arise when a company can take advantage of conditions in its environment to formulate and implement strategies that enable it to become more profitable
opportunities
arise when conditions in the external environment endanger the integrity and profitability of the company's business
threats
a group of companies offering products or services that are close substitutes for each other
industry
products or services that stisfy the same basic customer needs
substitutes
a group of closely related industries
sector
distinct groups of customers wintin a market that can be differentiated from each other on the basis of their distinct attributes and specific demands
market segment
companies that are not currently competing in an industry but have the capability to do so if they choose
potential competitors
when unit costs fall as a firm expands its output
economies of scale
when consumers have a preference for the products of established companies
brand loyalty
when an established company has such a low cost structure that new entrants cannot expect to match this structure
absolute cost advantage
when it costs a customer time, energy, and money to switch from the products offered by one established company to the products offered by a new entrant
switching costs
the number and size distribution of companies in an industry
competitive structure of an industry
economic, strategic, and emotional factors that prevent companies from leaving an industry
exit barriers
companies that sell products that add value to the products of companies in an industry because when used together, the products better satisfy customer demands
complementors
within-industry factors that inhibit the movement of companies between strategic groups
mobility barriers
identifies five sequential stages in the evolution of an industry that lead to five distinct kinds of industry environment
industry life cycle
What are the 5 stages of the industry life cycle?
embryonic
growth
shakeout
mature
decline
states that long periods of equilibrium, when an industry's structure is stable, are punctuated by periods of rapid change when industry structure is revolutionized by innovation
punctuated equilibrium
What are the 5 forces behind Porter's Five Forces Model?