The Business Environment for Competitive Strategy Flashcards
It is composed of dimensions in the broader society that influence an industry and the firms within it.
The General Business Environment
It is a set of factors that directly influence the company and its competitive actions.
Industry Environment
It refers to the gathering and interpreting of information and data about the business environment and how the other competitors are doing in the wide landscape of business.
Competitive Analyses
It is where seeing the industry in the future and how it will affect present and future operations. The general business landscape is wide and open for exploration and seeing the business condition miles ahead is an important factor in the survival of business.
The General Environment
It refers to the analyses of the firm’s conditions of profitability within the industry. The analyses will generate data on the firm’s capability to compete within the business industrial community on its products and services based on the programmed vision and mission.
The Industry Environment
The analyses of the competitors are focused on predicting the dynamics of competition that are related to their operational actions, responses and intentions. Seeing how the competitors operate will give insights on what strategies will most likely overcome the market competitions.
The Competitor
It is the process entails the study of all segments in the general environment. It is identifying the signals of potential changes in the environment that pose threats or opportunities that needed immediate actions.
Scanning
It is the process of carefully observing the changes in the environment and seeing the effects from the scanning of information. It is important to detect meaning in the changes of events and trends.
Monitoring
This is the result of scanning and monitoring, are derived from results of the analysis of the changes in the environment. It is the process of developing projections of what might happen and how quickly the company developed strategies to be competitive in the changing business landscape.
Forecasting
It is the process of determining the timing and significance of the effects of the environmental changes and trends on the strategic management of the company.
Assessing
This segment should be analyzed on the global basis as it has potential effects across countries. Globalization becomes the workings not only of big corporations but also small companies with borderless operations.
Demographic Segment
This refers to the nature and directions of the country in their economic development. Companies operate profitably in a country with economic stability.
the Economic Segment
It is the arena in which business organization operates and interest groups compete for attention and resources. It also deals with the voice of overseeing the implementation of the laws of the country which has something to do with trade and commerce.
The Political and Legal Segments
These are concerned with the society’s attitudes and cultural values. Attitudes and values differ among nations, and these play as the cornerstone of the society as they drive the demographic, economic and technological condition and change.
The Social and Cultural Segments
It is a social and business wherein activities have been pervasive and diversified in scope due to the advancement in technology. The advent of new technology has great effects in the development of new products, processes and materials required to produce new kinds of goods.
The Advancement on Technology Segments
The globalization of the business market creates both opportunities and challenges. The present scenario in trade and commerce is the creation of borderless flow of product and services.
The World of Business Segment
The industry is a group of firms producing products that are similar or close substitutes. They are competing for the share of the market pie and have influence on the strategy of the other firms.
Analysis of the Industrial Environment
New entrants usually have a keen interest in gaining a larger market share and force competitors to be more efficient and effective in the delivery goods to their customers.
The Threat of New Entrants
It refers to the marginal improvement in efficiency that the
firm experiences as it incrementally increases in size.
Economies of Scale
It is the customer’s perception that the product entering the market first is unique and this captures customer’s loyalty and patronage.
Product Differentiation
It is needed for the firm to enter a new market. Investments in terms of resources, manpower skills and new technology needed huge investments and the risk of overcoming those in the market is great.
Capital Requirements
This can be a strong entry barrier for new entrants as the old firm has established foothold on their distributors who have developed loyalty over time.
Access to Distribution Channel
The government policy on licensing and permit requirement can also control new entrants to an industry.
Government Regulations
The suppliers of material inputs in the production of goods are determinants of quality products.
The Power of the Suppliers
It is the firm’s objective which is to maximize returns on their invested capital as business operates for the desired profit.
The Buyer’s Bargaining Power
It is where the industrial world is full of innovations and firms seek new opportunities. There are many firms looking for new products to make business by studying substitutes to existing products in the market.
The Threat of Substitute Product
Competitive response is an active reaction that forces the
company to make innovations.
The Power of Competition
What are the five information of competitor that must be able to seek by the firm for the counter strategic actions.
- The competitors’ future objectives
- The competitors’ current strategic actions
- The competitors’ assumptions about the industry
- The competitors’ strength and capabilities or their weaknesses
- The government policy for the global market
