? Compared with the general environment, the industry environment has a more direct effect
on the firm’s strategic actions. The five forces model of competition includes the threat of entry, the power of suppliers, the power of buyers, product substitutes, and the intensity of rivalry among competitors. By studying these forces, the firm finds a position in an industry where it can influence the forces in its favor or where it can buffer itself from the power of the forces in order to achieve strategic competitiveness and earn above-average returns.
? Industries are populated with different strategic groups. A strategic group is a collection of
firms following similar strategies along similar dimensions. Competitive rivalry is greater within a strategic group than between strategic groups.
? Competitor analysis informs the firm about the future objectives, current strategies,
assumptions, and capabilities of the companies with which it competes directly. A thorough analysis examines complementors that sustain a competitor’s strategy and major networks or alliances in which competitors participate. When analyzing competitors, the firm should also identify and carefully monitor major actions taken by firms with performance below the industry norm.
? Different techniques are used to create competitor intelligence: the set of data, information,
and knowledge that allows the firm to better understand its competitors and thereby predict their likely strategic and tactical actions. Firms should use only legal and ethical practices to gather intelligence. The Internet enhances firms’ capabilities to gather insights about competitors and their strategic intentions.
作业
1. Why is it important for a firm to study and understand the external environment?
2. What are the differences between the general environment and the industry environment?
Why are these differences important?
3. What is the external environmental analysis process (four steps)? What does the firm
want to learn when using this process?
4. What are the seven segments of the general environment? Explain the differences
among them.
5. How do the five forces of competition in an industry affect its profit potential?
Explain.
6. What is a strategic group? Of what value is knowledge of the firm’s strategic group in
formulating that firm’s strategy?
7. What is the importance of collecting and interpreting data and information about
competitors? What practices should a firm use to gather competitor intelligence and why?