Session 1 Flashcards
How do company’s attract funds
Socialist model - central funds (government) that is dished out to various companies that go on and invest - most likely private companies
Market model - free market where company/director has idea and raise funds
Financial intermediaries
People who collect money that had been invested in things like banks/venture capitals/other investors and invest in a business idea
Strategy of company
Big picture = PEST
middle picture = porters analysis
Small picture = SWOT
PEST
political
Stability of market
National taxation policies
Planning controls
Health & safety legislation
PEST
Economic
World business cycle - growth/recession Consumer spending Interest rates - Demographics- old/young - savings Exchange rates
PEST
social
Demographics- ages Size of familia - have to move with trends - houses Health attitudes - more aware - environmental aware
PEST
Technology
Advances
Improvement in capital equipment- robots
Internet
Info tech
Porters 5 forces
rivalry among existing firms Threats of new entrants Threat of substitute products Bargaining power of buyers Bargaining power of suppliers
5 forces
Rivalry
Industry growth - fast/slow Concentration - few/many Differentiation Switching costs - client Exist barriers
5 forces
New entrants
Is it easy to enter field ? Scale economy First mover advantage Distribution access Relationships - loyalty Legal barriers
5 forces
Substitute products
Relative price / performance Buyers willingness to switch Don’t compare like for like: cinema vs Netflix Train and plane
5 forces
Bargaining power of buyers
Switching costs
Perception - more expensive doesn’t always mean better
Importance of product for cost and quality
Number of buyers
Volume per buyer
5 forces
Power of suppliers
Switching costs
Importance of product for cost and quality
Number of suppliers - quality
Volume per supplier
Industry life cycle
Start-up stage - rapid growth Consolidation - stable growth Maturity - slowing growth Relative decline - minimal/neg growth
