MGCR 423 Lecture Notes - Lecture 2: Competitor Analysis, Product Differentiation, Switching Barriers
The External environment
Opportunities, Threats, Industry Competition and Competitor Analysis
General Environment: composed of dimensions in the broader society that influence an
industry and the firms within it:
❖ Demographic
❖ Economic
❖ Political/legal
❖ Sociocultural
❖ Technological
❖ Global
❖ Physical
Firms cannot directly control the general environment’s segments. They want to recognize
trends in each segment and then predict each trend’s effect on it
Scanning: the study of all segments in the general environment
Monitoring: detecting meaning through observations of environmental changes and trends
Forecasting: predicting based on monitored changes and trends
Assessing: determining timing + importance of environmental changes and trends
Industry Environment: the set of factors that directly influences a firm and its competitive
actions and responses → PORTER’S 5 FORCES
❖ Threat of new entrants
❖ Power of suppliers
❖ Power of buyers
❖ Threat of product substitutes
❖ Intensity of rivalry
Document Summary
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