CAOT 31 Lecture Notes - Lecture 25: Pest Analysis, Oligopoly, Monopolistic Competition
30 Oct 2020
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External analysis: industry structure, competitive forces, and strategic. General/macro environment: managers have little direct influence (currency exchange rates) task environment: managers have some influence (composition of strategic groups, industry structure) Pestel model: framework categorizing and analyzing important set of external forces (political, economic, sociocultural, technological, ecological, legal) that might affect a firm. These (interdependent) forces are embedded in global environment and can create opportunities and threats. Scan, monitor, evaluate external environment to identify oppurtunies/threats. Open markets + international trade -> global forces. New firms enter, intensified competition, innovation, higher value at lower prices for consumers (except finance industry: act resulted in financial crisis) Non-market strategies (lobbying) to influence and shape general environment. Amount savers are paid for use of their money and amount borrowers pay for using. High -> hard credit -> consumer demand slows down -> difficult for firms to borrow low -> cheap credit -> direct effect on consumer demand -> economic growth money to support operations.
