The document discusses analyzing a firm's external environment including the general, industry, and competitor environments. It involves continuously scanning, monitoring, and forecasting trends and changes in the sociocultural, economic, political/legal, technological, and other factors. This helps assess opportunities and threats from factors like new entrants, supplier and buyer power, and substitute products. Competitor analysis examines objectives, strategies, assumptions, and capabilities to predict competitor responses. Together, external analysis and strategic intent and mission guide business strategy formulation and implementation.

1. The External Environment: Opportunities and Threats Industry Competition and Competitor Analysis

2. Sociocultural Economic Demographic Political/Legal Global Technological The External Environment Environment Industry Environment Threat of new entrants Power of suppliers Power of buyers Product substitutes Intensity of rivalry General General Competitor Environment Environment Environment General

3. Analysis of the External Environments General environment Focused on the future growth prospects based on political stability and other factors Industry environment Focused on factors and conditions influencing a firm’s profitability within an industry Competitor environment Focused on predicting the dynamics of competitors’ actions, responses and intentions

4. Opportunities and Threats Opportunity A condition in the general environment that if exploited, helps a company achieve strategic competitiveness Threat A condition in the general environment that may hinder a company’s efforts to achieve strategic competitiveness

6. Monitoring: Detecting meaning through ongoing observations of environmental changes and trends

7. Forecasting: Developing projections of anticipated outcomes based on monitored changes and trends

9. 7 Strategic IntentInternally focused, it is the leveraging of firms resources, capabilities, and core competencies to establish the firms goals in the competitive environment. 0 Together, Strategic Intent and Strategic Mission yield the insights required to formulate and implement strategies. Strategic MissionExternally focused, it is a statement of a firms unique purpose and scope of its operations in product offered and market catered to.

11. Shifts in product and service preference

12. Concerns about environment

13. Attitudes about quality of worklife

14. Women in the workplace

16. Interest rates

17. Trade deficits or surpluses

18. Budget deficits or surpluses

19. Personal savings rate

20. Business savings rates

22. Taxation laws

23. Deregulation philosophies

24. Labor training laws

26. Product innovations

27. Applications of knowledge

28. Focus of private and government-supported R&D expenditures

30. Critical global markets

31. Newly industrialize countries

33. Population size

34. Age structure

35. Geographic distribution

36. Ethnic mix

38. Power of suppliers

39. Power of buyers

40. Product substitutes

42. Five Forces Model of Competition Five Forces of Competition Rivalry Among Competing Firms Threat of New Entrants Threat of New Entrants 2. Bargaining Power of Suppliers 3. Bargaining Power of Buyers 4. Threat of Substitute Products Threat of Substitute Products Bargaining Power of Suppliers 5. Rivalry among Competing Firms Bargaining Power of Buyers

44. Product differentiation

45. Capital requirements

46. Switching costs

47. Access to distribution channels

48. Cost disadvantages independent of scale

49. Government policy

51. satisfactory substitute products are not available to industry firms

52. industry firms are not a significant customer for the supplier group

53. suppliers’ goods are critical to buyers’ marketplace success

54. effectiveness of suppliers’ products has created high switching costs

56. the sales of the product being purchased account for a significant portion of the seller’s annual revenues

57. they could easily switch to another product

59. substitute product’s price is lower

61. experience slow industry growth

62. have high fixed costs or high storage costs

63. lack differentiation or low switching costs

64. experience high strategic stakes

66. fixed costs of exit such as labor agreements

67. strategic interrelationships (relationships of mutual dependence between one business and other parts of a company’s operation, such as shared facilities and access to financial markets)

68. emotional barriers (career concerns, loyalty to employees, etc.)

71. what the competitor is doing and can do as revealed by its current strategy

72. What the competitor believes about itself and the industry, as shown by its assumptions

74. Where will the emphasis be placed in the future?

77. Are we operating under a status quo?

80. Where do we hold an advantage over our competitors?