Chapter 2 Terms Flashcards
Perceptual Acuity
Ability to notice anomalies, contradictions, and oddities before others
Environmental Scanning
Surveillance of a firms external environment.
Environmental Monitoring
Tracks evolution of environmental trends.
Competitive Intelligence
Gather intelligence from rivals. (Strengths and weaknesses)
Environmental Forecast
Predicts change (direction and scope of environmental change)
Scenario Analysis
Is an in depth approach. (some ways trends may affect an issue)
SWOT Analysis
Basic Technique for Analyzing firm and industry conditions
SWOT Analysis Internal
-Strengths and Weaknesses.
-Build strategy based on what you are good at.
SWOT Analysis External
-Opportunity and Threats
-Activity among rivals competing for same customers in an industry
General Environment
Composed of factors that are hard to control and predict. has factors
G.E. 1. DEMOGRAPHICS
Easily understandable and quantifiable. (Age, Affluence, ethnic compositions, geographic distribution of pop, greater disparities of income)
G.E. 2. SOCIOCULTURAL
Forces influencing values, beliefs, and lifestyles of society. (Women in workforce, concern for fitness/environment, postponement of family formation, etc).
G.E. 3. POLITICAL/LEGAL
Processes and legislative influencing environmental regulations that industries must comply. (TORT reform, taxation, ADA, Obamacare, etc)
G.E. 4. TECHNOLOGICAL
Developments lead to new products and services. Create new industries and alter existing ones. (Genetic engineering, internet technology, research in synthetic materials, etc.)
G.E. 5. ECONOMIC
Forces that affect all industries. (interest rates, unemployment, CPI, GDP, National Debt, stock market valuations)
G.E. 6 GLOBAL
Forces offer both opportunities and risk. (Changes in Global trade, currency exchange rate, trade agreements, terrorism, emergence of Indian and Chinese currency, etc).
Digital economy
Economic Transactions and business operations that are based on digital computing technologies
Competitive Environment
Factors in Task or industry environment that are relevant to firm strategies.
Effects of Digital Economy
-Globalization of business
-Disintermediation of Markets
-Reduce Asset intensity of business operations
-Increase collaboration
-increase customer expectation
- infusion of internet tech. into products.
Threat of New Entrants
Possibility that the profits of established firms in an industry may be eroded by new competitors
TONE Barriers of Entry
-Economies of Scales
-Production Differentiation
-Capital Requirements
-Switching costs
-Access to distribution channels
-Cost disadvantages/ independence of scales
Bargaining Power of Buyers
Buyers can force down prices, bargain for higher quality or more services, play competitors against each other.
B.P.O.B Examples
-Purchase stand. products in large volumes
-Profits low & switching costs are few
-Backward Integration is possible
-Buyers product quality is NOT affected by industry product.
Supplier Bargaining Power
Threaten to raise prices or reduce quality of goods
- Only few firms dominate Industry
no comp. from substitute products
-Suppliers sell to several industries
-Buyer quality AFFECTED by industry product
-Products are DIFFERENTIATED and HAVE SWITCH Costs
-Forward integration possible.
