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Ch3 Evaluating Company External Environment
Terms in this set (12)
encompasses the broad environmental context in which a company's industry is situated
focuses on 6 principals of strategic significance in the macro-environment: political, economic, social, technological, environmental, legal/regulatory conditions
These factors include political policies and processes, including the extent to which a government intervenes in the economy. They include such matters as tax policy, fiscal policy, tariffs, the political climate, and the strength of institutions such as the federal banking system.
include the general economic climate and specific factors such as interest rates, exchange rates, the inflation rate, and the unemployment rate, the rate of economic growth, trade deficits or surpluses, savings rates, and per capita domestic product. also include conditions in the markets for stocks and bonds
include the societal values, attitudes, cultural factors, and lifestyles that impact businesses, as well as demographic factors such as the population size, growth rate and age distribution. Sociocultural forces vary by locale and change over time. An example is the trend toward healthier lifestyles, which can shift spending toward exercise equipment and health clubs and away from alcohol and snack foods
factors include the pace of technological change and technical developments that have the potential for wide-ranging effects on society, such as genetic engineering and nanotechnology. They include institutions involved in creating new knowledge and controlling the use of technology, such as R&D consortia, university-sponsored technology incubators, patent and copyright laws, and government control over the Internet.
includes ecological and environmental forces such as weather, climate, climate change, and associated factors like water shortages. These factors can directly impact industries such as insurance, farming, energy production, and tourism. They may have an indirect but substantial effect on other industries such as transportation and utilities.
These factors include the regulations and laws with which companies must comply such as consumer laws, labor laws, antitrust laws, and occupational health and safety regulation.
The Five competitive forces
rival sellers,potential new entrants, producers of substitute products, Supplier bargaining power, Customer bargaining power
Rivalry increases when ______ demand is growing slowly or declining
are the major underlying causes of change in industry and competitive conditions ; the most powerful of change agents
driving force analysis
(1) identify what the driving forces are (2) asses whether drivers are to make industry more/less attractive (3) determine what strategy changes are needed to prepare for the impact of the driving forces