Chapter 2 Flashcards
What are the six environmental influences involved in the PESTAL framework?
- Political
- Economic
- Social
- Technological
- Environmental
- Legal
Political Factors examples
government policies, taxation changes, foreign trade
Economic Factors Examples
business cycles, interest rates, unemployment
Social Factors Examples
population changes, lifestyle changes
Technological Factor Examples
innovations, increased spending on R&D
Environmental Factors Examples
environmental protection regulations, global warming
Legal Factor Examples
employment laws, competition laws
Key Drivers of Change are
environmental factors likely to have a high impact on the success or failure of strategy
Scenarios
detailed and plausible views of how the environment of an organization might develop in the future (builds on PESTAL analysis)
Whats an industry?
is a group of firms producing products and services that are essentially the same
What is a market?
a group of customers for specific products or services that are essentially the same
What is a sector?
is a broad industry group especially in the public sector
What are Porters five forces? (measures the attractiveness of an industry)
1) the threat of entry
2) the threat of substitutes
3) the bargaining power of buyers
4) the bargaining power of suppliers
5) the extent of rivalry between competitors
Issues of the five forces analysis
1) apply at the most appropriate level - not whole industry
2) convergence of industries (mobile phones, camerars, MP3 players)
3) Note the importance of complementary products and services
Monopolistic Industries
an industry with one firm and therefore no competitive rivalry
Oligopolistic Industries
an industry dominated by a few firms, firms have power over buyers
Perfectly Competitive Industries
barriers to entry are low, there are many equal rivals with similar products
Hypercompetitive Industries
aggressive competitive interactions, constant disequilibrium and change
The 5 stage industry Cycle
- Development
- Growth
- Shakeout
- Maturity
- Decline
Uses of Strategic Group Analsys
- Understanding competition
- Analysis of strategic opportunities
- Analysis of mobility barriers
Strategic Customers
have the most influence over which goods or services are purchased
Critical Success Factors
source of competitive advantage. Are factors that are valued by customers
Blue Ocean Thinking
blue oceans are new market spaces where competition is minimized
Red Ocean
industries that are well defined and rivalry is intense
Strategy Canvas
compares competitors according to their performance on key success factors
The 5 stage industry Cycle - Development
Low Rivalry: innovation is key
The 5 stage industry Cycle - Growth
Low Rivalry: low entry barriers
The 5 stage industry Cycle - Shake out
Increasing Rivalry - Managerial and Financial strength key
The 5 stage industry Cycle - Maturity
Stronger buyers: Market share and cost key
The 5 stage industry Cycle - Decline
Extreme Rivalry - Cost and commitment key
Strategic Groups
organisations within an industry or sector with similar strategic characteristics, strategies or competing on similar bases.
