Strategic Management Chp 4

Front 1

MACROENVIRONMENT

Back 1

Includes all relevant factors and influences outside the company's boundaries.

Front 2

What are the five parts of the macroenvironment?

Back 2

1. Technology.
2. General economic conditions.
3. Legislation and regulations.
4. Population demographics.
5. Societal values and lifestyles.

Front 3

ECONOMIES OF SCALE

Back 3

When large-volume operations result in lower unit costs.

Front 4

LEARNING/EXPERIENCE CURVE EFFECTS

Back 4

Situations in which costs decline as a company gains knowledge and experience.

Front 5

What are the five competitive forces?

Back 5

1. Bargaining power of buyers.
2. Bargaining power of suppliers.
3. Threat of substitutes.
4. Threat of new entrants.
5. Rivalry.

Front 6

When do buyers gain bargaining power?

Back 6

If buyer's switching costs are low, if there are few buyers, if buyer demand is weak, if buyers are well-informed, if buyers pose a threat of integrating backward into supplier's business.

Front 7

What determines if the threat of substitutes is strong?

Back 7

Whether substitutes are available and attractively priced, whether buyers view substitute as comparable or better, whether switching costs are high or low.

Front 8

When do suppliers gain bargaining power?

Back 8

If the product is not a commodity, small number of suppliers, high switching costs, superior inputs, providing cost-saving equipment or services, etc.

Front 9

What are examples of barriers to entry?

Back 9

Economies of scale in existing companies, cost and resource disadvantages, strong brand preference and customer loyalty, high capital requirements, difficulties getting adequate space on retailers' shelves, restrictive regulatory policies, and tariffs and international trade restrictions.

Front 10

What is the strongest competitive force?

Back 10

Rivalry.

Front 11

DRIVING FORCES

Back 11

The major underlying causes of change in industry and competitive conditions.

Front 12

What are the three steps to driving forces analysis?

Back 12

Identifying what the driving forces are, assessing whether the drivers of change are making the industry more or less attractive, determine what strategy changes are necessary.

Front 13

What are the industry analysis steps?

Back 13

1. What are the industry's dominant economic conditions?
2. How strong are the competitive forces?
3. What are the driving forces and what impact will they have?
4. How are industry rivals positioned?
5. What strategic moves are rivals likely to make?
6. What are the industry key success factors?
7. Does the industry offer good prospects for attractive profits?

Front 14

STRATEGIC GROUP

Back 14

Consists of those industry members with similar competitive approaches and positions in the market.

Front 15

BLUE OCEAN STRATEGY

Back 15

Offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand.

Front 16

KEY SUCCESS FACTORS

Back 16

Those competitive factors that most affect industry members' ability to prosper in the marketplace.