storytelling.

Figure 10. Influence over time curve. Figure 11. Attitude over time curve.