BEC Deck 3-Economic Concepts Cont'

Question 1

3 Industry-independent/entity-independent generic strategies have been identified by Michael Porter:

Answer 1

1) Cost Leadership
2) Differentiation
3) Focus

Question 2

Strategic Process Summary of Sequence of Steps:

Answer 2

1) Establish the entity’s mission, values & objectives
2) Assess the entity & the environment in which it operates; also called environmental scanning.
3) Establish goals
4) Formulate Strategies
5) Implement strategies
6) Evaluate & Control strategic activities

Question 3

PEST analysis is an assessment of the:

Answer 3

1) Political Factors
2) Economic Factors
3) Social Factors
4) Technology Factors

Some variations include two more factors:

5) Environmental Factors
6) Legal Factors

Question 4

STEER is another variation which identifies the same kinds of factors as other macro-environmental models:

Answer 4

1)Sociocultural
2Technological
3)Economic
4)Ecological
5)Regulator

Question 5

Five Forces Analysis-Identifies factors that determine the operating attractiveness & likely long-run profitability of an industry. Those 5 forces are:

Answer 5

1) Threat of entry into the market by new competition
2) Threat of substitute goods or services
3) Bargaining power of buyers (customers) of the industry good or service
4) Bargaining power of suppliers of the inputs used in the industry
5) Intensity of Rivalry

Question 6

A SWOT analysis provides a framework for carrying out an assessment of the relationship between an entity and an operating environment.

Answer 6

S=Strengths are the resources & capabilities that provide the entity a relative competitive advantage in the market.
W=Weaknesses are shortcomings of an entity that place the entity at a relative competitive disadvantage.
O=Opportunities are the chances to benefit from external new or unmet demand, or from markets which provide the possibility for profit, growth or other desired outcomes.
T=Threats are the chance of adverse consequence to the entity as a result of external forces.