Chapter 2 reading Flashcards
pepsico is more diversified than Coca-Cola due to its presence in the _____
food industry (frito lay)
assessing the influence of factors in the general environment is important for ____
planning for future success
_______ factors—like war and political unrest, variations in the strength of national economies, and new technologies—affect firm growth and profitability in the US and beyond.
External environmental
Understanding the external environment helps build the firm’s base of knowledge and information that can be used to:
- help build new capas/core comps
- buffer firm from neg environ impact
- pursue opps to better serve stkhldrs’ needs
The firm’s understanding of the external environment is matched with knowledge about its _____ (discussed in Chapter 3) to form its vision, to develop its mission, and to take strategic actions that result in strategic competitiveness and above-average returns
internal environment
firms cannot directly control the __________ segments and elements
general environment
The ______ is the set of factors that directly influence a firm and its competitive decisions and responses
industry environment
_______represents the firm’s understanding of its current competitors
competitor analysis
analysis of the ________ focuses on the future
general environment
_______ focuses on factors and conditions influencing firm profitability within its industry
industry analysis
_______ focuses on predicting the dynamics of rival’s actions, responses, and intentions
competitor analysis
________ is becoming an increasingly valuable source of data and information for analyzing the general environment
the internet
One strategy that firms can use to enhance their awareness of conditions in the external environment is to establish an analysis process involving…
scanning, monitoring, forecasting and assessing
_____entails the study of all segments in the general environment
scanning
Firms use the ____ process to either detect early warning signals regarding potential changes or to detect changes that are already underway
scanning
In most cases, information and data being collected or observed are ambiguous, incomplete, and appear to be unconnected
scanning
_______ is most important in highly volatile environments, and the system should fit the organizational context
Scanning
The Internet provides significant opportunities to obtain information. For example…
(scanning) Amazon.com records sign. info about visitors
also, websites get info using cookies
_____represents a process whereby analysts observe environmental changes over time to see if, in fact, an important trend begins to emerge
monitoring
The critical issue in _____ is that analysts be able to detect meaning from the data and information collected during the scanning process
monitoring
Effective ____ requires the firm to identify important stakeholders
monitoring
_________ can also provide information about successfully commercializing new technologies
scanning and monitoring
_______represents the process where analysts develop feasible projections of what might happen—and how quickly—as a result of the changes and trends detected through scanning and monitoring
forecasting
______represents the step in the external analysis process where all of the other steps come together
assessing
The objective of _____ is to determine the timing and significance of the effects of changes and trends in the environment on the strategic management of a firm
assessing
It is good to alert students to the fact that a major challenge for managers and firms engaging in the process of external analysis is to recognize ________ that may affect the analysis process
biases and assumptions
_______efforts should focus on segments most important to the firm’s strategic competitiveness to identify environmental changes, trends, opportunities, and threats that can be matched with the firm’s core competencies so that it can achieve strategic competitiveness and earn above-average returns
external analysis
the implications of changes and trends in the _____ segment may affect the political/legal segment both domestically and in other global markets.
economic
Important technology-related issues that might affect a broad variety of firms include:
- Increasing plant automation
- Internet technologies and their application to commerce and data gathering
- Uses of wireless technology
This approach allows firms to build on and use their core competencies while limiting their risks within the niche market.
globalfocusing
Ecological, social, and economic systems interact to influence what happens in this segment.
physical environment segment
Global warming, energy consumption, and sustainability are all examples of issues related to the
physical environment segment
It should be noted that, unlike the general environment, which has an ____ effect on strategic competitiveness and firm profitability, the effect of the industry environment is more _____
indirect, direct
Example: • The transformation of the steel industry when mini-mills (such as Nucor and Birmingham Steel) entered the industry in competition with integrated domestic producers such as US Steel and Bethlehem Steel
threat of new entrants
example: • The impact of the increase in the number of cell phone providers on the cost of having a cell phone (and the long-range, potential impact on the cost of local telephone service)
threat of new entrants
example: The increase in the number of Internet access providers and the effects of increased competition on such firms as CompuServe and America Online
threat of new entrants
______ can be overcome as a potential entry barrier by firms that produce multiple customized products or that enter an industry on a large-enough scale
economies of scale
manufacturing technology facilitated by advanced information systems has allowed the development of _____, and online ordering has enhanced the ability of customers to obtain customized products (often referred to as “______”).
mass customization, markets of one
These are the one-time costs customers will incur when buying from a different supplier
switching costs
______could take the form of announcements of anticipated future investments to increase capacity, new product plans, price-cutting or a study to assess the impact of lower prices
retaliation
Small entrepreneurial firms can avoid retaliation by identifying and serving neglected market segments. For example,
Honda entered small engine motorcycle market to avoid harley
Suppliers are powerful when firm profitability is reduced by ___
suppliers’ actions
Armed with greater amounts of information about the manufacturer’s costs and the power of the Internet as a shopping and distribution alternative, consumers appear to be increasing their _____
power of buyers (bargaining power)
______ those products that are capable of satisfying similar customer needs but come from outside the industry and thus have different characteristics
substitute products
prices charged for substitute products represent the _______ on the prices that suppliers can charge for their products
upper limit
examples of traditional and substitute products and their usage
overnight deliver => fax/email sugar=> nutrasweet glass=> plastic containers coffee=> tea paper bags=>plastic bags (flexible packaging)
action taken by one firm generally will result in retaliation by competitors (also known as _______)
competitive response
how do our goals compare with out competitors’ goals?
Competitor analysis components: future objectives
where will emphasis be placed in the future?
Competitor analysis components: future objectives
what is the attitude toward risk?
Competitor analysis components: future objectives
how are we currently competing?
Competitor analysis components: current strategy
does their strategy support changes in the competitive structure?
Competitor analysis components: current strategy
do we assume the future will be volatile?
Competitor analysis components: assumptions
are we operating under a status quo?
Competitor analysis components: assumptions
what assumptions do our competitors hold about the industry and themselves?
Competitor analysis components: assumptions
what are our strengths and weaknesses?
Competitor analysis components: capabilities
how do we rate compared to out competitors?
Competitor analysis components: capabilities
What will our competitors do in the future?
Competitor analysis components: response
where do we hold an advantage over our competitors?
Competitor analysis components: response
how will this change our relationship with our competitors?
Competitor analysis components: response
Industries with a high number of firms can be characterized by _____ when firms feel that they can make competitive moves that will go unnoticed by other firms in the industry.
intense rivalry
Patterns of frequent actions and reactions often result in intense rivalry, such as in
local restaurant
retailing
dry cleaning
_____also is intense in an industry that has only a few firms of equivalent resources and power
rivalry
Battles for market share in the fast food industry between McDonald’s and Burger King; in the automobile industry between such firms as General Motors, Ford, and Toyota; and in athletic shoes between Nike and Reebok are examples of
intense rivalry between relatively equivalent competitors
McDonald’s, Burger King, and Wendy’s. The intensity of competition can be illustrated by the various competitive strategies followed by firms in the fast-food industry:
- Rapid and continuous introduction of new products and new packaging schemes
- The introduction of innovative-pricing strategies
- Product and/or service differentiation
Products that are not characterized by brand loyalty or perceived uniqueness are generally viewed by buyers as
commodities
assets whose value is linked to use in a particular industry or location, with little or no value as salvage or in other uses
specialized assets
such as labor agreements or a requirement to repay federal, state, or local aid packages
fixed costs of exit
interdependencies within the organization (e.g., shared facilities, market access)
strategic relationships
such as loyalty to employees or fear for one’s own career
emotional barriers
based on concern for job losses or the economic impact of exit
government and or social restrictions
. Because of ______, international markets and rivalry must be included in the firm’s analyses
globalization
In general, the stronger the competitive forces, the ____ the profit potential for an industry’s firms.
lower
characteristics of attractive industries
threat of new entry: low bargaining power of suppliers: low bargaining power of buyers: low threat of substitute products: low intensity of competitive rivalry: low
Unattractive industry: all high
relationship between the strength of industry forces and prices/profits in the industry is ___
an inverse one
When the forces are strong, prices/profits in the industry tend to be
low
weak forces usually lead to
higher prices/profits
Membership in a particular strategic group is determined by the essential characteristics of a firm’s strategy, which may include the
- Extent of technological leadership
- Degree of product quality
- Pricing policies
- Choice of distribution channels
- Degree and type of customer service
______concept can be useful in analyzing the competitive structure of an industry and can serve as a framework for assessing competition, positioning alternatives, and potential profitability of firms in an industry
the strategic group
______ represents a necessary adjunct to performing an industry analysis
competitor analysis
An ______ provides information regarding potential sources of competition
industry analysis
a ______ enables the firm to focus its attention on those firms with which it will directly compete, and is especially important when a firm faces a few powerful competitors
structured competitor analysis
______ is interested ultimately in developing a profile on how competitors might be expected to respond to a firm’s strategic moves
Competitor analysis
_______ is critical to competitor analysis because it helps a firm understand competitors’ intentions and the strategic implications resulting from them
performed both for domestic and international competitors
competitor intelligence
A major concern of many managers is the methods used to gather data on competitors, a process generally referred to as
competitor intelligence
