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STRATEGIC MANAGEMENT > CHAPTER 3 > Flashcards

CHAPTER 3 Flashcards

1
Q

it is not the strongest of the species that survive, nor the most intelligent, but the one most
responsive to change.

A

Charles Darwin

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2
Q

“Nothing focuses the mind better than the constant sight of a competitor who wants to wipe you
off the map.”

A

Wayne Calloway, Former CEO, PepsiCo

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3
Q

The inventory of forces in the outside universe that influence the mission of an organization.

A

External Assessment

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4
Q

EXTERNAL STRATEGIC MANAGEMENT AUDIT

A
  1. Environmental Scanning
  2. Monitoring
  3. Forecasting
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5
Q

identifies external factors (opportunities and threats) that
could influence future decisions.

A

Environmental Scanning

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6
Q

the process of carefully tracking and observing the environmental changes
and seeing their effects

A

Monitoring

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7
Q

the result of scanning and monitoring.

A

Forecasting

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8
Q

APPROACHES and FRAMEWORKS IN ENVIRONMENTAL SCANNING:

A
  1. SWOT Analysis
  2. PESTEL
  3. Porter’s Five Forces Model
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9
Q

a framework for assessing and understanding the internal and external
factors that can impact an organization’s current and future strategic position.

A

SWOT Analysis

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10
Q

are internal factors that give an organization an advantage over others.
Identifying strengths helps organizations leverage their competitive advantages and build on
areas of excellence. (e.g. Strong brand reputation, skilled workforce, efficient processes, or
unique products.)

A

Strengths

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11
Q

Internal factors that place an organization at a disadvantage relative to
others.

A

Weaknesses

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12
Q

are external factors that an organization could exploit to its advantage.

A

Opportunities

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13
Q

are external factors that could pose challenges or risks to an organization.
Recognizing threats allows organizations to develop strategies to mitigate risks and navigate
external challenges.

A

Threats

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14
Q

provides a framework for analyzing and understanding the external
environmental factors that can impact an organization.

A

PESTEL Framework

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15
Q

these refer to the influence of government policies, political stability, and
the overall political climate of an organization.

A

Political Factors

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16
Q

Focuses on societal and cultural influences that can affect an organization,
including demographics, lifestyle changes, and cultural attitudes.

A

Social Factors

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17
Q

Encompasses the impact of economic conditions, such as inflation, exchange rates, interest rates, and overall economic stability.

A

Economic Factors

18
Q

this refers to the process of examining the impact of technology
on the industry and how innovation can affect an organization’s competitiveness.

A

Technological Factors

19
Q

these refer to factors related to the natural environment, including
sustainability, climate change, and ecological considerations.

A

Environmental Factors

20
Q

these encompass the impact of laws and regulations on business
operations.

A

Legal Factors

21
Q

is a framework used for analyzing the competitive
forces within an industry. The model helps assess the attractiveness and profitability of an
industry by examining five key factors that influence competition.

A

Porter’s Five Forces Model

22
Q

five key factors that influence competition.

A

1) The Threat of New Entrants
(2) Intensity of Competitive Rivalry
(3) The Threat of Substitute Products or Services
(4) Bargaining Power of Suppliers
(5) Bargaining Power of Buyers

23
Q

assesses the degree of difficulty for new companies to
enter a particular industry and potentially compete with existing businesses. Understanding the
threat of new entrants is crucial for existing firms to anticipate and respond to potential changes
in their competitive environment.

A

THE THREAT OF NEW ENTRANTS

24
Q

STRATEGIES TO AVOID THE THREAT OF NEW ENTRANTS:

A
  1. Economies of Scale
  2. Product Differentiation
  3. Capital Requirements
  4. Access to Distribution Channel
  5. Government Regulations
25
Q

this refers to the marginal improvement in efficiency that the firm
experiences as it incrementally increases in size. When the quantity of product produced
over time increases, the cost of production per unit decreases.

A

Economies of Scale

26
Q

Customers perceive that the products that enter the market
capture customers’ loyalty and patronage.

A

Product Differentiation

27
Q

industries with high initial investment requirements act as a
barrier to entry. New entrants may find it difficult to secure the necessary capital.

A

Capital Requirement

28
Q

existing companies may have well-established
distribution networks. New entrants might face challenges in securing shelf space or
distribution agreements.

A

Access to Distribution Channel

29
Q

industries with stringent regulations or licensing
requirements can limit the entry of new competitors. Compliance with regulations may
pose a significant barrier.

A

Government Regulations

30
Q

IMPACT ON INDUSTRY:

A

Low Threat of New Entrants
High Threat of New Entrants

31
Q

Industries with high barriers to entry are less susceptible to new
competition. Existing firms may focus on maintaining their advantages and investing in
innovation

A

Low Threat of New Entrants

32
Q

Industries with low barriers may experience increased
competition. Existing firms need to continually innovate, enhance customer loyalty, and
strengthen their competitive position to counter the threat.

A

High Threat of New Entrants

33
Q

This force measures the level of competition
among existing firms in an industry.

A

Intensity of Competitive Rivalry

34
Q

FACTORS INFLUENCING THE INTENSITY OF RIVALRY:

A
  1. Number of Competitors
  2. Rate of Industry Growth
  3. Product Differentiation
  4. Exit Barriers
  5. Brand Loyalty
35
Q

The more competitors in an industry, the higher the
intensity of rivalry.

A

Numbers of Competitors

36
Q

slow industry growth often leads to more competition for
market share.

A

Rate of Industry Growth

37
Q

If products are similar, competition is usually more intense.

A

Product Differentiation

38
Q

High exit barriers (difficulty in leaving the industry) can increase
rivalry.

A

Exit Barriers

39
Q

Strong brand loyalty can mitigate rivalry as customers may stick
with a particular brand.

A

Brand Loyalty

40
Q

This force assesses the likelihood
of other products or services replacing those of the industry.

A

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES

STRATEGIC MANAGEMENT (3 decks)

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