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Chapter 3 The External Assessment - Coggle Diagram
Chapter 3
The External Assessment
External Strategic Management
How to make?
Develop a finite list of
threats that should be avoided.
Opportunities that could benefit a firm,
Gather competitive intelligence
Assimilate information
Evaluate
Performing External Audit
External Factors
Long-term Orientation
Applicable to Competing Firms
Hierarchical
Measurable
Social, Cultural, Demographic, and Natural Environmental Forces
Major Impact –
•Products
•Services
•Markets
•Customers
Industrial Organization (I/O) View
Industry factors
are more important than internal factors : :!!:
Performance
determined by
industry forces
Industry Properties
Economies of Scale
Barriers to Market Entry
Product Differentiation
The Economy
Level of Competitiveness
Economic Forces
GDP
Trends in the dollar’s value
Unemployment rates
Political, Governmental, and Legal Forces
Key opportunities & threats
Antitrust legislation
Tax rates
Lobbying activities
Patent laws
Governments
taking
equity
stakes in companies :red_flag:
Protectionist policies
Technological Forces
Essential
for nearly every
strategic decision
:!!:
Competitive Forces
Collection
& evaluation of data on competitors is essential
for
successful strategy formulation
Identify Rival Firms’
•Strengths
•Weaknesses
•Capabilities
•Opportunities
•Threats
•Objectives
•Strategies
7 characteristics competitive
Market share matters
Understanding what business you are in
Broke or not, fix it
Innovate or evaporate
Acquisition is essential to growth
People make a difference
No substitute for quality
What is?
A systematic and ethical process for gathering and analyzing information about the competition’s activities and general business trends to further a business’s own goals
Objectives of Competitive
Provide a general understanding of industry and competitors.
Identify areas where competitors are vulnerable and assess impact of actions on competitors
Identify potential moves that a competitor might make
Market Commonality :question:
The number and significance of markets that a firm competes in with rivals
Assumptions :: :question:
Estimates of future events based upon the best available information in the present