Chapter 4 - The organisational ecosystem: External environmental analysis Flashcards
What is the purpose of an environmental analysis?
Identify threats and opportunities
Assessment of competition
Identify stengths and weaknesses
Meet stakeholder needs
What does PESTEL analyse?
General macro-environment, identifying key drivers of change and hence sources of risk
What are Porter’s five forces?
Threat of new entrants
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitutes
Competitive rivalry
What are the 4 stages of the product life cycle?
Introduction
Growth
Maturity
Decline
What is the benefit of using the life cycle model?
Improved strategic planning
Improved budgeting
Proactive approach
What is competitor analysis?
Set of activities which examines the comparative position of competing enterprises within a given strategic sector
What three purposes of competitor analysis does Grant highlight?
Forecast competitors future strategies and decisions
Predict competitors likely reactions to firm’s strategic initiatives
Determine how competitor behaviour can be influenced to make it more favourable for the organisation
What are the 3 steps to competitor analysis?
- Identify competitor
- Analyse competitor
- Develop competitor response profiles
What are the four competitor response profiles?
Laid back
Selective
Tiger
Stochastic
What is a selective response?
Reacts to attack in only selected markets
What is a tiger response?
Always responds aggressively
What is a stochastic response?
No predictable pattern exists
What is included in Porter’s diamond?
Demand Conditions
Related & Supporting Industry
Factor Conditions
Strategy, Structure & Rivalry
What are two further factors that Porter points out that countries can produce world-class firms?
Role of government
Role of chance events
What are the criticisms of Porter’s diamond?
Developed the model by looking at ten developed countries
Model does not adequately address the role of multi-national corporations
Focused on manufacturers, banks and management consultancy firms
