Chapter 3: External Environment

Question 1

enviornment

Answer 1

the set of external conditions and forces that have the potential to influence the organization.

Question 2

general environment (macro)

Answer 2

+ overall trends and events in society, such as social trends, technological trends, demographics, and economic conditions
+ trends that affect all industries

Question 3

industry (competitive enviorment)

Answer 3

+ consists of organizations with which an organization interacts regularly, such as its suppliers, rivals, and customers
+ hose factors that affect the profitability of a specific industry

Question 4

opportunities

Answer 4

events and trends that create chances to improve an organization’s performance level

Question 5

threats

Answer 5

events and trends that may undermine an organization’s performance

Question 6

PESTEL analysis

Answer 6

the examination of political, economic, social, technological, environmental, and legal factors and their implications for an organization

Question 7

political segment

Answer 7

A portion of the general environment that involves governments

Question 8

economic segment

Answer 8

portion of the general environment that involves economic and financial conditions

Question 9

social segment

Answer 9

portion of the general environment that involves demographics and cultural trends

Question 10

technological segment

Answer 10

portion of the general environment that involves scientific advancements

Question 11

environmental segment

Answer 11

A portion of the general environment that involves the natural environment

Question 12

legal segment

Answer 12

portion of the general environment that involves law and courts

Question 13

intellectual property rights

Answer 13

the ability of an organization to protect intangible goods such as movies, software, and video games from piracy

Question 14

five forces analysis

Answer 14

a technique for understanding an industry by examining the interactions among competitors in an industry, potential new entrants to an industry, substitutes for the industry’s offerings, suppliers to the industry, and the industry’s buyers

Question 15

competitors

Answer 15

the set of companies that produce goods or services within an industry

Question 16

exit barriers

Answer 16

factors that make it difficult for a company to stop competing in an industry

Question 17

potential new entrants

Answer 17

Companies that do not currently compete in an industry but might join the industry in the future

Question 18

subtitutes

Answer 18

offerings from other industries that fulfill the same need or very similar need as an industry’s products or services

Question 19

suppliers

Answer 19

providers of inputs that compeitors in an industry need in order to create a good or service

Question 20

forward vertical integration

Answer 20

A strategy that involves a supplier entering the industry that it supplies inputs to

Question 21

buyers

Answer 21

Purchasers of the goods or services that the competitors in an industry create

Question 22

backwards vertical integration

Answer 22

A strategy that involves a buyer entering the industry that it purchases goods or services from

Question 23

strategic groups

Answer 23

Sets of companies that follow similar strategies

Question 24

mobility barriers

Answer 24

Factors that make it unlikely or illogical for a company to change strategic groups over time

Question 25

strengths and weaknesses are apart of the _____ environment.

Answer 25

internal

Question 26

threats and opportunities are apart of the ______ environment.

Answer 26

external

Question 27

the external environment can be organized into three levels:

Answer 27

+ general/ macro level + industry level + strategic group level

Question 28

strategic group level

Answer 28

hose factors that affect a sub-set of competitors in an industry

Question 29

general/ macro level factors are so ____ and ___ that frims have little ability to ____ ____.

Answer 29

big, broad, control them

Question 30

The factors of PESTEL make up the ______ environment

Answer 30

general/ macro

Question 31

The two basic questions that the Five Forces analysis addresses are _____ and ____.

Answer 31

+ how attractive is the industry? + how easy is it to be profitable?

Question 32

Industry lifecycle stages

Answer 32

+embryonic +growth +maturity +decline

Question 33

embryonic stage

Answer 33

When the industry is trying to figure out how to satisfy a customer need

Question 34

growth stage

Answer 34

When the industry gains acceptance by a large audience of customers

Question 35

maturity stage

Answer 35

When the industry has advanced about as far as it can go

Question 36

decline stage

Answer 36

When another industry begins satisfying the same customer need

Question 37

intra-group competition is more intense ______.

Answer 37

intense Intra-group = firms within a group (i.e. bugatti and ferarrie)

Question 38

Inter-group competition is ____ intense than intra-group competition.

Answer 38

less inter-group = firms within the same industry but not in the same group (i.e. ford and Bugatti)

Question 39

an attractive industry is one with ____ barriers to entry.

Answer 39

high

Question 40

the threat of new entrants is high when the expected retaliation from existing competitiors is ____.

Answer 40

low

Question 40

the threat of new entrants is ____ when the barriers to entry are ___

Answer 40

high; low