Chapter #2 Flashcards
The ability to sense what is coming before the fog clears.
Perceptual Acuity
Surveillance of a firm’s external environment to predict environmental changes and detect changes already under way.
Environmental Scanning
A firm’s analysis of the external environment that tracks the evolution of environmental trends, sequences of events, or streams of activities.
Environmental Monitoring
A firm’s activities of collecting an interpreting data on competitors, defining and understanding the industry, and identifying competitors’ strengths and weaknesses.
Competitive Intelligence
The development of plausible projections about the direction, scope, speed, and intensity of environmental change.
Environmental Forecasting
An in-depth approach to environmental forecasting that involves experts; detailed assessments of societal trends, economics, politics, technology, or other dimensions of the external environment.
Scenario Analysis
A framework for analyzing a company’s internal and external environments and that stands for strengths, weaknesses, opportunities, and threats.
SWOT Analysis
Factors external to an industry, and usually beyond a firm’s control, that affect a firm’s strategy.
General Environment
Genetic and observable characteristics of a population, including the levels and growth of age, density, sex, race, ethnicity, education, geographic region, and income.
Demographic Segment of the General Environment
The values, beliefs, and lifestyles of a society.
Sociocultural Segment of the General Environment
How a society creates and exercises power, including rules, laws, and taxation policies.
Political/Legal Segment of the General Environment
Innovation and state of knowledge in industrial arts, engineering, applied sciences, and pure science; and their interaction with society.
Technological Segment of the General Environment
Characteristics of the economy, including national income and monetary conditions.
Economic Segment of the General Enviroment
Influences from foreign countries, including foreign market opportunities, foreign-based competition, and expanded capital markets.
Global Segment of the General Environment
Economic transactions and business operations that are based on digital computing technologies.
Digital Economy
The process of examining large data sets to uncover hidden patterns, market trends, and customer preferences.
Data Analytics
A group of firms that produce similar goods and services.
Industry
Factors that pertain to an industry and affect a firm’s strategies.
Competitive Environment
A tool for examining the industry-level competitive environment, especially the ability of firms in that industry to set prices and minimize costs.
Porter’s Five Forces Model of Industry Competition
The possibility that the profits of established firms in the industry may be eroded by new competitors.
Threat of New Entrants
Decreases in cost per unit as absolute output per period increases.
Economies of Scale
The degree to which a product has strong brand loyalty or customer loyalty.
Product Differentiation
One-time costs that a buyer/supplier faces when switching from one supplier/buyer to another.
Switching Costs
The threat that buyers may force down prices, bargain for higher quality or more services, and play competitors against each other.
Bargaining Power of Buyers
The threat that suppliers may raise prices or reduce the quality of purchased goods and services.
Bargaining Power of Suppliers
The threat of limiting the potential returns of an industry by placing a ceiling on prices that firms in that industry can profitably charge without losing too many customers to substitute products.
Threat of Substitute Products and Services
Products and services outside the industry that serve the same customer needs as the industry’s products and services.
Substitute Products and Services
The threat that customers will switch their business to competitors within the industry.
Intensity of Rivalry Among competitors in an Industry
A situation in which multiple players interact, and winners win only by taking from other players.
Zero-sum Game
Products or services that have an impact on the value of a firm’s products or services./
Complements
Clusters of firms that share similar strategies.
Strategic Groups
