This course utilizes an inquiry based approach to understanding sources of competitive advantages in companies and other organizations.
Module 2 Part 4
Loading...
來自 University of New Mexico 的課程
Entrepreneurial Strategic Management
77 個評分
從本節課中
Week 2
How does the business environment influence the success of a company?
與講師見面
Doug E Thomas, Ph.D.Professor
International Management, Anderson School of Management
So, as a manager or an entrepreneur, it might seem kind
of unattractive to hear that one of the most popular business models is teaching
that you really only have one area that you can control or be successful in,
and that's choosing the right industry, choosing the right product market.
But I think as you'll see as we go along with this model of framework,
there is some power to it.
And there's probably more room for managers, or
business people, or entrepreneurs, to make decisions
even using this framework that will have an impact on success.
One way I like to introduce this model, Porter's Five Forces, is to focus in on
one aspect of it that you might draw an analogy from sociology in.
Have any of you ever taken a class in sociology?
Think about that for a minute.
If you take a class on sociology, whether on Coursera, or
at your local university, the study or
the discipline of sociology really looks at trying to understand things like
human behavior from a very particular perspective, a sociological perspective.
And the word sociology is related to a word like society.
When a sociologist tries to explain human behavior, he or she typically
will look at external or societal factors to explain that human behavior.
If you want to understand why some children end up being
millionaires, you look at external factors like the neighborhood they went to, or
the school that they went to.
And so in some ways Porter's Five Forces is
an external or sociological explanation of business success.
It's saying what matters most to your business is the industry that you're in.
And a more specific way of saying that is, it's the industry
environment that you're in that most contributes to your success.
And so it is an environmental or external explanation of success.
It's not focusing on government necessarily in the environment, or
technological change in the environment, it's focusing on the immediate
neighborhood that a business resides in, which is the industry or sector.
And so that's kind of an extreme way of looking at it,
but it might be helpful to some of you to try to understand what Porter
is getting at with this Five Forces model.
So the five forces, what each of them tries to do is
to show what a successful industry looks like.
And the impact these forces have on the industry and
the companies in the industry.
So for example, we're going to look at two of them here in this part, and
then in the next part we'll look at the other three.
We'll start right here on bargaining power suppliers and
try to understand how that one force impacts the success of an industry,
the profitability of an industry we might say, and the companies in it.
Think about what bargaining power of suppliers might mean for
a couple of minutes, or a couple of seconds.
What is that talking about?
It's one of the five forces in this model.
What might it be describing?
Typically when we talk about bargaining power of suppliers, we are talking about
the inputs that go into making the product that the industry is making.
So for example, if we were looking at the pizza industry, one that I
love to talk about as well, I use a lot of food examples, so I hope that doesn't
affect you're waistline as we go through this course, but the pizza industry.
What are the key inputs or supplies that you need to run a pizza company?
That's what we mean by suppliers.
You need people, right?
You need ingredients, you need the tomato sauce,
and the dough to make the pizza, right, and all of the toppings.
You need equipment, you need location or
real estate, most likely, and probably a whole host of other factors.
And so when we talk about bargaining power of suppliers,
what we want to understand is, is it the case that
the suppliers have more bargaining power over the companies in the industry, or
do the companies in the industry have more bargaining power over the suppliers?
If you think about it for a minute, the obvious thing that you'd like to have,
the obvious situation that you'd like to have would be for
the companies in the industry to have bargaining power over suppliers.
What types of things would they like to be able to bargain or
negotiate with their suppliers.
They'd like to be able to probably negotiate price.
They'd like to be able to tell workers how much they're going to pay them.
They'd like to be able to negotiate and bargain about quality.
Quality of the inputs, the products, quality of the tomato sauce, or
quality of the cheese, for example.
And if you think about that for a couple of minutes, what type of factor
would influence whether companies in the industry have bargaining power or
whether suppliers have bargaining power?
I think that if you thought about it for a couple of minutes, you would see that,
if there are very few companies in the industry, that the companies
in the industry will probably be the ones that have bargaining power.
If, in turn, there is only one source of a supply, you'd
probably find that the bargaining power lies in the supplier itself.
Let me give you a brief example.
The airline industry is one that's typically used
in understanding Porter's Five Forces.
So when I talking about airlines, I'm talking about British Airways, or
Delta Airlines, or think of the airline that's popular in your part of the world.
And historically in the United States,
the airline industry has been one that has not been very successful.
It's been one since the 1980s that has lost a lot of money.
And I'm talking about collectively, the majority of the companies in the industry.
And one thing that you might look at when you look at running an airline is,
what do you need to run that airline?
Well, you need several key inputs or supplies.
You need petroleum, you need people, and you need planes.
We probably could add some others to that list, but let's just focus on those three.
Historically in the United States,
the suppliers have had the bargaining power over the airlines.
The unions of employees, the unions that have formed to organize and
negotiate have had the power over the airlines to determine how much they will
be paid, how long they will work, what they will do, etc.
Petroleum, there aren't very many places in the world, or
companies that offer petroleum.
It's controlled by groups of countries in some cases.
And so the airline doesn't have much say over the price of petroleum.
And then in planes the airplanes themselves, there really are only two
manufacturers of major jets in the world, Boeing and Airbus.
[COUGH] Excuse me.
And so therefore the airlines, from this framework perspective,
the airline industry is a bad one, is not very attractive one, is one that you
wouldn't want to invest in because it has, it's a bad one because of these forces.
It has a negative result from each of these forces,
or the majority of these forces.
We've just looked at one, the bargaining power of suppliers.
We could look at the same thing to finish up this part,
when we talk about customers.
Who has the bargaining power?
Is it the industry we're looking at and the companies inside that industry,
or is it the consumers that are buying the product or service?
And from a company's perspective, inside the industry, they'd like
to be able to dictate to consumers what the price and the quality is going to be.
They don't want consumers to be able to tell them what price and
quality ought to be.
Now when you have a lot of competition,
you would expect consumers to have more bargaining power.
In the airline industry, continuing with that example,
historically we've seen that consumers have a lot of bargaining power.
And you might not see that intuitively at first glance, but
if you think about flying, it's not very often that we have to fly.
Perhaps if there's a death in the family we feel compelled to fly
to a funeral service, sadly, but in today's world we can
communicate via video camera over lots of different services.
We can send packages and letters electronically or through cargo services.
We can rent cars and drive, we can take trains, we can take ships, we can not go.
And there, historically in a lot of places including the United States,
have been a large number of providers, and
so consumers have been able to choose which airline to fly.
Now that's not always the case, depending on the community you live in.
But that's another force in this model that shows the airline
industry to be a very unprofitable one.
And so, if you're in the industry, the bottom line is you would love to have
the bargaining power over both your suppliers and your customers.
And so that finishes this part, where we focused on these two forces.
In the next part we'll finish this model or framework and
look at three of the other forces in Porter's framework.
