Module 2 Flashcards
involves surveillance of a firm’s external environment
Environmental scanning
Predicts environmental changes to come
Environmental scanning
• Detects changes already under way
Environmental scanning
Allows firm to be proactive
Environmental scanning
tracks.evolution of environmental trends
Environmental monitoring
Sequences of measurable facts/events
Environmental monitoring
Streams of activities or trends from outside the organization
Environmental monitoring
Helps firms define and understand their industry
Competitive intelligence
involves detailed assessments of the ways trends may affect an issue & development of alternative futures based on these assessments
Scenario analysis
Is a basic techniques for analysing firm amd industry conditions
Swot analysis
composed of factors that are both hard to predict and difficult to control:
General environment
Are easily understandable and quantifiable
Demographic segment
Influence the values beliefs and lifestyle of a society
Sociocultural segment
Processes and legislation influence environmental regulations with which industries must comply
Political/legal segment
Developments lead to new products and services; can create new industries and alter existing ones
Technological segment
Forces affect all industries
Economic segment
Forces after both opportunities and risk
Global segment
consists of factors in the task or Industry environment particularly relevant to a firm’s strategy:
The competitive environment
Porter’s five competitive forces
Threats of new entrants
Bargaining power of buyer
Bargaining power of supplier
Threats of substitute
Intense rivalry
possibility that the profits of established firms in the industry may be eroded by new competitors.
Threats of new entrants
can force down prices, bargain for higher quality or more services, play competitors against each other
Bargaining power of buyer
By threatening to raise proces or reduce the quality of purchased goods and services
Bargaining power of supplier
Limit the potential returns of an industry
Substitutes
tactics include price competition, advertising battles, new product introductions, increased customer service or warranties
Rivalry
