Term
| Why is developing forecasts important? |
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Definition
| Because: ignoring trends leads to missed opportunities and lost market, managers need to be ahead of the curve, given assumptions about an industry need to be constantly questioned, and strategies need to evolve with the times. |
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Term
| What is environmental scanning, environmental monitoring, and competitive intelligence? |
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Definition
| Respectively, the first alerts organizations to trends before an actual pattern occurs, predicting changes and becoming aware of whats going on; the second involves closer scrutiny and study, and tries to answer the question, "how are trends changing the landscape?"; the last avoids surprises by approximating competitor's moves, reducing response time. |
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Term
| What is environmental forecasting and why is it important in terms of uncertainty? |
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Definition
| It predicts change in the future and its important because underestimating uncertainty leaves a firm open to threats while overestimating uncertainty leads to misinformed bets. |
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Term
| What are scenario analysis and planning? |
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Definition
| Experts' discussions on economics, psychology, sociology, demographics. Planning considers also how trends could be upset by events and resulting outcomes possible. |
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Term
| What is a SWOT and what are the 3 benefits? |
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Definition
| Build on strengths, remedy weaknesses, take advantage of opportunities, protect from threats. Managers consider internal/external simultaneously; act proactively rather than reactively; simple! |
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Term
| What are 6 categories of general environment and what does productivity mean? |
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Definition
| demographic, sociocultural, political/legal, technological, economic, and global. Better productivity means more work accomplished by less people. |
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Term
| What is Porters 5 forces model? |
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Definition
It det?ermines profit potential in an industry.
1. Threat of new entrants
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Threat of substitutes
5. Competitive rivalry/intensity |
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Term
| What are the effects of the internet on Porter's 5 forces? |
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Definition
1. Threat of new entrants is increased because the internet lowers entry barriers.
2. Power of buyers is increased for end users and decreased for buyer channel intermediaries.
3. Power of suppliers is increased overall because they can reach end users more directly.
4. Threat of substitutes is increased.
5. Competitive rivalry is intensified because the internet commoditizes products that would have been unique. |
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Term
| What are strategic groups and why are they valuable? |
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Definition
They are clusters of firms sharing similar strategies; and they are valuable because they :
1.Help identify mobility barriers that protect the group from attacks.
2. Help identify groups whose competitive position may be marginal or tenuous.
3. Help chart future directions of firms' strategies.
4. Helpful in seeing implications of each industry trend for the strategic group as a whole. |
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