Chapter 2: The External Environment: Threats, Industry Competition, and Competitor Analysis Flashcards
General Environment
An environment that is composed of dimensions in the broader society that influence an industry and the firms within it.
Industry Environment
The set of factors that directly influences a firm and its competitive actions and responses: the threat of new entrants, the power of suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry among competing firms.
Competitor Analysis
How companies gather and interpret information about their competitors.
Opportunity
A condition in the general environment that, if exploited effectively, helps a company reach strategic competitiveness.
Threat
A condition in the general environment that may hinder a company’s efforts to achieve strategic competitiveness.
Demographic Segment
A population’s size, age, structure, geographic distribution, ethnic mix, and income distribution.
The Economic Environment
The nature and direction of the economy in which a firm competes or may compete.
The Political/Legal Segment
The arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding interactions among nations as well as between firms and various local governmental agencies.
The Sociocultural Segment
A society’s attitudes and cultural values.
The Technological Segment
The institutes and activities involved in creating new knowledge and translating that knowledge into new outputs, products, processes, and materials.
The Global Segment
Relevant new global markets and their critical cultural and institutional characteristics, existing markets that are changing and important international political events.
The Sustainable Physical Environment Segment
Potential and actual changes in the physical environment and business practices that are intended to positively respond to those changes in order to create a sustainable environment.
Industry
A group of firms producing products that are close substitutes.
Strategic Group
Set of firms emphasizing similar strategic dimensions and using a similar strategy.
Competitor Intelligence
The set of data and information the firm gathers to better understand and anticipate competitors’ objectives, strategies, assumptions, and capabilities.
