Macro and Industry Environment Flashcards
PESTEL Analysis
Political Economic Social/cultural Technological Ecological Legal
Porter: Competitive Advantage of Nations (a.k.a. Diamond)
- Firm structure, strategy, rivalry
- Factor conditions
- Demand conditions
- Related and supporting industries
Ohmae’s 5C’s
- Customer - tastes are converging
- Company - gain economies of scale
- Competition - global competitors encourage others to be global
- Currency volatility - setting up o/s reduces risk
- Country - cheaper access to resources in diff countries
Types of protectionism
~ tariffs/customs duties ~ restrictions on quantity allowed ~ minimum prices ~ subsidies for domestic products ~ slow inspection procedures
Free trade areas
members agree to lower barriers among themselves
Customers unions
common policies on barriers to external countries e.g. harmonised tariffs, taxes and duties among members
Common market
members become one trading area, free movement of all factors of production
Types of political risks
~ government stability
~ international relations
~ government ideology
~ information gov relationships
Limitations of globalisation
~ political risks
~ protectionism
~ trade blocks
Types of trade block
~ free trade areas
~ customs unions
~ common markets
Porter’s Five Forces
~potential entrants
~ bargaining power of suppliers
~ bargaining power of customers
~ substitutes
Industry types
Primary: agriculture, forestry, oil extraction
Secondary: processing materials, manufacture
Tertiary: provision of services
Industry life cycle stages
~ Introduction
~ growth/shakeout
~ maturity
~ decline
Industry life cycle: Introduction
~ innovator consumers
~ inelastic prices
~ few early rivals
Industry life cycle: Growth/shakeout
~ rivals enter
~ adaptor consumers
~ costs + prices fall
