Strategic management and Business Policy Exam 1 Chapter 2

Current Competitive Landscape

-Hypercompetitive (increasingly intense rivalry between firms)

Technology changes

-The speed with which new
technologies become
available has increased, as
has the size of technological
shifts.
– Accessing and using
knowledge is critical to

NETWORK
INTERLOCKS AND
INFORMATION
FLOWS

Higher risks of failure:
– Investments required to
compete on a global scale
are enormous.
– Multiple stakeholders are
affected by the firm’s
activities.

systemic risks

-2008 Financial Crisis

-2020 Covid

-1.2 million US deaths (17%)

-6.9 million worldwide deaths

compared to Spanish Flu (1918)

-675,000 US Deaths (1.3%)

-50 million worldwide deaths

-deadliest since black plague

Globalization

-Domestic-only enterprises have increased international ties

-International firms are exposed to multiple environments

Ex: Alibaba Group

General Environment

Dimensions in the broader society that influence industries and firms within in

Political/legal

Economic

Sociocultural

Technological

(PEST)

FIRMS ARE LIKE
PEOPLE, THEY ARE
DIVERSE.

– Small and large firms.
– Domestic and international firms.
– Private and public firms.
– Single product and multi-product firms.

THE OBJECTIVES
OF COMPETITOR
ANALYSIS

Identify and compare against rivals’ attributes.
 Future objectives vs. rivals’ future objectives.
 Current strategy vs. rivals’ current strategies.
 Assumptions vs. rivals’ assumptions.
 Strengths/weakness vs. rivals’
strengths/weaknesses.

EXTERNAL ANALYSIS:
PORTER’S FIVE-
FORCES

Analysis of Industry Structure-Conduct-Performance
• 1st Goal: Assess industries with greatest potential competitive advantage
• Competitive advantage
– an advantage over rivals (either cost or differentiation).

INTERPRETING THE 5 INDUSTRY
FORCES (I.E., PORTER’S 5 FORCES)

Strategic Groups

-Firms utilizing similar strategies, perhaps to appeal to similar customers bases
-Competition within strategic groups is often greater than is competition among firms in different strategic groups

Identifying strategic groups can cimplify competitor analysis

Strategic Dimensions (examples)-bing vs google (technological leadership)

-rolls royce vs fiat (product quality)

Pricing policies

pay now vs pay later

distribution channels

lags and inventory

-ex: Publix, 7 Eleven, Just in Time

Customer service

carnival vs Disney cruise

Summary

Be clever to think of things others have not