Environmental Analysis. Purpose of General Environmental Analysis Gathering Information General Environment Competitive Environment Key Success Factors Competitive Changes During Industry Evolution Strategic Groups National Competitive Advantage Internal Environment. Topics.
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Managers need information in order to know and develop an understanding about what is happening in the external environment
Internal sources may also be a good source of data on customer needs, attitudes, and behavior. The organization's own records are the best source of data on current objectives, performance, and available resources.
Managers must understand the conditions of competition within their industry
(of firms in
Suppliers of Key Inputs
Fundamental question: how easy is it for another company to enter the industry?
Fundamental question: what other products or services could perform the same function as your products or services?
Fundamental questions: How badly does a buyer need your products or services?
Brand Competitors: market products that are similar in features and benefits to the same customers at similar prices
In many industries, there are certain actions or practices that a business must follow in order to compete in the industry.
Over time as an industry evolves, the nature and basis of competition changes
Embryonic: Know-how, educating customers, opening distribution channels
STEP 1: Identify competitive characteristics that differentiate firms in an industry from one another
STEP 2: Plot firms on a two-variable map using pairs of these differentiating characteristics
STEP 3: Assign firms that fall in about the same strategy space to same strategic group
STEP 4: Draw circles around each group, making circles proportional to size of group’s respective share of total industry salesProcedure for Constructing aStrategic Group Map
Publishers of games on CD-ROMs
Sony, Sega, Nintendo, several others
Types of Video Game Suppliers/Distribution Channels
Video game consoles
MSN Gaming Zone, Pogo.com, America Online, HEAT, Engage, Oceanline, TEN
(Console players cost $100-$300)
High (Use PC)
Overall Cost to Players of Video Games
Different management ideologies lead to different emphases within a company
Provide inputs and capabilities that help a company to improve its own products and capabilities
Availability of traditional factors of production—land, labor, capital, entrepreneurship—provide cost advantages to companies located in countries possessing those factors
Firms succeeding in global markets first succeeded in intense competition in home countries