industry and competitive environments Show
external environment resources and organizational capabilities internal environment macro-environment encompasses the broad environmental context in which a firm is situated and is comprised of six principal components PESTEL analysis can be used to assess the strategic relevance of the six principal components of the macroenvironment State of Competition Where are we now? The dynamics of competition are not the same from on industry to another. The Five-forces Model of Competition Is the most powerful and widely used tool for assessing the strength of the competitive forces that affect an industry's attractiveness. Cutthroat (Brutal) Competitors engage in protracted price wars or habitually employ other aggressive tactics that are mutually destructive to profitability. Fierce(Strong) The battle for market share is so vigorous that the profit margins of most industry members are squeezed to bare-bones levels Moderate(Normal) The maneuvering among industry members, while lively and healthy, still allows most industry members to earn acceptable profits Weak Most industry members are satisfied with their sales growth and market share and rarely undertake offensives against their competitors. Driving forces are the major underlying causes of change in industry and competitive conditions. Some driving forces originate in the outer ring of the company's macro-environment but most originate in the company's more immediate industry and competitive environment.
Strategic group mapping is a technique for displaying the different market or competitive positions that rival firms occupy in the industry. A strategic group is a cluster of industry rivals that have similar competitive approaches and market positions • Key Success Factors (KSFs) are those competitive factors that most affect the ability of all firms in an industry to prosper. Specific product attributes Necessary resources, competencies, and capabilities Specific intangible assets Competitive capabilities Of the following questions, which would not be used to assess a company's industry and competitive environment? What forces are driving industry change? What kinds of competitive forces are industry members facing, and how strong is each force? Which financial objectives should be used to measure company performance? Do industry characteristics offer sellers opportunities for growth and attractive profits? Which financial objectives should be used to measure company performance? A PESTEL analysis can be used to assess the strategic relevance of the components of a company's competitive
environment. macro-environment. Assessing a rival's assumptions entails which of the following? considering assumptions about the industry in which the rival competes considering its assumptions about itself reviewing available information issued by the rival revising the definition of "assumption" to make it broader considering assumptions about the industry in which the rival competes considering its assumptions about itself reviewing available information issued by the rival Buyers with strong bargaining power can limit the industry profitability by demanding price concessions. demanding better payment terms. demanding additional features and services. demanding high volume of product. demanding price concessions. demanding better payment terms. demanding additional features and services. When consumers view the products of two companies as _____________, the companies engage in competition. substitutes Which of the following strategic questions can be used to assess a company's industry and competitive environment? What strategic moves are rivals likely to make next? Does the industry outlook offer good prospects for profitability? What are the key factors of competitive success? What strategic moves should the company make to reduce overhead in the short term? What strategic moves are rivals likely to make next? Does the industry outlook offer good prospects for profitability? What are the key factors of competitive success? For a factor to be considered "relevant" to the macro-environment, it should be important enough to shape management's decisions regarding which of the following? Adopting new technology Long-term direction Business model Objectives Long-term direction To sift through information and construct strategic profiles of rivals, some firms form a competitive ________ unit. intelligence Buyer bargaining power is strong when buyers place high importance on brand reputation. buyers make purchases in small quantities. demand is weak. the cost of switching to a competing brand is high. demand is weak. The competitive force of substitute products is strong when substitutes are attractively priced. acceptable substitutes are not available. substitutes are end users face high costs when switching to substitutes. substitutes are attractively priced. Which of the following are factors in a company's
macro-environment? technological factors economic conditions regulatory factors As the collective impact of the five competitive forces increases, the combined profitability of industry participants grows substantially. decreases. stabilizes. begins to equalize across a sector. decreases. Which of the following are strongly influenced by driving forces? the route of transportation vehicles the number of employees in a firm the industry landscape the competitive conditions the industry landscape the competitive conditions Technological change, marketing innovation, and innovation in manufacturing processes are all types of industry driving _______ forces The collective strength of the five forces can help determine if companies in the industry can reasonably expect to earn decent profits. the strengths and weaknesses of each company in the industry. a broad view of the industry's macro-environment. what specific strategy each industry participant should pursue. if companies in the industry can reasonably expect to earn decent profits. The best technique for identifying the market position of industry rivals is a driving forces analysis. strategic group map The first step in drawing a strategic group map is draw circles around each strategic group that are proportional to the group's share of industry revenues. plot firms on a two-variable map based on the strategic variables. assign firms occupying the same map location to a common strategic group. identify the variables based on strategic approaches used in the industry. identify the variables based on strategic approaches used in the industry. The most powerful industry change agents are called five forces. key success factors. driving forces. dominant economic characteristics. driving forces. According to Michael Porter, which of the following are likely indicators of a rival's strategic moves? the rival's market share footprint the rival's assumptions the rival's objectives the rival's capabilities the rival's assumptions the rival's objectives the rival's capabilities Which of the following are examples of industry driving forces? changes in who buys the product and how they use it product innovation changes in currency valuation around the globe increasing globalization changes in who buys the product and how they use it product innovation increasing globalization Which of following is NOT a likely key success factors? strategy elements competitive capabilities rivals' assumptions product attributes rivals' assumptions Which of the following factors can determine if a company has strong prospects for attractive profits? the company's position compared to that of rivals the number of employees per dollar of overhead whether competition will grow stronger or weaker the industry's growth potential the company's position compared to that of rivals whether competition will grow stronger or weaker the industry's growth potential A ______ is a cluster of industry rivals that have similar competitive approaches and market positions. distribution channel macro-environment strategic group market share indicator strategic group Which of the following are guidelines that should be followed in creating a strategic group map? The sizes of the map circles should be proportional to the combined sales of firms in each strategic group. Creating multiple maps should be considered if there are more than two good competitive variables. The variables used as map axes should always be quantitative and continuous. The two variables selected for the map axes should not be highly correlated. The sizes of the map circles should be proportional to the combined sales of firms in each strategic group. Creating multiple maps should be considered if there are more than two good competitive variables. The two variables selected for the map axes should not be highly correlated. When a company has good information about the strategic direction of key competitors, the company can do which of the following? prepare defensive countermoves exploit opportunities provided by the competitors' actions craft an effective strategy of its own file preemptive lawsuits against competitors prepare defensive countermoves exploit opportunities provided by the competitors' actions craft an effective strategy of its own The strategy elements that most affect industry members' ability to prosper in the marketplace are known as key success factors. driving forces. dominant economic characteristics. the "five forces." key success factors. Which of the following statements are true about evaluating an industry for profit potential? A particular industry will be equally attractive or unattractive to all industry participants. Some potential entrants to an industry may consider it attractive while others do not. A company needs to analyze prevailing driving forces to determine if they will affect profitability favorably. An industry's growth potential is an important factor in its profitability. Some potential entrants to an industry may consider it attractive while others do not. A company needs to analyze prevailing driving forces to determine if they will affect profitability favorably. An industry's growth potential is an important factor in its profitability. The best technique for identifying the market position of industry rivals is a five-forces analysis. ... Which of the following are guidelines that should be followed in creating strategic group map?Which of the following are guidelines that should be followed in creating a strategic group map? The sizes of the map circles should be proportional to the combined sales of firms in each strategic group. Creating multiple maps should be considered if there are more than two good competitive variables.
Which of the following conditions determines whether buyer bargaining power in an industry is weak?Which of the following conditions determines whether buyer bargaining power in an industry is WEAK? There is a surge in buyer demand that creates a "seller's market."
Which type of group consists of a set of industry competitors that have similar characteristics to each other but differ in important ways from the members of other groups?A strategic group consists of a set of industry competitors that have similar characteristics to each other but differ in important ways from the members of other groups. Members of a firm's strategic group are usually its closest rivals.
When setting objectives a company should include performance targets for which of the following?When setting objectives, a company should include performance targets for which of the following? Developing a vision, mission, and set of values.
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Which of the following statements are true about evaluating an industry for profit potential?
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