Quis Econ Flashcards
relating to any activity of creating, buying or
selling any kind of commodities or even providing
services to prospect buyers or clients.
Business
the lifeblood of any country’s economy. For this
reason, the topic on identification of business opportunities
through analysis of industry and environment, is a relevant
topic to be considered in the discussion
Business
include inflation rates, interest
rates, trade deficits or surplus, personal savings rate and
gross domestic product. These segments are all related
Economic segment
covers antitrust laws, taxation
laws, deregulation philosophies, labor training laws, and
educational philosophies and policies.
Political/legal segment
interests are women in the
workforce, workforce diversity, and attitudes about the
quality of work lifso
Sociocultural segments’
pertains to product innovations,
application of knowledge, focus of private and
government.
Technological segment
those related to important political
events, critical global markets, and newly industrialized
countries, different cultural and institutional attributes.
Global segments
concerns are energy
consumption, practices used to develop energy sources,
renewable energy efforts, minimizing a firm’s
environmental footprint, availability of water as a
resource, and producing environmentally friendly
produc
Physical Environmental segments
the message of
this segment on physical environment.
The care of mother nature
These segments are all relatedto determine how the economy performs
Economic segmen
segments
relate to the functions of the government in monitoring
the different economic and business related activities. The
government takes care of the proper use of its economic
resources
Political segment
This segment focuses on the role of
the human resources, its development and the society
Sociocultural segment
This segment supported R&D expenditures.
Modern technology aims to increase production with
limited cost.
Technological segments
This segment indicates the importance of understanding
the political, cultural, and economy of other countries in
order to compete in the international market
Global segment
population size, age
structure, geographic distribution, ethnic mix, and
income distribution. U
Demographic segment
A company’s power is affected by the force of new entrants
into its market
The threat of new entrants
This specifically deals with the ability of the customers to
drive prices down.
The Power of Buyers
powerful when there is no competition with
substitute products and the products make up an important part
of their buyers’ businesses.
Supplier
have the power to drive competition up they
threatening to increase their products or services’ prices or to
reduce the quality of the goods they provide.
Suppliers
Goods that
are interchanged with another
good.
Substitute goods
Competitors substitutions that can be used in place of a
company’s products or services pose a threat
The Threat of Product Substitutes
EXAMPLE: In the cosmetic industry, Avon and Mary Kay
have been two of the famous make up brands in the country.
But the entry of cosmetics brands that use organic and natural
ingredients has brought noticeable changes in the landscape
of the makeup industry
The threat of new entrants
If customers rely on a company to provide a tool
or service that can be substituted with another tool or service or by
performing the task manually, and this substitution is fairly easy
of low cost, a company’s power can be weakened.
Threat of Product Substitutes
The importance of this force is the number of competitors
and their ability to threaten a company.
The Intensity of Rivalry Among Competitors
Coca-Cola Co. and Pepsi Cola Co. have been
famous rivals in the soft drinks market.
The Intensity of Rivalry Among Competitors
involves the interaction of six factors:
concentration, diversity of competitors, product differentiation,
excess capacity, exit barriers, and cost conditions
Aggressive rivalry
pertains to the number and size of
distribution of firms. In industries dominated by one or
two firms
Concentration
This factor identifies firms’
differences in goals, strategies, objectives, and costs
structures – elements can drive competition
Diversity of Competitors.
Firms need to make their
products unique so these will stand out in the market
Product Differentiation.
Refers to a firm’s ability to create more
products then what customers demand.
Excess Capacity
What high exit barriers do is that they
prevent a firm from exiting an industry. This makes firms
operate at a marginal profit or loss, driving competition
even higher.
Exit barriers
Excess capacity causes price
competition. When costs are high, e.g., fixed costs relative
to variable costs, companies can adjust their prices if
there are no other hindrances to do so.
Cost conditions
The five mentioned factors is also known as the
PORTER’S FIVE FORCES OF COMPETITIVE POSITION
ANALYSIS.
framework or a guide for assessing
and evaluating the competitive strength and position of a
business organization
It was developed in 1979 by Michael E. Porter of
Harvard Business School
created in the 1960’s by business
gurus, Edmund P. Learned, Roland Christensen, and Kenneth
Andrews in their book, Business Policy, Text, and Cases
Swot analysis
an
analytical framework that can help a company meet its challenges
and identify new market
Swot
simple but useful framework for analyzing
the organization’s strength and weaknesses, and the opportunities
and threats. It h
Swot analyasis
can re-state its vision and mission and
eventually formulate and develop more effective
strategies
Stregth
re-channel the use
of its current resources to other productive use, and
minimize the loss. An
Weakness
influenced by internal or external
reasons.
Threats
Whats the differ betwren stakeholder and shareholder?
A shareholder is someone who owns stock in your company, while a stakeholder is someone who is impacted by (or has a “stake” in) a project you’re working on.
