-
A firm's macroenvironment consists of what factors (PESTEL)
- Political
- Economic
- Sociocultural
- Technological
- Ecological
- Legal
-
describes the influence government bodies can have on firms
political environment
-
Mainly affected by 5 factors: growth rates, interest rates, levels of employment, price stability and currency exchange rates
Economic environment
-
Capture a society's cultures, norms and values
Sociocultural
-
capture the application of knowledge to create new processes and products
Technological
-
Concern a firm's regard for environmental issues such as the natural environment, global warming, and sustainable economic growth
Ecological factors
-
Capture the official outcomes of the political processes that manifest themselves in laws, mandates, regulations and court decisions
Legal environment factors
-
What determines the competitive structure of an industry
- Size of competitors
- Whether the firm possess some degree of pricing power
- The type of product or service the industry offers
- Height of entry barriers
-
Industry characterized by many small firms, a commodity product, low entry barriers, and no pricing power for individual firms
Perfectly competitive industry
-
Industry characterized by many firms, a differentiated product, medium entry barriers and some pricing power
Monopolistic
-
Industry characterized by few (large) firms, a differentiated product, high entry barriers, and some degree of pricing power
oligopolistic
-
Exists when there is only one firm supplying the market
Monopoly
-
Can create a positive-sum game, resulting in a larger pie for everyone involved
Co-opetition
-
Increase demand for the primary product, enhancing the profit potential for the industry and the firm
Complements
-
Attractice industries for co-opetition are characterized by
- High entry barriers
- low exit barriers
- Low buyer and supplier power
- Low threat of substitutes
- Availability of complements
-
When formally unrelated industries begin to satisfy the same customer need
Industry convergence, often brought on by technological advances
-
a set of firms within a specific industry that pursue a similar strategy in their quest for competitive advantage
Strategic group
-
What generally happens with strategic groups
- Usually 2 based on 2 different strategies
- One pursues a low-cost strategy
- One pursues a differentiation strategy
-
Intra-group rivalry _______ inter-group rivalry
exceeds
-
Movement between strategic groups is
restricted by mobility barriers
-
Obstacles that determine how easily a firm can enter an industry
Often one of the most significant predictors of industry profit
entry barriers
-
Framework that determines the profit potential of an industry and shape a firm's competitive strategy
five forces model
|
|