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Strategic Management Concepts Competitiveness and Globalization 12th Edition Hitt Solutions Manual
Strategic Management Concepts Competitiveness and Globalization 12th Edition Hitt Solutions Manual
Strategic Management Concepts Competitiveness and Globalization 12th Edition Hitt Solutions Manual
Chapter 2
The External Environment: Opportunities,
Threats, Industry Competition, and Competitor Analysis
LEARNING OBJECTIVES
1. Explain the importance of analyzing and understanding the firm’s external environment.
2. Define and describe the general environment and the industry environment.
3. Discuss the four parts of the external environmental analysis process.
4. Name and describe the general environment’s seven segments.
5. Identify the five competitive forces and explain how they determine an industry’s profit
potential.
6. Define strategic groups and describe their influence on firms.
7. Describe what firms need to know about their competitors and different methods (including
ethical standards) used to collect intelligence about them.
CHAPTER OUTLINE
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.
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Chapter 2: The External Environment
LECTURE NOTES
Chapter Introduction: This chapter can be introduced with a general statement regarding
the importance of understanding what is happening outside of the firm itself and how
what is happening can affect the firm’s ability to achieve strategic competitiveness and
earn above-average returns. This importance is illustrated by the Opening Case, which
discusses the impact events in the external environment can have on a firm’s
performance.
OPENING CASE
Are There Cracks in the Golden Arches?
The opening case illustrates how McDonald’s can use information from the general
environment to develop plans for the future and how sociocultural factors affect their
decision making. Over the years, McDonald’s was a leader not only in market share but also
with the introduction of new menu items to the fast food market. Recently, McDonald’s
problems have revolved around increased competition and changing consumer tastes.
Teaching Note
The opening case lays out how McDonald’s uses information from the general
environment to make strategic decisions. The case provides a vehicle for discussing
how the environment affects both corporate-level strategy and business-level strategy.
As an opening discussion question, ask students to identify and discuss examples of
how McDonald’s might base its strategies on information from the general
environment that is NOT included in the text. Ask students how changing attitudes
about food have affected McDonald’s sales and how they are responding.
Teaching Note
Given that the external environment will continue to change - and that change may be
unpredictable in terms of timing and strength - a firm’s management is challenged to
be aware of, understand the implications of, and identify patterns represented in these
changes by taking actions to improve the firm’s competitive position, to improve
operational efficiency, and to be effective global competitors.
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.
2-3
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