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External Analysis

External Analysis. Macro-Environment Industry’s Dominant Economic Features Driving Forces (Porter’s Five Forces) Industry Driving Forces Market Rival Position Key Success Factors Industry Attractiveness. Macro-Environment. Technical:

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External Analysis

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  1. External Analysis • Macro-Environment • Industry’s Dominant Economic Features • Driving Forces (Porter’s Five Forces) • Industry Driving Forces • Market Rival Position • Key Success Factors • Industry Attractiveness

  2. Macro-Environment • Technical: • Pressure to continuously develop innovative products and services (Opportunity and Threat) • Economic: • Current recession (Threat) • Increased Interest Rates (Threat)

  3. Macro-Environment • Social/Cultural: • Increased Online Time (Opportunity) • E-Business (Opportunity) • Necessity of the Internet (Opportunity) • Political/Legal: • Regulatory Environments (Opportunity and Threat) • Protecting Intellectual Property Rights (Threat)

  4. Dominant Economic Features • Market Size • Market Growth Rate • Degree of Vertical Integration • Technology & Innovation • Product Characteristics • Scale Economies • Learning & Experience Curves

  5. Porter’s 5 Forces • Rivalry Among Competitors • Strong: intense technological competition • Barriers to Entry • Moderate to Strong: required capital needed to compete • Substitute Products • Weak: numerous Internet providers • Strong: alternative forms of entertainment • Power of buyers • Moderate: low switching costs • Power of Suppliers • Weak : Size of AOLTW gives them bargaining power

  6. Industry Driving Forces • Internet & New E-Commerce Opportunities • Increasing Globalization • Technological and Marketing Innovations

  7. Broad Medium Slim Low Medium High Market Rival Positions AOL Prodigy MSN AT&T Juno Netzero EarthLink Product Line Local Service Providers Price Range

  8. Key Success Factors • Strive for Technological Superiority • Constantly Produce Innovative Ideas • Offer Wide Scope of Services • Strategic Partnerships

  9. Industry Outlook • Attractive to Firms Currently in the Industry • Continues to generate revenue & show profit • However, volatility of the industry, as well as rate of technological innovation leave future uncertain • Not attractive to Potential Entrants

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