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Ch 3 -1
BBA Assessment Instrument Review:
Chapter 3 The External Assessment

Strategic Management Concepts
13
th
Edition
Fred David




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Ch 3 -2
Chapter Outline
Key External Forces
-Non-Competitive Forces
+Economic
+Social, Cultural, Demographic, Environmental
+Political, Governmental, Legal
+Technological
-Competitive Forces
External Assessment
-External Factor Evaluation (EFE) Matrix
-Competitive Profile Matrix (CPM)
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Ch 3 -3
Key External Forces
Economic forces
Social, cultural, demographic and
environmental forces
Political, governmental and legal forces
Technological forces
Competitive forces
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Ch 3 -4
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Ch 3 -5
Economic Forces
GDP trends
Level of disposable income
Consumption patterns
Government deficits
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Ch 3 -6
Economic Forces
Inflation rates
Interest rates
Availability of credit
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Ch 3 -7
Industry Analysis: The External Factor
Evaluation (EFE) Matrix
Competitive Political Cultural
Technological Environmental Social
Governmental Demographic Economic
Summarize and Evaluate
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Ch 3 -8
Competitive Forces
Competition on virtually all industries can be
described as intense.
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Ch 3 -9
The Five-Forces Model of Competition
Potential development
of substitute products
Rivalry among
competing firms
Bargaining power
of suppliers
Potential entry of new
competitors
Bargaining power
of consumers
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Ch 3 -10
Industry Analysis: Competitive Profile
Matrix (CPM)
Identifies firms major competitors and
their strengths and weaknesses in
relation to a sample firms strategic
positions