BU481 Lecture Notes - Lecture 2: Environmentally Friendly, The Short North, Pest Analysis
Document Summary
Lecture 3 strategy and the external environment. Industry analysis objectives: understand where value is being derived in industry, understand drivers of profitability, understand why some industries are more attractive than others, understand macro-economic factors, understand key factors of success. Everything that adds value to the chain for that consumer. Each activity has its own cost, profit, revenue margin. Limited number of activities in the value system: too complicated technologically, functionally, anti-trust reasons firms are not allowed to control everything (i. e. raw material) Why the value system and value chain matter. Consumer has a willingness to pay for all the steps in the chain. For suppliers, buyers, distributors: help you devise a plan of action that may include a positioning it can take to provide best ability in the industry, help to investing and orchestrating your resources. 5 forces: threat of entrants, buyers, suppliers, substitutes, rivalry. Collective strength of forces determines ultimate profit potential of an industry.
