Chapter 3

Question 1

Macro-environment

Answer 1

encompasses the broad environmental context in which a company is situated and is comprised of six principal components: political factors, economic conditions, sociocultural forces, technological factors, environmental factors, and legal/ regulatory conditions

Question 2

PESTEL analysis:

Answer 2

can be used to assess the strategic relevance of the six principal components of the macro-environment political, economic, sociocultural, technological, environmental and legal forces

Question 3

Political factors:

Answer 3

these factors include political policies and processes, including the extent to which a government intervenes in the economy.

Question 4

Economic conditions

Answer 4

include the general economic climate and specific factors such as interest rates, exchange rates, the inflation rate, the unemployment rate, the rate of economic growth, trade deficits or surpluses, saving rates and per capita domestic product. Economic factors also include conditions in the market for stocks and bonds which can affect consumer confidence and discretionary income

Question 5

Sociocultural forces

Answer 5

included the societal values, attitudes, cultural factors, and lifestyles that impact businesses, as well as demographic factors such as the population size, growth rate and age distribution. They vary by locale and change over time

Question 6

Technological factors

Answer 6

include the pace of technological change and technical developments that have the potential for wide-ranging effects on society.

Question 7

Environmental forces

Answer 7

these include ecological and environmental forces such as weather, climate, climate change and associated factors such as water shortage

Question 8

Legal and regulatory factors

Answer 8

these factors include the regulations and law which companies must comply such as consumer laws, labor laws, antitrust laws, and occupational health and safety regulations.

Question 9

Drive forces

Answer 9

are the major underlying causes of change in industry and competitive conditions

Question 10

Strategic group mapping

Answer 10

is a technique for displaying the different market or competitive positions that rival firms occupy in the industry

Question 11

Strategic group

Answer 11

is a cluster of industry rivals that have similar competitive approaches and market positions

Question 12

Framework for Competitor Analysis:

Answer 12

points to four indicators of a rivals likely strategic movies. These rival’s current strategy, objectives, capabilities, and assumptions about itself and the industry. A strategic profile of a rival provides good clues to its behaviors proclivities can be constructed by characterizing the rival along these four dimensions

Question 13

Current strategy

Answer 13

To succeed in predicting a competitor’s new moves, company strategies need to have a good understanding of each rival’s current strategy. Questions to consider include: How is the competitors positioned in the market? What is the basis for its competitive advantage? What kinds of investments infrastructure, technology, or other resources is it making?

Question 14

Objectives

Answer 14

an organization’s performance targets- the results management want to achieve

Question 15

Capabilities:

Answer 15

a rival’s strategic moves and countermoves are both enabled and constrained by the set of capabilities it has at hand. Thus rival’s capabilities and efforts to acquire new capabilities serve as a strong signal of future strategic actions.

Question 16

Assumption:

Answer 16

assessing rival’s assumptions entail considering their assumption about itself as well as the industry its participate

Question 17

Key success factors (KSFs):

Answer 17

are the strategy elements, product attributes, competitive capabilities, or intangible assets with the greatest impact on future success in the marketplace