This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
This product (Structure-Conduct-Performance [SCP]) is a 16-slide PPT PowerPoint presentation slide deck (PPT), which you can download immediately upon purchase.
Structure-Conduct-Performance (SCP) is a framework for industry situation analysis. It makes relations among market structure, market conduct, and market performance. Within this construct, it provides a complete understanding of current industry structure, players, conduct and their competitive performance over time. SCP also offers a causal theoretical explanation for firm performance through economic conduct on incomplete markets.
SCP was first published by economists Edward Chamberlin and Joan Robinson in 1933; and later further developed by Joe S. Bain in his book "Industrial Organization" in 1959. Numerous consulting firms (such as McKinsey) and business academics (such as Michael Porter) have since adopted and enhanced this model.
In the modern version of SCP, there are 4 key components highlight:
The SCP framework is considered a pillar of Industrial Organization Theory.
The SCP framework is invaluable for dissecting the intricate dynamics of market interactions. By examining the interplay between market structure, conduct, and performance, executives can pinpoint the underlying factors driving industry trends. This PPT offers a granular look at how external conditions like legal, political, and technological factors influence market behavior, providing a comprehensive toolkit for strategic decision-making.
The presentation breaks down the SCP analysis into a structured 4-stage approach. It starts with studying basic conditions and moves through examining industry structure, predicting conduct, and evaluating performance. This methodical approach ensures that all relevant aspects are considered, making it easier to identify actionable insights and predict future market movements.
The document also highlights the importance of feedback loops within the SCP framework. It explains how market performance can influence conduct and structure, and vice versa. This cyclical understanding is crucial for developing strategies that are both adaptive and robust, ensuring long-term competitive advantage.
This PPT slide focuses on external conditions that significantly influence market dynamics, despite being outside the direct control of any industry. It emphasizes the importance of recognizing these factors for strategic planning and decision-making. The content is structured into 3 main categories: socioeconomic conditions, government policies, and infrastructure, each providing specific examples that illustrate their potential impacts.
Under socioeconomic conditions, elements like economic growth, demographic trends, socioeconomic class composition, and urbanization are highlighted. These factors can shape consumer behavior and market demand, making them crucial for businesses to monitor. For instance, shifts in demographic trends may indicate emerging markets or changing consumer preferences.
The government policies section outlines various regulatory and fiscal frameworks that can affect industries. Items such as fiscal and monetary policy, taxes and subsidies, regulations, and trade rules are listed. These policies can create both opportunities and challenges for businesses. For example, favorable investment incentives might encourage growth, while stringent regulations could impose operational hurdles.
Infrastructure is the final category, covering essential components like information and communications technology (ICT), transport and logistics, and education. A robust infrastructure can enhance operational efficiency and market accessibility, while deficiencies can hinder growth.
Overall, the slide serves as a reminder that external factors must be thoroughly considered in strategic planning. Understanding these conditions can help organizations navigate complexities and adapt to changes in the market landscape. This insight is vital for any executive looking to make informed decisions in an ever-evolving business environment.
This PPT slide outlines a structured four-stage approach to conducting Structure-Conduct-Performance (SCP) analysis, which is critical for understanding industry dynamics and company performance.
The first stage, "Study Basic Conditions," emphasizes the importance of analyzing both current and historical events that have shaped the industry. This foundational step is crucial for establishing context and understanding the factors influencing market behavior.
Next, "Examine Industry Structure" focuses on reviewing industry reports to identify recent changes in the industry landscape. This involves linking these structural changes to external conditions, which can provide insights into how external factors impact the industry’s framework.
The third stage, "Examine and Predict Conduct," requires a detailed study of recent industry conduct and its relationship to changes in the industry structure. This stage aims to identify patterns and trends that can help predict future conduct, which is essential for anticipating competitor actions and market shifts.
Finally, "Examine and Predict Performance" evaluates the performance of individual companies within the industry. This involves linking performance metrics back to the basic conditions and the previously analyzed structure and conduct. By doing so, organizations can forecast future performance and make informed strategic decisions.
The slide also notes a limitation of the SCP model, indicating that it often necessitates extensive analysis, which could be a consideration for resource allocation. This structured approach provides a comprehensive framework for executives looking to gain insights into their industry and improve strategic planning.
This PPT slide outlines the structural elements of an industry, emphasizing their stability over time. It categorizes these elements into several key areas: market demand, industry supply, value chain economics, economics of demand, economics of supply, and industry chain economics. Each category includes specific factors that define the industry’s framework.
Market demand focuses on aspects like category dynamics, growth drivers, substitutes, and price elasticity. These factors are crucial for understanding consumer behavior and market trends. Industry supply examines the level of competition, product differentiation, brand power, and barriers to entry, which are essential for assessing the competitive environment.
Value chain economics highlights the importance of economies of scale and scope, supplier economics, marketing effectiveness, and distribution economics. These elements are vital for optimizing operational efficiency and enhancing profitability. The economics of demand section addresses the availability of substitutes, product differentiation, growth rates, and market volatility, which influence consumer choices and pricing strategies.
Economics of supply discusses the concentration of producers, import competition, and the diversity of producers. It also considers the fixed and variable cost structures, capacity utilization, and the technological opportunities that can impact supply dynamics. Lastly, industry chain economics looks at the bargaining power of input suppliers and customers, as well as potential market failures.
The overall message is that while these structural elements can evolve, they tend to remain stable for extended periods. This stability provides a framework for strategic decision-making and long-term planning, making it essential for executives to understand these foundational aspects when evaluating industry dynamics.
This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
For $10.00 more, you can download this document plus 2 more FlevyPro documents. That's just $13 each.
ABOUT FLEVYPRO
This document is part of the FlevyPro Library, a curated knowledge base of documents for our FlevyPro subscribers.
FlevyPro is a subscription service for on-demand business frameworks and analysis tools. FlevyPro subscribers receive access to an exclusive library of curated business documents—business framework primers, presentation templates, Lean Six Sigma tools, and more—among other exclusive benefits.
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.
Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
Read Customer Testimonials
"As an Independent Management Consultant, I find Flevy to add great value as a source of best practices, templates and information on new trends. Flevy has matured and the quality and quantity of the library is excellent. Lastly the price charged is reasonable, creating a win-win value for
the customer, Flevy and the various authors. This is truly a service that benefits the consulting industry and associated clients. Thanks for providing this service.
"
– Jim Schoen, Principal at FRC Group
"Flevy.com has proven to be an invaluable resource library to our Independent Management Consultancy, supporting and enabling us to better serve our enterprise clients.
The value derived from our [FlevyPro] subscription in terms of the business it has helped to gain far exceeds the investment made, making a subscription a no-brainer for any growing consultancy – or in-house strategy team."
– Dean Carlton, Chief Transformation Officer, Global Village Transformations Pty Ltd.
"I am extremely grateful for the proactiveness and eagerness to help and I would gladly recommend the Flevy team if you are looking for data and toolkits to help you work through business solutions."
– Trevor Booth, Partner, Fast Forward Consulting
"I have used FlevyPro for several business applications. It is a great complement to working with expensive consultants. The quality and effectiveness of the tools are of the highest standards."
– Moritz Bernhoerster, Global Sourcing Director at Fortune 500
"As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value."
– David Coloma, Consulting Area Manager at Cynertia Consulting
"One of the great discoveries that I have made for my business is the Flevy library of training materials.
As a Lean Transformation Expert, I am always making presentations to clients on a variety of topics: Training, Transformation, Total Productive Maintenance, Culture, Coaching, Tools, Leadership Behavior, etc. Flevy
It is well worth the money to purchase these presentations. Sure, I have the knowledge and information to make my point. It is another thing to create a presentation that captures what I want to say. Flevy has saved me countless hours of preparation time that is much better spent with implementation that will actually save money for my clients.
"
– Ed Kemmerling, Senior Lean Transformation Expert at PMG
"As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor
the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant's toolbox.
"
– Michael Duff, Managing Director at Change Strategy (UK)
"Flevy is now a part of my business routine. I visit Flevy at least 3 times each month.
Flevy has become my preferred learning source, because what it provides is practical, current, and useful in this era where the business world is being rewritten.
many challenges and there is the need to make the right decisions in a short time, with so much scattered information, we are fortunate to have Flevy. Flevy investigates, selects, and puts at our disposal the best of the best to help us be successful in our work.
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.
Click main image to view in full screen.
