BSM 600 Chapter Notes - Chapter 2: Pest Analysis, Pharmaceutical Industry, Sunk Costs

• School: Ryerson University
• Department: Business Essentials
• Course: BSM 600
• Professor: Tim Pervin

Document Summary

Foundations of strategy: chapter 2 - industry analysis. Glossary: business environment, pestel analysis, consumer surplus, producer surplus, sunk costs, barrier to entry, scale economies, absolute cost advantages, barriers to exit, fixed costs, variable costs, substitutability, hypercompetition, key success factors. It"s imperative to understand the competitive environment to create a successful strategy. There are systematic approaches to do this (evaluate industry"s profit and identify sources of competitive advantage) Significant topics: pestel analysis - remote drivers of influence, porter"s 5 forces, key. Business strategy is a quest for profit. So the first step to creating a strategy, is finding the sources of profit in the external environment (ie. industry analysis or even situational analysis) Business environment - all the external influences that affect decisions and performance of a business. To study this business env we look to pestel analysis or influences within the macro and micro environment. Pestel analysis includes these basic forces: political, economic, social, technological,