3, 4 & 5 Flashcards
Network of interconnected major groups viewed as a unit and sharing a common culture
Society
Determine the strategic forces that can influence the growth and future of a company
Societal Environment
Political systems, tax laws, government programs and priorities under the political or legal segment directly affect a business or the industry where it operates.
The Political or Legal Segment
The growth or recession of the economy, which is manifested by key economic indicates such as interest rates, inflation rates, and unemployment levels, affect all types of business.
The Economic Segment
refers to the customs, traditions, values, beliefs, and lifestyles in a society for a period of time.
The Sociocultural Segment -
The accelerates pace of changes and advancements in technology and communication has tremendously affected almost all types of business across industries. This segment can make product obsolete overnight and, at the same time, provide opportunities for creating new products in a short period of time.
The Technological Segment
refers to the observable characteristics of a population including age distribution, sex,race, ethnicity, religion, and income.
Demographic Segment
Variables included in this segment are the global trade liberalization, trade agreements among regional blocks.
Global Segment
The immediate external environment of a company. It is the environment where a company operates, which has an immediate effect on its operation, and where it interacts and faces its direct competitors. Sometimes referred to as the competitive environment of a company. To determine the level of competition and the forces that drive competition in the industry for a business to position itself accordingly.
INDUSTRY ENVIRONMENT
are the buyers of goods or services produced or rendered by a company.
Customers
Refer to persons or companies that provide the required materials, parts, or services to a business. Play a crucial role in production of goods and services.
Suppliers
Refer to banks, financial institutions, and financial intermediaries engaged in lending money to a borrower, usually for a fee in the form of interest.
Creditors
are the workers of a company who are highly responsible for the production of goods or delivery of services to the consumers. Help ensure the quality and quantity of products. The are the backbone of a business.
Employees
Refers to the system or institution that handles the affairs of a particular country.
Government
- are forces existing in the industry environment that produce, sell, or render products or services which are similar to those of a company
Competitors
slow growth, high prices, innovative efforts and poor distribution channels.
Embryonic or New Industry
haracterized by growing customer demand, falling prices because of the economies of scale, new competitors entering the market, developed infrastructure facilities, and improved distribution channels.
Growth Industry
once the demand and growth begin to slow down, industry moves to _____ Where competition is intense, companies have excess production, and prices are cut down to attract customers
Shakeout Industry
characterized by saturated market, slow growth, and limited demand. Companies at this stage consolidate to reduce intense rivalry.
Mature Industry
Mainly Negative Growth
Decline Industry
- This force is the strongest among competitive forces.
Rivalry among Competing Companies
refer to the new competitors joining an industry. They will bring new products, services to an industry that can erode profits of established companies.
Threat of New Entrants
A buyer has a strong and magnified bargaining power in an Industry
Bargaining Power of Buyers
substitute product pose great threats in an industry environment.
Threats of Substitute Products
- The intensity of the threat of the ___________ is strong if the product is unique, switching cost is very high.
Bargaining Power of Suppliers
- is an unhealthy competition in which the closest competitors or rivals engage in long price wars
Cutthroat Rivalry
- competitors are strongly battling for a higher market share, but they do not adopt destructive tactics.
Fierce or Strong Rivalry
- industry members earn acceptable profit levels while engaging in a healthy and lively competition.
Moderate or Normal Rivalry
Exists when most companies in an industry are relatively well-satisfied with their sales growth and market shares.
Weak Rivalry
Identifies a company’s internal strategic factors such as its strengths, and weaknesses to enable it to exploit opportunities and avoid threats of the external environment
Internal Environment Analysis
Refers to the environment within a company.
Internal Environment
Refers to the beliefs, values, practices, and expectations of every member of a company on how the company conducts itself.
Corporate Culture
Defines corporate identity. Source for gaining a competitive advantage. Way of doing things.
Corporate Culture
Pattern of relationships among the members of the company
Organizational Structure
Defines how tasks are to be performed,how resources should be utilized,and how relationships among employees should be defined.
Organizational Structure
Resources are assets owned or controlled by a company. Can be tangible or intangible assets.
Business Resources
Readily available from the reports and publications
Secondary Data
Approach adopted by a company about the way it generates money in the current business setting.
Business Model
Refers to a company’s resources and its capability to obtain benefits from them and to overcome competitive forces.
Competitive Advantage
Capability to exploit its resources at different functional levels to achieve competitive advantage.
Core Competency
Ability of a company to exploit its strategic resources.
Capability
The integration or coordination of cross functional capabilities
Competency
A company will gain ______ when its core competency is superior over that of its rival.
Distinctive Competency
Analytical Tool used to evaluate a company’s resources to gain competitive advantage.
VRIO framework
Assess the ability of a company to sustain profitability performance.
Strategic Managers
Ability to assume the function of a distributor.
Forward Integration
A group of companies offering similar or closely related products/services that satisfy the same needs of customers.
INDUSTRY
