MAN 301 Lecture 03: External & Internal Analysis

Vocabulary flashcards covering external strategic analysis (macro-environment, industry life cycles, Porter's Five Forces, Value Net, strategic groups) and internal analysis (RBV, dynamic capabilities, VRIO, value chains, alliances, networks) from MAN 301 Lecture 03.

Market-based view (MBV)

An external strategic analysis perspective focusing on industry conditions, competition, growth, opportunities, and threats.

Resource-based view (RBV)

An internal strategic analysis perspective centered on evaluating company resources, capabilities, competencies, and activities.

Macro environment

Broad external environmental forces that operate beyond the direct control of an individual company.

Immediate environment

The external competitive environment consisting of suppliers, buyers, rivals, new entrants, and substitutes.

Extended PEST

A framework encompassing seven macro-environment components: political / legal / regulatory, economic, social, technological, natural environment, global forces, and demographics.

Development & introduction stage

The initial phase of the industry life cycle characterized by high investment needs and little to no financial return.

Growth stage (Industry life cycle)

The industry life-cycle stage marked by economies of scale, falling unit costs, and intensifying competition.

Maturity stage (Industry life cycle)

The industry life-cycle stage characterized by market saturation, increasing price pressure, and product proliferation.

Decline stage (Industry life cycle)

The industry life-cycle stage characterized by falling sales, where production and distribution efficiency become increasingly important.

Porter's Five Forces

An analytical model assessing industry profitability potential through rivalry among existing firms, threat of entry, threat of substitutes, supplier power, and buyer power.

Value Net

A framework extending Porter's model by introducing complementors alongside customers, suppliers, and competitors to analyze cooperation and joint value creation.

Complementors

Producers of complementary products (such as smartphones with network operators) that enable joint value creation but can also pose potential future threats.

Scenario analysis

A tool for evaluating alternative future industry states—such as best, worst, and trend scenarios—to formulate corresponding strategic responses.

Strategic group

A cluster of competitors within an industry that share similar positioning and competitive approaches along chosen strategic dimensions.

Mobility barriers

Factors and hurdles that protect strategic groups from competition and make movement between different groups difficult.

Resources

Owned or controlled productive inputs and assets of a firm, categorized into tangible assets (physical, financial, organizational) and intangible assets (brands, culture, patents, skills).

Capabilities

Intangible skills, routines, and processes used by a firm to orchestrate and deploy its resources.

Core competencies

Distinctive, well-performed organizational strengths that are central to a company's competitive strategy.

Activities (Internal analysis)

Value-creating processes within an enterprise that carry out the transformation of inputs into outputs.

Resource heterogeneity

The Resource-Based View assumption that competing firms possess different combinations and bundles of resources and capabilities.

Resource immobility

The Resource-Based View assumption that valuable resources (such as specialized know-how) are difficult to transfer or trade between firms.

Dynamic capabilities

A firm's ability to renew, adapt, integrate, and reconfigure its resources and skills to maintain strategic fit with a changing environment.

VRIO framework

A model assessing resources and capabilities against four criteria: Valuable, Rare, Inimitable, and Organized, all of which are required to support a sustainable competitive advantage.

Primary activities

Value chain activities directly involved in physical creation, delivery, and support of a product: inbound logistics, operations, outbound logistics, sales and marketing, and service.

Support activities

Value chain activities that underpin primary operations, including R&D / technology / procurement / systems, HR management, and infrastructure / administration.

Internal linkages

Relationships and interdependencies among a single firm's internal value chain activities.

Vertical linkages

Connections linking a firm's value chain activities to those of external suppliers and distribution channels within the broader value network.

Benchmarking

The process of comparing value-chain activities against stronger competitors to identify areas for operational and strategic improvement.

Weighted competitive strength assessment

A scoring technique multiplying industry-specific key success factor importance weights (summing to $1.00$) by firm strength ratings on a scale from $1$ (very weak) to $10$ (very strong).

Relational view

A strategic perspective that treats interfirm partnerships and alliances as key sources of competitive advantage and relational rents.

Strategic alliance

A voluntary cooperative arrangement between firms to share knowledge, resources, and capabilities across equity, joint venture, or non-equity modes.

Strategic network

An interorganizational structure consisting of multiple organizations (nodes) connected by relationships (ties) to achieve joint goals beyond an individual firm's reach.

Centrality

A network structural position referring to an actor that is highly connected or occupies a central role among network nodes.

Knowledge broker

An organization or node that bridges a structural hole between otherwise disconnected actors or clusters within a strategic network.

Isolate

An organization within a strategic network context that possesses few or no relational ties to other members.

Closure

A network property characterized by dense, cohesive connections and relationships within a specific cluster of actors.