Week 3

Question 1

External Macro Environment Requires the — Analysis. Which is

Answer 1

PESTEL Analysis
Political
Economic
Social
Technological
Ecological
Legal

Question 2

Importance of External Environment:

Answer 2

Provides: Labor, capital, raw materials
Firms are dependent on each other

Question 3

Evaluating the Industry you use —
which consists of:

Answer 3

Porter’s five forces

The threat of new entrants
Bargaining power of supplier
Bargaining power of buyers
Threats of substitutes
Competitive Rivalry

Question 4

Two assumptions of the industry analysis:

Answer 4

1. No two firms are totally different
2. no two firms are totally the same

Question 5

What are Strategic Groups:

Answer 5

A cluster of firms that share similar strategies
-Breadth of product/geoagraphy
-Price/quality
-Degree of vertical intergration
-Lack of differentiation

Question 6

4 facts about Strategic Groups

Answer 6

-Rivalry is strongest in the same strategic group.
-Environmental and competitive forces impact strategic
groups differently.
-Strategic groups have different levels of profitability.
-Mobility barriers restrict movement between strategic
groups.