BU111 Final: BU111 FINAL.docx
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BU111 Full Course Notes
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Identifies key variables to be considered in strategic analysis and the critical relationships between them. Tells you what opportunities in the environment the business is pursuing. Determines resources, organizational capabilities, management preferences required. Any variable can either drive or constrain strategy. External analysis: process of scanning and evaluating the external environment, how managers determine opportunities (positive external trends or changes) and threats (negative external trends or changes. How to do an external analysis: general environment. Pest model considers political, environmental, social/demographic, and technological factor. Porter"s five forces - analyzes five important sources of competitive pressure and intensity; predicts profitability of industry. Look for data, statistics, trends, forecasts, expert opinions, etc. Trade agreements or conditions: political system, political stability. Government can create incentives, constraints, or support/bail out when needed. Affects uncertainty, risk, and constraints/costs faced by firm. Economic growth aggregate output, gdp, and standard of living. Trade balance importing vs. exporting: national debt government borrowin.