Chapter 4 - The external environment Flashcards

1
Q

Analysing the Operational Environment

What are the basic steps in a common business model for organizations?

A
  1. Source raw material or knowledge. 2. Create value with the raw material or knowledge. 3. Deliver the product or service to a customer.
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2
Q

Analysing the Operational Environment

What factors enable a successful supply chain model?

A

Planning (strategic end goal) and Commercial reality (profitability and funding security).

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3
Q

Analysing the Operational Environment

Name the three categories of risks faced by businesses daily.

A
  1. Environmental influences, 2. Technological influences, 3. Human influences.
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4
Q

Analysing the Operational Environment

What is “strategic fit” in the context of business environments?

A

It’s the alignment between an organization’s internal resources, capabilities, and activities with the demands of the external environment.

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5
Q

Analysing the Operational Environment

Define the “internal environment” of an organization.

A

Everything within the organization that managers have greater control over.

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6
Q

Analysing the Operational Environment

What is the “micro environment” and what does it include?

A

It consists of competitors, markets, customers, and suppliers. Managers can’t control it but can influence it.

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7
Q

Analysing the Operational Environment

Describe the “macro environment.”

A

It is the general environment outside of an organization that includes factors beyond managerial control or influence.

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8
Q

Strategic Analysis Tools

What is PESTEL analysis?

A

A framework to analyze Political, Economic, Sociocultural, Technological, Environmental, and Legal factors to anticipate future opportunities and threats.

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9
Q

Strategic Analysis Tools

What are two key factors managers analyze in the “far” environment?

A

Changeability (likelihood of change) and Predictability (anticipation of changes).

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10
Q

Strategic Analysis Tools

What are the three types of forecasting?

A
  1. Single point forecasting, 2. Range forecasting, 3. Alternative futures forecasting
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11
Q

Strategic Analysis Tools

What is scenario planning?

A

The process of creating possible future scenarios to help managers develop strategic responses to different potential outcomes.

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12
Q

Industry and Competition

Name the five forces in Porter’s Five Forces model.

A
  1. Threat of new entrants, 2. Threat of substitutes, 3. Bargaining power of buyers, 4. Bargaining power of suppliers, 5. Competition and rivalry
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13
Q

Industry and Competition

What is the impact of a monopoly on competition?

A

It reduces competition as the industry is dominated by one firm.

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14
Q

Industry and Competition

List the stages of an industry’s life cycle.

A
  1. Introduction, 2. Growth, 3. Maturity, 4. Decline.
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15
Q

Industry and Competition

How does hyper competition affect a market?

A

It leads to intense price cuts and discounting, making it difficult to maintain a competitive advantage for long.

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16
Q

Analysing the operational
environment

What is market segmentation?

A

Market segmentation is the process of dividing a market into subgroups of customers with similar needs for targeted marketing. Examples include B2B vs. B2C, or segments based on age, lifestyle, and purchase patterns.

17
Q

Analysing the operational
environment

What are strategic groups?

A

Strategic groups are clusters of organizations within an industry with similar strategies or characteristics, such as supermarkets, convenience stores, and corner shops in retail.

18
Q

Analysing the operational
environment

Name three key dimensions of consumer and business markets according to Johnson et al.

A

1) Characteristics of people/organization, 2) Purchase or use patterns, and 3) User’s needs and preferences.

19
Q

Behavioural forces and game theory

What is game theory in strategic planning?

A

Game theory involves predicting competitor reactions by putting oneself in their position, considering how they may interpret strategic moves as signals, or adjust their strategy in response.

20
Q

Behavioural forces and game theory

List three key behavioural forces influencing strategic decisions.

A

1) The human psyche (ethics and morals), 2) Reliance on technology (trust in automated decisions), and 3) The impact of the media (demand for immediate responses).

21
Q
A