Chapter 4 - External Analysis Flashcards
1
Q
Organizations external environment - 7 components
A
- political, legal + regulatory factors
- economic conditions
- social forces
- technological factors
- natural environment
- global forces
- demographics
2
Q
complementary views for external analysation
A
- identifying + analyzing relevant actors from the macro-environment => stakeholder analysis
- analyzing the immediate industry + competitive environment => porter’s five forces
3
Q
Stakeholder analysis
A
=> positioning means active management of relationships w/ relevant stakeholders Attributes for stakeholder Analysis: Power Urgent Legitimacy (1) time sensitivity (2) critically
4
Q
industry + environment analysis - central questions
A
- opportunities for growth?
- competitive forces?
- driving changes in industry?
- market positions of rivals
- strategic moves rivals likely to make?
5
Q
Q2: competitive forces - porter’s 5
A
- competition from rivals
- competition from potential new entrants
- competition from substitute products producers
- supplier bargaining power
- costumer bargaining power
6
Q
(5 forces) rivalry strong when
A
- slowly growing buyer demand + excess capacity
- low buyer’s switching costs
- products weakly differentiated
- firms high fixed costs
- numerous competitors
- rivals face high exit barriers
7
Q
(5 forces) entry threats strong when
A
- low entry barriers
- members unable to contest entry
- many potential entrants
- members looking to expend market reach by new product segments/ geographic areas
8
Q
(5 forces) competition from substitute products producers strong when…
A
- good substitutes available + attractive price
- substitutes better/ comparable performance
- buyers low switching costs
- sales of substitutes growing faster
- producers expand capacity
9
Q
(5 forces) supplier bargaining power strong when
A
- supplier products are in short supply/ differentiated/ critical to production process
- high switching costs (industry members)
- no good substitutes
- suppliers not dependent on industry
- supplier industry dominated by 1/ 2
- limited backward integration possible
10
Q
(5 forces) buyers bargaining power strong when
A
- low switching costs
- standardized products
- few in number relative to sellers
- demand weak
- well informed about quality, prices etc.
- have ability to postpone purchase
11
Q
porters five forces
A
- analyses profit potential of an industry
- explains average industry profitability
-focuses on price and cost
=> the more powerful the forces, the more pressure on price/cost, the less attractive the industry to its incumbents
12
Q
porters five forces - analysis steps
A
- Define the relevant industry
- Identify the key players (in each of the five forces and group them into different categories (i.e., how strong is the impact of each group?))
- Identify underlying drivers of each force. Which forces are strong, and which are weak and why?
- Assess the overall industry structure. What is the industry‘s profit potential? Identify forces that directly influence industry profit potential (not all forces have an equal effect)
13
Q
Q3 driving changes -> what impact? - Analysis of industry dynamics
A
- identifying drivers of changes
- Drivers individually/ collectively? Make more/ less attractive?
- What strategy changes to prepare for impact of changes?
Tool: scenario Analysis
14
Q
Q4 market positions of industry rivals
A
constructing strategic group map:
- identify competitive characteristics that differentiate firms
- plot firms on two-dimensional map using pairs of differentiating competitive characteristics
- same map location = same strategic group
- circles around each strategic group => circle sizes = size of total industry sales revenue
15
Q
Q5 strategic moves of rivals
A
- competitive intelligence
- signals of the likelihood of strategic moves
