External Environment part 2

Question 1

Benefits of a strategic group map

Answer 1

• Help us to determine direct competitors
• Reveal which firms have similar strategies
• Overall function: Segment industries on the basis of
  the strategies of their member firms

Question 2

Blind Spots in External Environment include:

Answer 2

1. Misjudging industry boundaries
2. Poor identification of competition
3. Faulty assumptions about competition
4. Paralysis by analysis

Question 3

Criticisms of Five Forces include:

Answer 3

• Little justification
• Static; generates only snapshots
• Does not guarantee sustainable competitive advantage
• Industry effects account for 20 percent of variance
  “Digitalization,” “globalization,” “deregulation” missing
• Macro environment is not well integrated
• Fails to take advantage of internal aspects