Chapter 3- Analyzing the External Environment Discussion Questions: Question Number Answer: 1) To identify opportunities and threats is an important reason why firms study their external environment- general, industry and competitor. Opportunities are conditions in a firm’s external environment that enables the firm to use its core competencies to achieve its vision. Threats are conditions in a firm’s external environments that prevent the firm from successfully using its core competencies. Firms
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PALLAVI KARANDE BATCH 84 ROLL NUMBER 26 ITM SION SMBA CASE STUDY FOR ITC ENTERING INTO TELECOM SECTOR ITC: ITC has a diversified presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and AgriExports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal
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THE EXTERNAL AND INTERNAL ENVIRONMENTS If managers in the airline industry are going to run their organizations efficiently, they have to understand the external environment confronting them, anticipate how changes in the environment might affect the profitability of their airlines, and take appropriate actions. These actions might include reducing capacity as demand declines, purchasing more fuel-efficient jets, avoiding price wars with low-cost airlines if possible, and reducing labor costs. At
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2. The competitive structure of the brewing industry using Porter’s five forces model. a. Risk of entry by potential competitors. New micro brewing companies have low barriers of entry. New micro brewing companies do not rely heavily on brand loyalty or economies of scale. Mass market brewers our faced with higher barriers to entry because of brand loyalty of customers and absolute cost advantages. b. Intensity of rivalry of previously established companies new customers are always entering
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vantage//~‘L~ FIRST-MOVER ADVANTAGES Marvin B. Lieberman David B. Montgomery’ October 1987 Research Paper No. 969 1The authors are, respectively, Assistant Professor of Business Policy, and Robert A. Magowan Professor of Marketing, at the Stanford Business School. We thank Piet Vanden Abeele, Rajiv Lal, Mark Satterthwaite and Birger Wernerfelt for helpfiul discussions on earlier drafts. The Strategic Management Program at Stanford Business School provided financial support. / ~‘N
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Differentiation 6 Capital Requirements 2 Switching Costs 4 Access to Distribution Channels 2 Cost Disadvantage Independent to Size 5 Government Policy The Global Paper and Paper Product Industry are considered to have a high barrier to entry. It is “rather costly, due to the high capital outlay and fixed costs involved in setting up and running production plants.” Economies of scale provide a competitive advantage for larger companies as they are able to increase production in
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THE EXTERNAL ENVIRONMENT: OPPORTUNITIES, THREATS, INDUSTRY COMPETITION AND COMPETITOR ANALYSIS. “It is not the strongest species that survive, nor the most intelligent, but the one most responsive to change.” Charles Darwin Today, two types of strategies exist: proactive/reactive. Anticipation, change, adaptability is necessary nowadays so the proactive strategy (ex: Coca Cola). External environment conditions create both threats and opportunities for firms that have major implications for their
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PART I. COMPETITIVE ADVANTAGE PROJECT FOCUS: (DO NOT INCLUDE THIS SECTION IN YOUR PROJECT – THESE ARE JUST THE DETAILS OF THE PROJECT) • Perform a detailed Porter's Five Forces analysis for The Broadway Cafe. • Be sure to highlight entry barriers, switching costs, and substitute products. • Determine which of Porter's Three Generic strategies you will use as you rebuild The Broadway Cafe for the 21st century. A paragraph describing what is and why you are using Porter’s Five Forces
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aluminum suppliers; Alcoa, Alcan and Reynolds Metal. Aluminum is classic oligopoly dominated by Alcan and Alcoa. Reynolds may benefit from R&D synergies. Also there is a threat of forward integration. =>High l Threat of new entrants It seems that barriers to entry are low. Product differentiation and switching cost is not that high. Capital costs for three-piece can product lines are relatively low but capital costs for a two-piece can line is $20-25 million. =>moderate l Substitute There are
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the current members of the industry ← Includes imports from firms seeking economies of scale ← If it is easy to enter the industry this will tend to force industry prices down ← Threat depends on the height of barriers to entry ← Examples of entry barriers: ← Economies of scale - entrant must either enter on a large scale or accept a cost disadvantage ← Differentiation - brand identification and customer loyalty has to be overcome ← Capital requirements - how much
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