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IPPTChap 002
IPPTChap 002
the External
Environment
of the Firm:
Creating
Competitive
Advantages
chapter 2
Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education
Learning Objectives
2-2
Learning Objectives
2-3
Consider
If a company does not keep pace
with changes in the external
environment, it becomes difficult
to sustain competitive advantages
and deliver strong financial results.
2-5
2-6
Competitive Intelligence
2-7
Competitive intelligence
data on competitors
Interpret intelligence data
competitors moves
Decrease response time
Do competitive intelligence:
Environmental Forecasting
2-9
of environmental change?
Scope of environmental change?
Speed of environmental change?
Intensity of environmental change?
Question?
2-10
SWOT Analysis
2-11
environment
Activities among firms competing for the same
customers
SWOT Analysis
2-12
SWOT analysis
Strengths
Strong
Weaknesses
Lack
Opportunities
Consolidation
Threats
Economic
Demographic
Sociocultural
Political/Legal
Technological
Economic
Global
The Demographic
Segment
2-15
Aging population
Rising affluence
Changes in ethnic composition
Geographic distribution of population
Greater disparities in income levels
The Political/Legal
Segment
2-17
Tort reform
Americans with Disabilities Act (ADA)
Deregulation of utilities & other industries
Increases in minimum wages
Taxation at local, state, federal levels
Legislation on corporate governance reforms
Affordable Health Care Act
The Technological
Segment
2-18
Genetic engineering
Computer-aided design/computer-aided
manufacturing systems (CAD/CAM)
Research in synthetic & exotic materials
Pollution/global warming
Wireless communications
Nanotechnology
Interest rates
Unemployment
Consumer Price Index
Trends in GDP & net disposable income
Changes in stock market valuations
The Competitive
Environment
2-21
2-23
Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages independent of scale
Question?
2-24
2-25
2-26
2-27
2-28
2-29
2-30
2-32
2-33
2-34
2-35