4 Impact of External Factors (Porter) Flashcards
Define Porter’s five forces
framework model used for analysing the competition within an industry and to identify the potential profitability of a particular strategic decision.
Name the forces/external factors
- threat of substitutes
- threat of new entrants,
- bargaining power of buyers
- bargaining power of suppliers
- competitive rivalry
Define PESTLE analysis
involves identifying external influences that can affect business activity.
Name the external influences in PESTLE
- political
- economic
- social
- technology
- legislation/legal
- environmental
Define demand
the quantity of goods/services desired at a given price and over a period of time.
Define supply
the amount of goods/services provided by suppliers at a given price and over a period of time.
Define competition
the rivalry that exists between businesses when they are trying to sell goods/services in the same market.
Define monopoly
just one business supplies the entire market.
Define oligopoly
a market that is dominated by a few very large products.
Define P2P
peer-to-peer lending are individuals who provide loans to other individual businesses through online services that match lenders with borrowers.
Define predatory pricing
setting a low price to force rivals out of business.
Define cartel
a group of businesses that act together to reduce competition in the market.
