What Are The Major Features Of An Industry And The Forces That Affect Industry Profitability?

Submitted By 昊-杨
Words: 524
Pages: 3
Open Document
Strategy and Competition
COMM 401

External Environment
Jan.15, 2015

Today’s Agenda
• Why is it important to understand the external environment for strategy and firm performance?
• What are the critical elements of external
Environment: the general, industry, competitor environment • What are the major features of an industry and the forces that affect industry profitability?

The external Environment of the Organization
General/Macro
Environment
Industry
Environment
Strategic Group
(Competitor
Environment)
The
Organization

General/Macro Environment
Segment

Related factors

Demographic Segment

Population size, Age structure,
Ethnic mix, Geographical distribution
Income distribution, Immigration

Socio-cultural Segment

A society’s attitudes and values, Women in the workforce, Workforce diversity,
Environmental Concerns, Work life quality attitudes

Political/Legal Segment

Competition Laws, Labor Laws, Taxation laws , Education philosophies & policy,
De-/ Regulation philosophy

Economic Segment

The general economic health of the country, The impact of purchasing power, the unemployment rate, and the interest rates, currency exchange rate

Technological Segment

Product innovations, Process innovations, Focus of private & governmentsupported R&D expenditures, New communication technologies

Global Segment

Global integration versus local differentiation
New markets as well as existing markets

Physical Environment
Segment

Ecological, social, and economic factors that can affect the physical environment and business practices

Rise and Fall of Krispy Kreme Donut

Industry Analysis
• Firms will have normal profits (enough profit to cover the cost of capital) if an industry has perfect competition.
– Numerous sellers and buyers (No monopolies)
– Perfect information
– Relatively homogeneous products
– No barriers to entry or exit

• What if not?

What is an industry
• An industry is a group of firms that produce or sell the same product in a market.
• Complication of defining industry boundaries

A model of industry structure:
Porter’s 5 Forces Model
Threat of
Threat of
New
New
Entrants
Entrants
Bargaining
Power of
Suppliers

Rivalry Among Competing
Firms in Industry

Threat of
Substitute
Products

Industry Value Chain

Bargaining
Power of
Buyers

Threat of New Entrants
• The higher the entry barriers, the higher the returns for existing firms in the industry
• Sources of the entry barriers:

Bargaining Power of Suppliers
• Suppliers exert power in the industry by threatening
to
Show More

Related Documents: What Are The Major Features Of An Industry And The Forces That Affect Industry Profitability?

Lecture 2 Essay

Definition of Law a set of rules established by government, which are enforced Sources of Law Constitutions Division of power (S91+S92) 91 federal jurisdiction 92 provincial jurisdiction if not included in either list, defaults to federal, known as residual value if both laws the same direction, comply to stricter If conflicting, federal>provincial treaties are also part of constitutional law, Canada cannot pass law against the treaty, laws the contradict that has no effect Charter Fundamental…

Words 405 - Pages 2

Essay on 1 2 Lecture

Jan 30-9:45 AM Jan 30-9:51 AM Cell differentiation in olfactory receptors Each cell expresses only one "smell" gene-- why we can detect so many kinds of smells Stem Cells Life begins when a sperm fertilizes an egg zygote Cell division occurs- 2, 4, 8, 16... In these early stages of cell division and embryonic development, large amounts of undifferentiated tissue is formed- all other tissues stem from these These cells begin to differentiate as the embryo develops. catalog.flatworldknowledge…

Words 554 - Pages 3

Lecture 18 2 Essay

Part I Project Initiation Project Management A Managerial Approach By J.R. Meredith and S.J. Mantel, Jr. © 2012 John Wiley & Sons, Inc. Project Management Strategic Management and Project Selection Chapter 2 Project Management A Managerial Approach By J.R. Meredith and S.J. Mantel, Jr. © 2012 John Wiley & Sons, Inc. Problems With Multiple Projects Three basic problems for organization while managing multiple projects: • Delays in one project delays others • • common resource needs or technological…

Words 1857 - Pages 8

Lecture Notes 2 Essay

1951 bachelor of divinity degree.MLK was highly educated, |||| FDR’s 1934 speech that it was called the “state of the union” address, Article #2 of the constitution says that “from time to time” the president must give congress “information” on the state of the union and give recommendations. President recommended expanded paid sick leave for employees. 2 years of free community college. The presidents promised to veto any legislation concerning: Health Insurance/Obama care, new rules on wall street…

Words 765 - Pages 4

FINS1613 Lecture 2 Essay example

Corporate Finance Lecture 2. Introduction to Financial Mathematics Learning Objectives • Calculate future values • Calculate present values • Use the FV and/or PV formulate to know how to solve for time or interest rate • Know how to compute the PV and FV of both an ordinary annuity and an annuity due • Know how to calculate the PV of a perpetuity • Know how to adjust for compounding periods 2 Time Lines • The first step in time value analysis is to understand a time line. Time 0 1 2 3 4 5 Today…

Words 4442 - Pages 18

Essay on Unit 9 Lecture 2

+ Unit 9: Lecture 2 Heterogeneous Equilibria ICE Charts + Changing Kc Like H, when we manipulate a chemical reaction, the value of the equilibrium constant changes. Three possible changes: 1.Running Reaction in Reverse 2.Multiplying 3.Adding Reaction by Common Factor Equilibriums +Option 1: Running Reactions in Reverse  If we have the equilibrium N2O ⇌ 2NO2  Then the value of the equilibrium constant is: 2 [NO2 ] Kc  1  0.212 [N2O4 ]  If we reverse the equilibrium, then it…

Words 1248 - Pages 5

Lecture 2 slides Student Essay

Association, Auditor’s Reports , Special Reports Overview, Independence Class 2 Agenda • Association • Audit reports • Assurance and related services (special reports) overview • Independence 2 Association (HB Section 5020) CPA associates himself with information when he/she: ◦ Performs services in respect of that information ◦ Consents to the use of his/her name in connection with that information Read up on: How does CPA discharge professional responsibilities? What CPA must ensure…

Words 1350 - Pages 6

Essay on Design Animation Lecture 2

Week 2 DESIGN ANIMATION CUFANM503A DESIGN ANIMATION AND DIGITAL VISUAL EFFECTS Cambridge International College Design Animation - Term 1 2011 Last Week  Design Principles used by Disney Squash and Stretch Anticipation Staging Straight ahead action and pose to pose Follow through and overlapping action Slow in and slow out Arcs Secondary action Timing Exaggeration Solid drawing Appeal Cambridge International College Design Animation - Term 1 2011 Storyboards Cambridge International…

Words 393 - Pages 2

US15 Lecture Notes Session 2 Essay

ADV 225 Writing for Public Relations: Session 2 Andrew Corner, M.A., APR Instructor 330 Communication Arts and Sciences E: cornera@msu.edu P: 517-896-8995 (cell) Deadlines   Several assignments are due along with this session. Review the current due dates in the Calendar and News sections of your Course Home on Desire2Learn. Reminders     Some lecture material was recorded in prior semesters. I have done my best to update for the current semester, HOWEVER ... Some out of date references…

Words 4182 - Pages 17

Essay on Unit 1 Lecture 2 Isotopes and Atomic Mass 2

Isotopes and Average Atomic Mass Unit 1 Lecture 2 Subatomic Particles Charge (e)* Proton +1 Electron -1 Mass (amu) 1 0.0005 (relatively 0) *Note: The charges are being compared Neutron relative to0each other, they do have 1 specific values (C/g), see Thomson slides Honors… • A neutral atom has an equal amount of protons and electrons • Protons and neutrons have equal masses (they are actually a little bit different, but this is several decimal places out and using a very expensive measuring…

Words 996 - Pages 4