Essay Quiz Notes
Inputs – goods and services organizations take in and use to create products or services
Outputs – products and services organizations create.
External environment – all relevant forces outside a firm’s boundaries, such as competitors, customers, the government and the economy
Competitive environment – immediate environment surrounding a firm; includes suppliers, customers, rivals and the like
Macroenvironment – includes governments, economic conditions and other fundamental factors that generally affect all organizations.
All organizations operate in a macroenvironment which comprise of the following:
Laws and regulations * The government can …show more content…
* When organizations compete for the same customers and try to win market share at the others’ expense, all must react to and anticipate their competitors’ actions. * Competitors may include (1) small domestic firms, (2) strong regional competitors, (3) big new domestic companies exploring new markets, (4) overseas firms, and (5) newer entries. * After identifying competitors, we have to analyze how they compete
New entrants * If many factors prevent new companies from entering an industry, the threat to established firms is less serious. * Barriers to entry – conditions that prevent new companies from entering an industry * Some major barriers to entry are government policy, capital requirements, brand identification, cost disadvantages and distribution channels. * Substitutes and complements * Technological advances and economic efficiencies are among the ways that firms can develop substitutes for existing products. * As with substitutes, a company needs to watch for new complements that can change the competitive landscape. * Suppliers * Suppliers provide the resources needed for production and those resources may come in the form of people, raw materials, information and financial capital