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Hierarchy of External Influences

Hierarchy of External Influences. Social Economic Technical Global Political/Legal. Remote Environment. Competitive Environment. Firm. Five Forces Competitor Intelligence Industry Structure Strategic Groups Political/Legal. Social Influencers (Stakeholders).

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Hierarchy of External Influences

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  1. Hierarchy of External Influences • Social • Economic • Technical • Global • Political/Legal Remote Environment Competitive Environment Firm • Five Forces • Competitor Intelligence • Industry Structure • Strategic Groups • Political/Legal

  2. Social Influencers (Stakeholders) • Shareholders • Government • Financial Community • Host Community • Ecological Environment • Society in General Remote Environment Competitive Environment Firm • Rivals • Customers • Suppliers • Employees • Managers • Board Members

  3. Social Influence on International Strategy Acme GmbH WOS in Germany Acme Inc. HQ in U.S. Cervesa SA JV in Mexico Gang Ped LTD Contract Supplier in Thailand

  4. Who are they? How can they be classified? How do they exert influence? What is level of threat [opportunity] ? Stakeholder Analysis

  5. Establish communication Establish mutual satisfaction of needs via negotiation Motivating stakeholders Financial Political Cultural Persuasion Stakeholder Management

  6. Financial goals vs. “caving in” Business-level strategy: Revise goals? How to adjust value chain activities? Can social influence be a good thing? Corporate-level strategy: Portfolio management? Transformation? Social Influence on Strategy

  7. Stakeholders and Influence Other Co.’s owning stock Managers Board Stockholders Ownership Employees Customers Suppliers Competitors JV Partners Creditors IRS Competitors Suppliers Customers Type of Stake in Firm Operations Economic Dependence Activist groups Government Media EPA OSHA SEC Social Regulatory Economic Political Influence on Firm Behavior

  8. Environmental Scanning Grid

  9. External Influences on Five Forces (+) or (-) influence... Threat of New Entrants Threat of New Entrants More Competitive Bargaining Power of Suppliers Rivalry Among Competing Firms in Industry Bargaining Power of Buyers Threat of Substitute Products Less Competitive

  10. Social Influences on the Value Chain Firm Infrastructure Human Resource Management MARGIN Technological Development Procurement Service Inbound Logistics Marketing & Sales Outbound Logistics Operations

  11. Social Influence on Business-level Strategy Source of Competitive Advantage Cost Uniqueness Cost Leadership Broad Target Market Different. Breadth of Competitive Scope Focused Different. Focused Low Cost Narrow Target Market

  12. Social Responsibility and Corp. Strategy

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