strategy part (II)

Question 1

describe the environmental analysis (PEST)

Answer 1

1. POLITICAL–> taxes, tariffs, trade politics, political stability, labor laws, government stability
2. ECONOMIC –> interest rates. inflation, exchange rates and gdp, employment rates.
3. SOCIAL–> health trends, pop growth, trends
4. TECHNOLOGICAL–> AT, communication methods.
5. Environmental
6. Legal

Question 2

what is the purpose of the PEST

Answer 2

• asses four specific external factors which may affect the market value of a business

Question 3

how to analyze industry trends and dynamics

Answer 3

1. identify industry: size, total revenues, and expected growth.
2. explain industry trends: long term-directions +shifts.
3. identify industry dynamics: factors which influence how industry evolves over time (competition, innovation, changes in consumer behaviour)

Question 4

purpose of the SWOT analysis

Answer 4

• focused on components of ONE company
• summarizes four aspects to show direct impact on a company

Question 5

Describe the SWOT analysis

Answer 5

internal:
- strength’s: characteristics that make business more competitive in the market
- weaknesses: contribute negatively to market success

external:
- opportunities: external factors that increase profitability
- threats: external elements that impede profitability

Question 6

describe porters five forces model

Answer 6

1. threat of new entrants: how easy/difficult it is for new companies to enter the market
2. bargaining power of buyers: power of consumers in industry
3. bargaining power of suppliers: # of suppliers to an industry and how much power they have with companies
4. threat of substitute’s: threat of competition of substitute products
5. competitive analysis of rivals: degree of competivness between companies in ame industry

Question 7

describe the value chain

Answer 7

1. inbound logistics–> inventory management, suppliers
2. operations-> process of manufacturing
3. outbound logistics–> distribution of products
4. marketing & sales–> ads, customer acquisition+ retention
5. services–> customer support, service

Question 8

describe growth startegies

Answer 8

• ANSOFF MATRIX

market penetration–> low risk
market development–> high risk
diversification–> highest risk
product development: highest risk