06 - external analysis

7/31/2019 06 - External Analysis

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Dr. Harris [email protected]

harristk.blogspot.com


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1. External Analysis

2. Future Analysis


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Introduction

Our business model and strategy are set up by matching up toexternal and internal environment.

When external environment changes, the power of business

model and strategy is deterioratedreduce companys sales

and profit
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External analysis is identification factors outside the

company boundary that might influence its business

performance.

This analysis helps us to :o Provide an update understanding about environment

where we (will) compete

o Identify Opportunities and Threats

o Guide in creating scenarios in the futureo Initial information to guide strategy formulation


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New Entrant

Substitute

Supplier Buyer

Politic/Regulation

Economy

Technology

Globalization

Socio

Culture

Demography

General

Environment

Industry

Environment

CompetitiveEnvironment

Company Environment

(internal analysis)


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GoldenPeriod


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Description

Politic and

Regulation

Aspect

Align with government focus to develop health sector

Inpres: 01/2010 (3rd priority accelerating development)

PMK: 659/2009 (world class hospital)

Socio Culture Indonesians behavior and consumption are exposed high risk to strokeattack and its risk factors (hypertension, diabetes, hyper cholesterol,

smoking, heart attack, etc)

Economy GDB growth : Stable: 4.0% - 6.3%

Inflation : Stable: 5.0% - 6.6% BI rate : 6.5% since Aug-2009

Technology More advance to prevent death from stroke Few rehabilitation providers optimize those technology

Demography

234 mio in 2010, and predicted to 260 mio in 2020 (growth=1.05% p.a)

Globalization Attract more foreign competitor to entry: Kepres No 96 and 118 / 2000 (hospital ownership for foreigner)

CAFTA (January 2010)


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This analysis includes the description of:

1. Industry Definition

2. Industry Life Cycle

3. Industry Structure4. Industry Critical Success Factors

5. Industry Competitiveness


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Industry Definition:

Post stroke rehabilitation service providers in

Indonesia for upmarket.

Post stroke rehabilitation service providers:

o Their customers are dominated by stroke patients.

o Fee >= IDR 100.000 / therapy / hour


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Sales

Emerge Growth ShakeoutDecline orExtension

Industry

SalesorPr

ofit

Time

0

Mature

Life cycle

extension

rapid growth of suppliers

many differentiation opportunities

new customer relatively easy to catch


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Post stroke rehabilitation service providers:o Stroke Unit

o Stroke Clinic

o General rehabilitation

Fragmented geographically

No market domination

Relatively low differentiation

Low switching cost

Monopolistic market competition

Description of the functions, characteristics, activities

and interrelationships of organizations within a defined

industrial sector.


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The elements needed by companies in defined industrial

sector to exist or succeed.

Specialist (neurologist, medical rehabilitation, audiologist,

psychologist, etc.) attract, recommendation, coordinator.

Sourcing to high skill therapies increase recovery and

close interactions.

Building comfortable condition

make patients enjoy.

Equipments support therapies and as physical evidence.


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Rivalry

New Entrant

Substitute

Supplier Buyer

New Entrant Threat: Invested capital

Cost advantage

Differentiation

Switching cost

Access to channel

Regulation

Bargain power of Buyer:

Buyer concentration

Buying volume Differentiation

Switching cost

Information availability

Benefit for buyers

Integration threats

Bargain power of Supplier:

Supplier concentration

Buying volume Differentiation

Switching cost

Strategic value of input

Integration threats

Substitution Threats:

Price

Switching cost

Customer preference

Rivalry Intensity:

Industry growth

Fixed cost

Differentiation

Switching cost

Exit barriers


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What Five Forces Analysis for?o Broader understanding about external factors that

influence level of competitiveness,

o

Identify the strength of each forceso As guidance to formulate business strategy

Five Forces Analysis does not aim to test the

attractiveness of an industry.


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Rivalry

New Entrant

Substitute

Supplier Buyer

NEW ENTRANT THREAT:

Relatively low investment

Less differention

Low switching cost

Low restriction of regulations

SUBSTITUTION THREAT

Low switching cost

Much substitutes as supplement

BARGAIN POWER OF BUYER:

Less differention

Low switching cost

High benefit for buyer

Much credence attribute

Less power of negotiation

RIVALRY INTENSITY

Less differention

Low switching cost

High growth industry

No market power

Relatively less fixed cost Low exit barrier

HIGH

LOW

MEDIUMMEDIUMMEDIUM

BARGAIN POWER OF SUPPLIER:

Strategic value

Buying volume

Differentiation

Switching cost

For 3 kinds of input: knowledge,

equipment & talent; financial;

and general input.


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Competitive environment analysis aim to get

understanding about rivals (their products, target

market, cost structure, positioning, strategy, etc.)

Strategic group: group of companies that pursue

similar strategies, characteristics and competencies.

Strategic group can be used to:o Simplification in analyzing our rivals (competitors)o Identify the closest rivals

o Identify where we are (will be)


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Narrow

Moderate

Broad

1 - 2 2 - 4 > 4

GENERAL

REHAB

Distribution

Ch

annel

Number of Therapies

STROKE

UNIT

STROKECLINIC


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Stroke ClinicStroke Unit General Rehab

# of therapy 2 3 3 4 1 - 2

Specialist Much One few One

Inpatient Available (some) Mostly not available None

Nursing home None - Few Some None

# of channel 1 - 2 Few to some 1 - 2

Structure part of hospital independent business individual business

Differentiation Hospital reputation

Specialist

Various therapies

Various POD

Technical skill

Therapist reputation

Target Stroke patient Stroke patient broader


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Supply-Demand Analysis

Scenario Analysis


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y = 6961.9x2 - 67322x + 347491

R = 0.789

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Upmarket Stroke Patient


Trendline


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y = 6961.9x2 - 67322x + 347491

R = 0.789

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

1

998

1

999

2

000

2

001

2

002

2

003

2

004

2

005

2

006

2

007

2

008

2

009

2

010

2

011

2

012

2

013

2

014

2

015

2

016

2

017

2

018

2

019

2

020



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-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Supply

Demand

GAP


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Scenario analysis aim to describe the possibility of

future conditions.

Identify some uncertainty indicators (at least 3

indicators)

Based on those indicators, describe three or more

scenario, e.g. pessimistic, most likely, optimistic; or

modest downturn, more severe recession, full-blowndepression.


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Consumption

BehaviorGDP Growth BI rate

Impacts Number of

stroke patients

Proportion of

middle-up patient

Cost of capital

Trend in 2014-

2023

Not change Increase Increase

Consumption

Behavior

GDP

GROWTH

Decrease

Increase

Decrease

Increase

Decrease

Increase

More healthy

Not change

More unhealthy

Decrease Stable Increase

BI RATE

Pessimistic

Optimistic

Most Likely


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Most LikelyPessimistic Optimistic

Stroke Unit Expand capacity (space,therapist, equipment)

Develop new package Cross selling and

bundling

Improve unit to dept

Intensify R&D

Increase therapistsskill and competency

Expand branch (if any)

Stroke Clinic Expand capacity (space,therapist, equipment)

Expand branches Develop herbal

supplement

Alliance with specialist

Expand branches to

other cities

More completeorganization

More specialists

Inpatient & home-

based therapies

Increase therapy fee

Outsource therapies

Increase therapy fee

Outsource therapies


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Now, can you analyze

your company external factorsby your self?


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06 - external analysis

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