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| surveillance of a firm's external environment to predict environmental changes & detect changes already underway |
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| alerts the firm to critical trends before changes have developed a discernible patter before competitors recognize them |
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| a firm's analysis of the external environment that tracks evolution of environmental trends, sequences of events, or streams of activities (listen, pay attention, follow trends) |
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| a firm's activities of collecting and interpreting data on competitors, defining and understanding the industry, and identifying competitors' strengths and weaknesses (spying,ethics) |
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| Environmental forecasting |
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| the development of plausible projection about direction, scope, speed and intensity of environmental change. (predictions, based on fact) |
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| an in-depth approach to environmental forecasting that involves experts' detailed assessments of societal trends, economics, politics, technology, or other dimensions of external environment |
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| Identify strategies that will create a firm specific business model that will best align an organization's resources and capabilities to the requirements of the environment in which the firm operates (proactive NOT reactive) |
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Strengths (build)- qualities that enable a firm to achieve its mission, allow for continued or sustained success
Weaknesses (work around)- qualities that prevent a firm from achieving its mission, many can be controlled |
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Opportunities (prioritize&optimize)- something in the environment from which the firm may benefit
Threats (protect)- conditions in the environment jeopardize the firm's business model, compounded if they relate to the firm's weaknesses |
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| factors external to an industry, and usually beyond a firm's control, that affect a firm's strategy |
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| most easily understood & quantifiable elements |
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| > Aging population, rising or declining affluence, changes ethnic composition, geographic distribution of pop, greater disparities in income levels |
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| the values, beliefs, and lifestyles of a society |
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| More women in the workforce, dual-income families, > in temporary workers, greater concern for health diets & physical fitness, greater interest in the environment, postponement of having children |
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| how the society creates and exercises power including rules, laws, and taxation policies |
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| > Tort reform, Americans w/ Disabilities Act (ADA), Repeal of Glass-Steagall Act, Sarbanes-Oxley Act |
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| innovation and state of knowledge in industrial arts, engineering, applied sciences, and pure science; and their interactions with society |
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| > Genetic engineering, emergence of internet tech., wireless com. |
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| characteristics of the economy, including national income & monetary conditions |
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| > Increasing global trade, exchange rates, NAFTA, EU, ASEAN, WTO |
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factors that pertain to an industry & affect a firm’s strategies
(Competitors, customer, & supplies) |
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| most commonly analytical tool for examining the competitive environment (static analysis) |
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1. The threat of new entrants
2. The bargaining power of buyers
3. The bargaining power of suppliers
4. The threat of substitute products & services
5. The intensity of rivalry among competitors |
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| cluster of firms that share similar strategies (Analytical tool) |
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