QUIZ 2 tips
● General Environment
Dimensions in the broader society that influence an industry and the firms within it
● Industry Environment-more direct effect on strategy
Set of factors that directly influences a firm and its competitive actions and response
● Competitor Environment
Focuses on each company against which a firm directly competes

●The General Environment is grouped into seven environmental segments: page 38
[1] Demographic – population, age, geographic distribution
[2] Economic - Inflation and interest rates
[3] Political/Legal – org & gov trying to influence each other AntiTrust & Tax laws, deregulation policies
[4] Sociocultural – greatest impact, workforce diversity, quality of worklife
[5] Technological-Product innovations
[6] Global-trading between countries, critical global markets
[7] Physical-energy consumption
●To successfully deal with uncertainty in the external environment and achieve strategic competitiveness, firms must be aware of and understand these segments.

EXTERNAL ENVIRONMENTAL ANALYSIS-more important for technology based companies
• Firms engage in external environmental analysis to better understand and cope with their environments.
• This analysis has four parts: -
• Scanning (cookies on websites) –studying all segments in the general enviroment
• monitoring, -events and trends
• forecasting-projections of future trends
• assessing.-determine timing and significance of trends

INDUSTRY ENVIRONMENT ANALYSIS
An industry’s profit potential is a function of the five forces of competition: ■ The threats posed by new entrants ■ The power of suppliers ■ The power of buyers ■ Product substitutes- competition from different industries that replace your product ■ The intensity of rivalry among competitors –rivals compete in same industry
Strategies are chosen, in part, because of the