e Mergency Dossier Final

8/2/2019 e Mergency Dossier Final

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Dipti Bhende

Ccilia De Rovere

Aurlie FranoisSarah Huet

Euzhan Mancee

Ccile Nabias

Bndicte Thry

MARKETING PLAN

E-MERGENCY

Jean-Franois David

1 E-mergency Project


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Abstract

We are a team of researchers and managers. We want to create a package of services to increasethe efficiency of emergency services offered in France. Thanks to our experience in this domain

(some of us are doctors), we are aware of the difficulties encountered by urgentists and would

like to best respond to these problems with effective solutions.

The solution we propose is a package deal. It includes the following services:

A medical call-centre

A software that enables to find the best diagnosis as fast as possible

A possibility to access to the medical data of patients

Telephony, and live video and image sharing

The use of such a solution would provide better services to the patients, save time and money

for the hospitals as well as improving the reputation of the hospital.

Here is the principle of our package.

OK


DSS (Decision Support System)

1- Someone calls

15 or 18

2- The medical

agents go to the

place

3- The medical

agents dont

know how to

react

4- The agents

call our call-

center and send

live videos

5- Our operators find

the method to adopt

thanks to the

decision supportssystem and the

emergency medical

file. They can be

helped by a doctor.


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Table of Content

MARKETING PLAN ....................................................................................................................................................1

E-MERGENCY ..............................................................................................................................................................1

ABSTRACT ....................................................................................................................................................................2

I. CONTEXT ...................................................................................................................................................................4

III.1 METHODOLOGY................................................................................................................................................ 5III.2 PROCESS..........................................................................................................................................................5

YES .......................................................................................................................................................................5III.3 PLANNING........................................................................................................................................................6

IV.1 EXTERNALANALYSIS: THECOMPETITIVENESSOFTHEMEDICALENVIRONMENTIN 2006 ANDTHEPREDICTEDFUTURECHANGES..................................................................................................................................................................7

IV.1.1 Analysis of the competitiveness of the medical environment..................................................................7

IV.1.2 Future environment changes predicted .................................................................................................. 8

IV.2 INTERNALANALYSIS: CRITICALSUCCESSFACTORSWITHINTHEMEDICALMARKETANDE-MERGENCYSPOSITIONANDCORECOMPETENCIES ..........................................................................................................................................................9

IV.2.1 Critical success factors .......................................................................................................................... 9IV.2.2 E-mergency position this chapter a bit too early in the presentation.............................................. 10

IV.2.3 Core competences ................................................................................................................................ 12IV.3 EXTERNALANDINTERNALANALYSIS: SWOT .....................................................................................................12

OK, BUTABITTOOGENERAL .............................................................................................................................. ..12IV.4 INNOVATIVEIDEA............................................................................................................................................13

IV.4.1 The whole package .................................................................................................................... ........ .. 13IV.4.2 The call center .................................................................................................................................. ... 14

IV.4.3 IP phone and webcam .......................................................................................................................... 16IV.4.4 DSS (Decision support system) ............................................................................................................ 17

IV.4.5 Emergency medical file .............................................................................................................. ......... 17

IV.5 OURSTRATEGY..............................................................................................................................................18GOOD .................................................................................................................................................................18IV.6 RECOMMENDATIONS........................................................................................................................................19

OK .......................................................................................................................................................... ......... ...22IV.7 DISCUSSION...................................................................................................................................................23

REFERENCES .............................................................................................................................................................24

APPENDICES ..............................................................................................................................................................25

APPENDIX A .................................................................................................................................... ......... .......26

APPENDIX B .....................................................................................................................................................28APPENDIX C .....................................................................................................................................................30



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I. Context

In France, for many years, the emergency services have been overbooked and the queues are

endless. Out of 14 million of people who were brought to the emergency department, only 20%were hospitalized in 2003 in France (source: sant gouv.com). This underlines the importance

of pre-hospitalization diagnosis in order to simplify this service.

OK

Moreover, research findings show that almost half of the diagnosis and medical procedures

implemented (45% in the US - Academy of Sciences 2003) dont correspond to their scientific

recommendations. OK

Due to this they dont deliver awaited results. Certain medical errors committed lead to a huge

number of deaths every year (about 20,000 each year in France - Wikipedia). If we could avoid

such basic yet fatal errors we would save a lot of lives and even resources (These errors

correspond to 30% of the medical expenditure in France).

YES

Thus, emergency services need new processes to improve their efficiency in terms of time and

quality. To this purpose, we propose our own package of services called e-mergency. This

entails a call center for the SAMU, the firemen and other physicians that would enable them to

have immediate advice from specialized emergency doctors. Don't they already have?

With this advice, they could decide at this preliminary stage itself whether patients need to be

hospitalized or not. As these specialists are experts in their fields, it would further enable to

reduce he number of medical errors caused during the pre-hospitalization diagnosis.

Our firm would like to put in place a contract to sell these services to the Ministry of health. It

is the ministry which will then further provide these services to the final users. However, ourcompany has to first consider various aspects before making a conclusive decision. We have to

answer several questions like: What is the market demand for this type of services? What kind

of skills and competencies would we need to efficiently implement these services? What would

be our best added-value? How would we successfully penetrate this market?

OK

II. Objectives

The aim of this project is to show how the implementation of a new service on the French

emergency scenario will help reduce costs and save time.

Our main objectives are:

Doing a market research to understand the emergency services market, its problems and

its needs

Proposing an added value service / product adapted to the market demand

Putting in place a reasonable budget

From a quantitative point of view:

n (launch of theproject) n+2 n+4 n+6 n+8 n+10



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Fall in the number of

emergency patients

(%)

- 5 10 16 23 30

OK

III. Methodology / process / planning

III.1 Methodology

In order to achieve the objectives of our study, we followed the following methodology. We

started with a collection of data on the emergency services industry in France (external analysis)

and then we analyzed the strengths and weaknesses of our business (internal analysis).

To have a clear and global view of our research we used the following tools:

PESTEL analysis

It helped us understand the general environment and the political, economical, socialtechnological, environmental and legal barriers and opportunities to penetrate this market.

PORTER 5 FORCES analysis

It helped us analyze the competitiveness of the medical environment. The five forces are: the

risk of new entry by potential competitors, the extent of rivalry among established firms, the

bargaining power of buyers and suppliers, the threat of substitution products.

SWOT analysis

It helped us know where and how to reach our goal, and to adapt our strategy to our strengths

and weaknesses.

BCG matrix

It helped us determine how we should prioritize our product portfolio. According to this matrix,

the companys business units can be classified into four categories based on combinations of

market growth and market share relative to the largest competitors.

BOWMANS strategic routes

They helped us analyze our company's competitive position in comparison to what the

competitors offered.

OK

III.2 Process

To manage our study, we gathered data from different sources: Internet, business articles and

reviews (EBSCO HOST, Euromonitor Global Marketing, Diane) and interviews with members

of the SAMU were very helpful to understand the French emergency services market.

We first set up the project objectives in order to efficiently divide the tasks to be done amongst

all team members. Then, we conducted a market research (external analysis) that showed us the

lack of this kind of service on the emergency market. Our marketing plan (the mix)

recommended that we implement this service.

YES



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III.3 Planning

Milestones DELIVERY DATE

Launching of the project 1st September

Planning 6th September

1er jet 18th September

Market analysis 20th September

Communication plan, budget, risks,

recommendations20th September

Final report 22nd September

Oral presentation (PowerPoint) 25th September

Project presentation 26th September



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Private hospitals

Imitation companies

International companies

IV. Results

IV.1 External analysis: the competitiveness of the medical environment in 2006 and

the predicted future changes

IV.1.1 Analysis of the competitiveness of the medical environment.

The model of the Five Competitive Forces was developed by Michael E. Porter and can be used

to analyze visualize the competitiveness of the medical environment. The five forces are: the

risk of new entry by potential competitors, the extent of rivalry among established firms, the

bargaining power of buyers and suppliers, the threat of substitute products.


Bargaining power

of suppliers

Threatsofne

w

entrants

Bargainingpower

ofcustomersCompetitors:

Services offered by the SAMU

Cost pressurePrice pressure

Main client: French

Government

Final users: Samu,

Firemen, Paramedics,

Emergency

ambulance workers,Emergency Doctors,

Physicians and

emergency doctors

Nothreatof

substitutes

Lease companyHard ware companies (Objin)

Telephone Company

Software development firm (Noesis)

Medicine schools (part time students)

Training firms (Minerve)


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The Porter framework is important in order to see all the pressures and difficulties that e-

mergency will have to deal with. In this Porter framework, we may presume that the strongest

force that e-mergency will have to face is new entrants. They are numerous on the market and

they can become a real threat to it. To attract the Government attention, e-mergency will have to

take into account every critical success factor that final users seek. It is through specific corecompetencies that e-mergency will be able to achieve sustainable competitive advantage.

OK

IV.1.2 Future environment changes predicted

To study the future changes for the medical industry, we need to focus on PESTELs analysis.

The PESTEL framework categorizes influences into six main types: political, economic, social,

technological, environmental and legal.

Political context:

The bird flu in 2005 and other such epidemics have made the government realize the

importance of giving people access to more sophisticated medical care. The bird flu put

in place various services like call centers. We want to extend this service to all sorts of

illnesses.

SARS earlier saw similar services opening up in other countries.

Mdecins Sans Frontires were already allowed to perform similar work.

The heat waves which have been hitting France over the past few years have also

increased the importance of such services.

Economical context:

It is a new market which has not yet been exploited. The number of emergency phone

calls is constantly increasing and has recently reached 11 million per year.

The activity of SAMU has increased by 10% per year in case of emergency cases and

calls.

There is only one SAMU per department in France and 3-4 SMUR (SMUR deals with

more complicated cases which sometimes bring in helicopters and other such

emergency facilities).

Social context:

The emergency services in France are always full. 13 million people are brought into the

emergency units but only 19% of them are hospitalized. This shows the need for a service

which will render the emergency situation scenario more efficient.

Moreover, the number of elderly people in France is increasing. They require a lot of

emergency care. Here follows a table that shows this evolution:



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Evolution of the aged population in France, from the second world war till date:

Year From 60 to 64

years old

From 65 to 74

years old

From 75 to 84

years old

85 years old and

more

1946 1 998 090 3 060 305 1 218 095 161 603

1985 2 914 316 3 591 793 2 775 768 684 3682005 (p) 2 657 542 5 071 152 3 790 848 1 085 467

(p) : provisional data

Source : Insee, bilan dmographique.

Technological context:

SAMU already has emergency free telephone lines in place. However, more and more

sophisticated technologies are needed like webcams, location detectors, transfer of cardiograms

via telephone and internet.

Legal context:

LNE in France is responsible for this sector. It sets the norms, rules and regulations for setting

up any service in this sector.

Conclusion

The government is more and more concerned about public healthcare; however, the only actor

on the market (SAMU) cannot respond well to the increasingly occurring emergency situations.

On the other hand, new technologies have been developed that can help this service in terms of

efficiency.OK, not so bad

IV.2 Internal analysis: critical success factors within the medical market and e-

mergencys position and core competencies

IV.2.1 Critical success factors

According to Johnson and Scholes, Critical success factors are those product features that are

particularly valued by a group of customers and, therefore, where the organisation must excel to

outperform competition G. Johnson and K.Scholes (2002) Exploring Corporate StrategyFinancial Times-Prentice Hall p: 151-152.



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On the medical markets, companies were trying to achieve the following specific critical

success factors.

High level of quality: Considering the market (health care) on which our service is

positioned, optimal quality is highly important. The medical advice offered must be

precise and provided by skillful people. The waiting time must be dramatically reducedand technology cannot present any defect.

Easiness of use: The technology used for the service has to be simple in order to be

used easily by a variety of different actors: emergency doctors, auxiliaries, physicians,

firefighters

Innovation: Health care actors need an innovative service that is able to better meet

their specific needs in terms of emergency. They need to have personal support in order

to handle difficult situations.

Ok, a bit basic

IV.2.2 E-mergency position this chapter a bit too early in the presentation.

To study e-mergencys position, The Value Chain described by Michael Porter is helpful. It

enables to identify a firms value activities. To diagnose competitive advantage, it is necessary

to define a firms value chain for competing in a particular industry. Michael E. Porter

(1985)s Competitive Advantage: Creating and Sustaining Superior Performance Free Press

Chapter 2 p: 45

E-mergencys value chain illustrates the possibility to decentralize some of the activities to

other partners. We will identify the way we go through in order to mobilize the required

competencies and resources for the implementation of the service.

Our sponsors

The sponsors provide us the required financial resources for the development of our service in

exchange for the promotion of their brands. Our sponsors are: Draeger (specialized in the

manufacturing of ventilators), Ohmeda, Hewlett Packard, Philips, Datex, Abbott Medical,

Gygon.

Our Subcontractors

A software house will help us develop the technology required for our service in terms of

hardware (webcam and IP phones). We chose Objin, a French softawre house specialized in

medical engineering.

We will also subcontract the team responsible for the training of our workforce in the call

centers. We chose Minerve, a company specialized in the training in the medical industry.

ok



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Our partner

We will develop a partnership with Noesis, a company which has developed a free software

known for its reliability for medical professionals, hospitals, health care centers andorganizations.

Same remark. All that must be later, not far from implementation plan


Objin

Noesis

Draeger, Ohleta,

Hewlett Packard,

Phillips, Datex, Abott

Medical, Gygon

Minerve


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IV.2.3 Core competences

Core competencies are an essential part of a companys strategy. According to G. Johnson and

K. Scholes, core competencies are activities or processes that critically underpin an

organisations competitive advantage. G. Johnson and K. Scholes (2002)Exploring CorporateStrategy Financial Times-Prentice Hall Chapter 4 p: 156. Core competencies are also key in

managing the linkages between all the elements of the value chain.

E-mergencys core competencies are:

Skilled workforce: Our well-trained team will provide excellent, rapid response and

specialized service to end users.

Innovative technology: Our specific packaged service uses the most reliable latest

technologies and softwares.

According to Porter, Differences among competitor value chains are a key source of

competitive advantage Michael E. Porter (1985) Competitive Advantage: Creating and

Sustaining Superior Performance Free PressChapter 2 p: 36. Thats why e-mergency will be

able , thanks to its particular value chain and specific core competencies, to compete and

acquire a sustainable competitive advantage on its market.

IV.3 External and internal analysis: SWOT

STRENGTHS WEAKNESSES

Skilled workforce

Innovative technology

Knowledge of the market (some of us

are doctors)

Sponsors and partners

High quality services

Financial resources

Intensive labor

OPPORTUNITIES THREATS

Governments increasing interest inhealthcare topics

No competitor offers our service

Papy boom phenomenon

(emergency care increasingly

required)

Increasing use of new technologies

Numerous potential entrants

Ok, but a bit too general



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IV.4 Innovative idea

IV.4.1 The whole package

Product

Our service consists in a call-centre, an IP phone and webcam, a DSS (Decision support

system) and the emergency medical file. We can use the BCG matrix to define our product

according to the market

OK, needs a more in-depth description there



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Price

The service provided by our company uses the latest technologies and its price is therefore very

high.

Place

Our service will be sold to the French government which will put it in place in the regions. The

technological device will be provided to firemen and SAMUs.

Promotion

Our service is aimed at being sold to the government and the promotion will therefore be

directed toward that specific customer. To promote our service, we will contact the French

Ministry of Health to agree on a date to present our service with our marketing plan.

ok

IV.4.2 The call center

The regional SAMU (French mobile emergency medical service) of Lille already uses the

collaboration of the following teams to ensure the medical regulation:

a team of 4 regulating doctors on the set 24 hours a day, including one anaesthetist,

7 auxiliary operators with medical education (permanenciers) from 8 am to 8 pm,

5 other auxiliary operators from 8 pm to 8 am.


DILEMMA STARS

DOGS CASH COWS

Call

cente

r

Emergency

medical

file

Phone and

webcam

PACKAG

E

DSS

MARKETGROWTHRATE

RE

LA

TI

VE

MARKETSHA

RE


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The package includes a call centre reachable through a toll-free number. At the call centre, 12

auxiliary operators will be assisted in their decisions by a DSS and 5 doctors will be in charge

of the medical regulation.

The regional SAMU of Lille is one of the most active in France.

The call centre should to be able to receive many calls at a time: thats why we chose to use a

PABX (Private Automatic Branch eXchange) and an ACD (Automatic Call Distribution)software. An ACD is essentially a telecommunications switch that routes calls, either inbound,

outbound or both, between a caller and an agent. In this case, with the addition of a software

package and additional hardware, the in-house telecommunications switch (PABX) will support

a call centre and route traditional phone calls.

ok

The call-centre will also include the Computer Telephony Integration (CTI). This technology

allows interactions between a phone and a computer to be integrated or coordinated.

It will allow Automatic Number Identification, so that the agents will be able to determine

who is calling before they answer the call. This improvement will add to the quality of theservice and will help decrease the duration of the conversation.

The very high technology provided by our service suggests that we make an analysis of the

risks that could be faced when using it. To ensure 24/7 reliability, our service provides:

back-up power supply,

telephone back-up systems,

three off-site locations,

duplicate computer systems,

off-site data storage.

ok



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IV.4.3 IP phone and webcam

The firemen and emergency doctors will have helmets with headsets and video incorporated.

The helmets are linked to an IP network through Bluetooth and Wireless so that the doctor

dealing online with the problem can have a live vision of the patient.

Nice and funny. Describe a bit more.



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IV.4.4 DSS (Decision support system)

E-mergency is an "expert system" class software to be used in emergency medicine. Its internal

decision making 'thoughts' imitate those of experts in a case of emergency.

From a list of over 10,000 symptoms, signs or labs, items are selected and become part of the

inquiry. Using expert system techniques, the inquiry is matched against known medical

conditions. A short list is produced. The ranking of the list corresponds to the emergency cases

that are the most likely to be faced here by the doctor. The matching is performed using

mathematical and computational techniques and, when available, established medical

algorithms. Various options and settings can be used to focus such short lists. Clicking on an

item on the short lists brings up the information available about the condition.

GOOD

E-mergency is also a medical database. It is easily understandable: treatment and diagnosis are

part of the details. Information is from reputable emergency medical sources thanks to thepartnership of Cochin hospital. Indeed, we needed the knowledge about the procedure to follow

in case of emergency. Cochin hospital has this knowledge and allowed us to do this partnership.

This agreement provides a good image to the hospital and explains why the hospital would

agree to invest in the call center.

More than one explanation is often provided. It is also a "knowledge" system, which allows the

user to define meanings, equivalent or similar expressions, etc. E-mergency is also completely

updateable to include pictures, treatment charts, and any information specific to local

conditions. E-mergency is for emergency doctors, health professionals in any related field as

well as people who will be trained to use it in the call centre. There are different levels of

accessing data and knowledge. Everything depends of the educational degree of the person who

uses the service: for instance, a doctor will be able to have access to more detailed process than

a health professional.

ok

IV.4.5 Emergency medical file

By 2007, general practitioners suggest that their patients have their own Computerized Medical

File. It is a personal file in which the doctor gathers the relevant data about the health of a

person.

To extend this project to our service, we suggest that the gives its agreement to allow the doctorto select relevant information which will appear on a minimum medical file to be consulted in

case of an emergency.

The emergency services and medical intervention will have a permanent access to the medical

file thanks to a PDA (Personal Digital Assistant). In order to guarantee continuity in the health

care quality, the emergency doctor can give a feedback towards the medical file so as to inform

the general practitioner.



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IV.5 Our Strategy

Companies have to think about a competitive strategy. Indeed, according to G. Johnson and

K.Scholes, A competitive strategy is the bases on which a business unit might achieve

competitive advantage in its market G. Johnson and K.Scholes (2002) Exploring CorporateStrategy Financial Times-Prentice Hall p: 319

We can use The Strategy Clock to study the strategy that applies to E-mergency. (see

APPENDIX 3)

We want to provide a much differentiated product. Our package is an innovation on the market

and offers a high quality of service. The solution will help manage the lack of medical agents

and give access to a public service of high quality to everyone. We will offer a unique but

expensive package solution with an indisputable added value.

However, staff costs generally account for more than half the costs of running a call centre.

Thats why we decided to minimize the number of people using the technology, as described in

the presentation of the service.

GOOD



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IV.6 Recommendations

We made some hypothesis about the implementation scenario and here are our conclusions:

0 100 200 300 400 500 600Integr

ationCallce

nter

phone

andw

ebcam

DSS(De

cision

suppor

tsyste

m)

Emerg

encyM

edical

File

We used the PBS (Product Breakdown Structure) method to divide the implementation into

different modules. The modules are:

Emergency Medical File

DSS (Decision Support System)

IP Phone and webcam

Call center

Thanks to this decomposition, we will be able to do a parallel implementation of the tasks and

to subcontract some of them. With this method, we could have a prototype in one year and the

final product in two years. For the implementation, we propose to begin with a little town to

perform tests and incremental adjustments. In five years, we could implement our package in

every big city of France. In ten years we will be able to achieve our objective of decreasing thenumber of patients in emergency departments by 30%.

Why not

Our budget


TASKS

DAYS


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E-mergency expert system software Development

We estimate that this type of software requires 3 developers in one year will be 600 man/day *

350 euros (= 210 000 euros)

Hardware

o Server It will be necessary to host the web server and our emergency data base

on a server. This material does not need to be very powerful, because the

number of simultaneous connections for this call center is estimated at less than

100 as the team is composed of 17 people. Only one server estimated at 1500

euros is enough in this case.

o Call center hardware : 0,01 * (966 000 + 9660 + 36000) = 10116 euros

OK

Call center team for one year

o Total Salary per year

(12 auxiliary * 12000 euros + 5 doctors * 100 000 euros)*1.5 = 966 000

o Team Training per year

0,001 * 966 000 = 9660 euros

OK

Additional expenses


year 1 year 2 year 3 year 4 year 5

E-mergency expert system software

Development 210 000

Hardware 11616,00 server 1500

Call center hardware 10116

Call center team per year 975 660 975 660 975 660 975 660 975 660

Total Salary per year 966 000 966 000 966 000 966 000 966 000

Team Training per year 9660 9660 9660 9660 9660

Additional expenses per year 47616,00 47616 47616 47616 47616

Call center rent per year 36000 36000 36000 36000 36000

Maintenance for the software and call center 2467 2467 2467 2467 2467

Total 1 244 892 1 023 276 1 023 276 1 023 276 1 023 276


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o Call center rent per year36000

o Maintenance for the software and call center

0.002 * total for the first year= 2467 euros

e-mergency can also execute interactive dialogues and medical algorithms.

It is not just medical textbook information. Real cases are examined and symptoms/signs/lab

patterns are put into the database. The database is continually updated thus each new customer

receives the latest database.

e-mergency is a software more commonly known as 'differential diagnosis software' - The

system produces either a short list, in the order of the most likely, of the conditions which

should be considered when a patient presents with certain symptoms and signs (and has specific

test results if these available) or explains all the user needs to know in the one entry. It is

flawless and precise and exact in its diagnosis but only when the definition of a disease in the"symptom/indicator" pattern and the occurrence is absolutely correct. e-mergency is also a



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"database management expert system" - the user can copy, paste, classify and organize medical

information.. There are two main editions (or variations of these).

OK



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IV.7 Discussion

Before launching this service, we would like to discuss the following topics:

- Our customers

- Our targeted market

- Our service and its price

- Our budget

- Our incremental improvements

- Our international expansion



24/31

References

Michael E. Porter (1985) Competitive Advantage: Creating and Sustaining Superior

Performance Free Press.

Michael E. Porter (1980) Competitive Strategy: Techniques for Analyzing Industries and

Competitors Free Press.

D. Faulkner and C. Bowman (1995), The Essence of Competitive Strategy, Prentice Hall.

G. Johnson and K. Scholes (2002)Exploring Corporate Strategy Financial Times-Prentice Hall.

D. Collins and C. Montgomery (1995) Competing on Resources: strategy in the 1990sHarvard

Business Review Jul-Aug,Vol. 73 Issue 4.

Websites:

http://s139506224.onlinehome.fr/sante-urgences/

http://www.m6.fr/html/emissions/mavieauxurgences/chiffre.shtml

http://membres.lycos.fr/galiasp/lespompiers.htm

http://www.sae-diffusion.sante.gouv.fr/dwd_dwsaff1.aspx

Noesis: http://www.noesisvision.com/

Objin: http://www.objin.com/

Minerve : http://www.coursminerve.com/accueil.php

http://s139506224.onlinehome.fr/sante-urgences/http://www.m6.fr/html/emissions/mavieauxurgences/chiffre.shtmlhttp://membres.lycos.fr/galiasp/lespompiers.htmhttp://www.sae-diffusion.sante.gouv.fr/dwd_dwsaff1.aspxhttp://www.noesisvision.com/http://www.objin.com/http://www.coursminerve.com/accueil.phphttp://s139506224.onlinehome.fr/sante-urgences/http://www.m6.fr/html/emissions/mavieauxurgences/chiffre.shtmlhttp://membres.lycos.fr/galiasp/lespompiers.htmhttp://www.sae-diffusion.sante.gouv.fr/dwd_dwsaff1.aspxhttp://www.noesisvision.com/http://www.objin.com/http://www.coursminerve.com/accueil.php


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Appendices

Appendix A: the Five Forces model

Appendix B: the Value Chain

Appendix C: Bowmans strategy clock



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APPENDIX A

The model of the Five Competitive Forces was developed by Michael E. Porter in his book

Competitive Strategy: Techniques for analysing Industries and Competitors in 1980 has become

an important tool for analysing an organization industry structure in strategic process

Porters model is based on the insight that a corporate strategy should meet the opportunities

and threats in the organizations external environment. Especially, competitive strategy should

base on and understanding of industry structures and the way they change.

Porter has identified five competitive forces that shape every industry and every market. These

forces determine the intensity of competition and hence the profitability and attractiveness of an

industry. The objective of corporate strategy should be to modify these competitive forces in a

way that improves the position of the organization.

The stronger each force is, the more competitive is the industry and the lower is the rate of

return that can be earned.

The five forces are:

Bargaining Power of Suppliers

The term suppliers comprises all sources for inputs that are needed in order to provide goods

or services.

In such situations, the buying industry often faces a high pressure on margins from their

suppliers. The relationship to powerful suppliers can potentially reduce strategic options for the

organization.

Bargaining Power of Customers

Similarly, the bargaining power of customers determines how much customers can impose

pressure on margins and volumes.

Threat of New Entrants

The competition in an industry will be the higher; the easier it is for other companies to enter

this industry. In such a situation, new entrants could change major determinants of the market

environment (e.g. market shares, prices, customer loyalty) at any time. There is always a latent

pressure for reaction and adjustment for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to entry.

Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower prices of better

performance parameters for the same purpose. They could potentially attract a significant

proportion of market volume and hence reduce the potential sales volume for existing players.

Competitive Rivalry between Existing Players

This force describes the intensity of competition between existing players (companies) in an

industry. High competitive pressure results in pressure on prices, margins, and hence, onprofitability for every single company in the industry.



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Source: Michael E. Porter (1980) Competitive Strategy: Techniques for Analyzing Industries

and Competitors Free PressChapter 1 p: 4 Figure 1-1



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APPENDIX B

The Value Chain was described by Michael Porter in 1985 in his bookCompetitive Advantage:

Creating and Sustaining Superior Performance Free Press.

The idea of the value chain is based on the process view of organisations, the idea of seeing a

manufacturing (or service) organisation as a system, made up of subsystems each with inputs,

transformation processes and outputs. Inputs, transformation processes, and outputs involve the

acquisition and consumption of resources - money, labour, materials, equipment, buildings,

land, administration and management. How value chain activities are carried out determines

costs and affects profits.

Most organisations engage in hundreds, even thousands, of activities in the process of

converting inputs to outputs. These activities can be classified generally as either primary or

support activities that all businesses must undertake in some form.

According to Porter, the primary activities are:

Inbound Logistics - involve relationships with suppliers and include all the activities

required to receive, store, and disseminate inputs.

Operations - are all the activities required to transform inputs into outputs (products

and services).

Outbound Logistics - include all the activities required to collect, store, and distribute

the output.

Marketing and Sales - activities inform buyers about products and services, inducebuyers to purchase them, and facilitate their purchase.

Service - includes all the activities required to keep the product or service working

effectively for the buyer after it is sold and delivered.

Secondary activities are:

Procurement - is the acquisition of inputs, or resources, for the firm.

Human Resource management - consists of all activities involved in recruiting, hiring,

training, developing, compensating and (if necessary) dismissing or laying off

personnel.

Technological Development - pertains to the equipment, hardware, software,

procedures and technical knowledge brought to bear in the firm's transformation of

inputs into outputs.



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Infrastructure - serves the company's needs and ties its various parts together, it

consists of functions or departments such as accounting, legal, finance, planning, public

affairs, government relations, quality assurance and general management

Source: Michael E. Porter (1985) Competitive Advantage: Creating and Sustaining SuperiorPerformance Free PressChapter 2 p: 37



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APPENDIX C

The Strategy Clock is adapted from the work of Cliff Bowman, see D. Faulkner and C.

Bowman (1995), The Essence of Competitive Strategy, Prentice Hall.

The Strategy Clock is a suitable way to analyze a company's competitive position incomparison to the offerings of competitors. As with Porter's Generic Strategies, Bowman

considers competitive advantage in relation to cost advantage or differentiation advantage.

There are six core strategic options:

Option one - low price/low perceived added value: likely to be segment specific

Option two - low price: risk of price war and low margins; need to be a cost leader.

Option three Hybrid:low cost base and reinvestment in low price and differentiation

Option four Differentiation:

(a) without a price premium: perceived added value by user, yielding market share benefits

(b) with a price premium: perceived added value sufficient to bear price premium

Option five - Focused Differentiation: perceived added value to a particular segment

warranting a premium price

Option six - increased price/standard: higher margins if competitors do not value follow; risk

of losing market share.

Option seven - increased price/low values: only feasible in a monopoly situation

Option eight - low value/standard price: loss of market share



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Source: D. Faulkner and C. Bowman (1995), The Essence of Competitive Strategy, Prentice

Hall.

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