What’s Happening?!Chapter 2 SummaryChapter ObjectivesDefinitionCompetitiveness: A Link to National GoalsHow to Gain a Competitive Advantage?The Diamond of National AdvantageRole of GovernmentQuestionsChapter 3 SummaryCompetitive ModelSlide 12Porter Competitive Model ComponentsPrimary and Supporting StrategiesPorter Value ChainSlide 16Possible Exam QuestionsChapter 4 IntroductionKey PointsStill Consistently Profitable AirlinesPorter Competitive ModelAirline Business Strategy ModelAirline Industry StrategiesAmerican AirlinesIS in American AirlinesConclusionsChapter 42003 - A Hundred Years of FlightSlide 29Slide 30Airline Industry GoalsAirline ProfitabilityUnited Flight 815The National Commission to Ensure a Strong Competitive Airline IndustryAirline Industry ReportSlide 36Slide 37Slide 38Slide 39Slide 40Slide 41September 11 Impact1990-1993 Was a Disaster!Airline IndustryDecline in Air TravelInternational TravelSlide 47Load FactorsEuropean AirlinesLooking for OptionsDropping Point-to-Point FlightsUnions and VendorsUS Airline Industry Must Restructure or Die Aviation Week & Space Technology November 2002Aviation Week ContentionsCorrective ActionsAirline Industry US Market ShareIndustry Structure ProblemsA Sobering FactSlide 59Code Sharing AgreementsSlide 61Continuing ConcernsSlide 63Slide 64Four Three Consistently Profitable AirlinesSingapore AirlinesWhy SIA is So Good!Southwest AirlinesA Strength of Southwest AirlinesBest Airlines for Business TravelersDeregulated But Very RegulatedAirline AlliancesBarriers to EntryAirline Industry ConclusionsSlide 75What’s Happening?!What’s Happening?!The Apple Macintosh is 20 years old!Apple’s audacious machine is still taking chances at 20.Steve Jobs’ personality, values inseparable from the Apple saga.In an era where bean counters and marketeers call the shots. Steve Jobs is the last Big Kahuna still standing.Chapter 2 SummaryChapter 2 SummaryBusiness Competitive Business Competitive EnvironmentEnvironmentChapter ObjectivesChapter ObjectivesDefining competitivenessDefining competitivenessCompetitive ModelCompetitive Model–Competitiveness: A Link to National GoalsCompetitiveness: A Link to National GoalsCompetitive Advantage of NationsCompetitive Advantage of Nations–Diamond of National Advantage ModelDiamond of National Advantage ModelRole of GovernmentRole of GovernmentDefinitionDefinition““Competitiveness:Competitiveness:The degree to which a nation can, The degree to which a nation can, under free and fair market under free and fair market conditionsconditions, produce good and services that will meet the test , produce good and services that will meet the test of international markets while simultaneously maintaining or of international markets while simultaneously maintaining or expanding the real income of its citizens.”expanding the real income of its citizens.”Competitiveness: A Link to National GoalsCompetitiveness: A Link to National GoalsHumanResourcesCapitalTechnologyImprovedDomesticPerformanceMore andBetter JobsIncreasedStandard ofLivingStrongerNational SecurityDecreasedBudgetDeficitTradePolicyNewCompetitionIncreased World Market Competitiveness ReducedTrade DeficitHow to Gain a Competitive Advantage?How to Gain a Competitive Advantage?Provide value to the customerProvide value to the customerRight strategies - achievable and sustainable Right strategies - achievable and sustainable over time over time Know products and servicesKnow products and servicesKnow customersKnow customersKnow competitorsKnow competitorsThe Diamond of National AdvantageThe Diamond of National AdvantageFirm Strategy, Structure and RivalryFactorConditionsDemandConditionsRelated and Supporting IndustriesChanceGovernmentRole of GovernmentRole of GovernmentServe as a catalyst and challengerServe as a catalyst and challengerEncourage companies to raise level of Encourage companies to raise level of expectations - higher level of competitive expectations - higher level of competitive performanceperformanceDo anything that would promote Do anything that would promote unrestrained competition unrestrained competitionQuestionsQuestions1. 1. In order for companies to achieve and sustain a In order for companies to achieve and sustain a competitive advantage, what would a possible competitive advantage, what would a possible action plan include?action plan include?2. 2. For a government to perform effectively in its role For a government to perform effectively in its role as a catalyst and challenger, what objectives as a catalyst and challenger, what objectives should governments aim to accomplish?should governments aim to accomplish?Chapter 3 SummaryChapter 3 SummaryThe Porter Competitive Model for The Porter Competitive Model for Industry Structure AnalysisIndustry Structure AnalysisCompetitive ModelCompetitive ModelUnderstand and Evaluate:Understand and Evaluate:–Business environment structure of an Business environment structure of an industry.industry.–Threats of competition to a specific Threats of competition to a specific company.company.Porter Competitive ModelIntra-Industry RivalryStrategic Business UnitBargainingPower of BuyersBargaining Power of SuppliersSubstitute Products and ServicesPotentialNew EntrantsFigure 3-1Source: Michael E. Porter“Forces Governing Competition in IndustryHarvard Business Review, Mar.-Apr. 1979Porter Competitive Model Porter Competitive Model ComponentsComponentsIntraindustry RivalryIntraindustry RivalryBargaining Power of BuyersBargaining Power of BuyersBargaining Power of SuppliersBargaining Power of SuppliersThreat of New EntrantsThreat of New EntrantsThreat of SubstitutesThreat of SubstitutesPrimary and Supporting StrategiesPrimary and Supporting StrategiesDifferentiation Strategy (Primary)Differentiation Strategy (Primary)Low Cost Strategy (Primary)Low Cost Strategy (Primary)Innovation (Supporting)Innovation (Supporting)Growth (Supporting)Growth (Supporting)Alliance (Supporting)Alliance (Supporting)Porter Value ChainPorter Value ChainBasic Concept: 1. Deals with core business processes. 2. Enables tracking a new idea to create a new product and/or service from origination all the way to customer satisfaction.Generic Porter Value ChainGeneric Porter Value ChainINBOUNDLOGISTICSOPERATIONSOUTBOUNDLOGISTICS MARKETING AND SALES SERVICEPRIMARY ACTIVITIESPROCUREMENTTECHNOLOGY DEVELOPMENTHUMAN RESOURCE MANAGEMENTFIRM
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