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External Analysis (Macro-environment (Industry environment (The Firm…

- - - - Toyota
        
        Quality
        
        Continuous improvement
  - - - Consist of multiple nested layers
    - - 2) Substitute products or services
        
        3) Complementors
    - - ex.McDonald's
        
        Entire restaurant industry
        
        Fast food industry
  - - - Technological
      - Ecological
      - Socio-cultural
      - Legal
      - Economic
      - Political
      - Clearly not exhaustive
- - - - Explain and predict industry profitability
- - - - Affect advertising, pricing, capital investment, bargaining
  - - - Barriers to price rivalry
        
        3) Low / fixed storage costs
        
        4) Demand growth
        
        2) Product differentiation
        
        5) Limited over-capacity
        
        1) Industry concentrations
        
        Highly industry concentrations lead to less price rivalry
        
        6) Low exit barriers
    - - 3) Capital requirement
        
        Further compounded by high risk
      - 4) Product differentiation
        
        Customers are loyal to existing products and brand
        
        Intangible product attributes and emotional attachment
      - 2) Learning curve economic
        
        Costs decline with total cumulative production over time
      - 5) Access to distribution channels
        
        Shelf space may be limited
        
        Logistics distribution may be difficult
      - 1) Scale and scope economics
        
        Scale
        
        Costs decline with scale of production
        
        Scope
        
        Costs decline when multiple products are made
      - 6) Other advantages
    - - Define with focal industry