Chapter 2: Environmental Scanning Vocabulary

A collection of vocabulary terms based on Chapter 2 content regarding environmental scanning, market structures, and competitive forces.

Power of suppliers

Ability of suppliers to control an organization by making their prices

Power of buyers

Ability of the buyers to drive the company's prices down

Rivalry of competitors

Ability of each company to counter the strategies offered by its strongest competitor

Threat of substitutes

The challenge offered by a company with similar features but at lower rates, and can substitute products or services of existing companies

Threat of new entrants

The challenge offered by new companies that offer same products or services through product quality, uniqueness, added features, competitive pricing, and the like

Competitive intelligence

The art of gathering, analyzing, and distributing vast information coined as intelligence about anything that would help in competing in the market

Strategic intelligence

Being able to understand the competitors’ future prospects and goals

Tactical intelligence

A small-scale intelligence and operational in the short run

Counter intelligence

Knowing how to defend company secrets

SWOT analysis

A basic straightforward model in environmental scanning which helps the company in identifying four key elements: strengths, weaknesses, opportunities and threats

Market concentration

The degree by which a small number of companies dominate the

Product differentiation

Refers to the degree by which a company is able to distinguish its product or service to other players in the market as valued by consumers

Entry barriers

Refer to the difficulties and challenges experienced by potential new entrants

Atomistic

Refers to the structure of the market where there are many small sellers with a low level of interaction to one another

Oligopolistic

Refers to the structure of the market where there are few large sellers with a high level of interaction to one another

Monopolistic

Refers to the market with a single player

Homogeneous products

Refer to the products that are highly similar or identical in features

Differentiated products

Products differentiated by design, quality, branding, etc.

Ease of entry

Refers to the point where there are no difficulties in entering the market

Moderately difficult

Refers to the point where there are barriers but not too difficult for sellers to monopolize the market specifically on pricing

Blockaded entry

Refers to the point where barriers are too high that potential players cannot enter and present companies monopolize the prices