External Environmental

Analysis
2nd Meeting
Analyzing External Environment
• General Environment (PESTEL)
• Focus on the future
• Industry Environment (Five Forces Competition Model)
• 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
The Five Forces of Competition Model
 Interpreting Industry Analyses
Low entry barriers

Suppliers and buyers

have strong positions
Unattractive
Strong threats from Industry
substitute products

Intense rivalry
Low profit potential
among competitors
 High entry barriers

Suppliers and buyers

have weak positions
Attractive
Few threats from Industry
substitute products

Moderate rivalry
among competitors High profit potential
Competitor Analysis
Quiz by SLIDO