Internal Analysis of Firms Analysis of the Firm Role of a firm: * Marketing approach: Firm should give customers what they want Nonsense * Exchange is about comprise from both the firm and the consumer * If not -> no exchange * If not -> changement of partner However, the firm can also have technical limits and not being able to reach consumer expectation. That’s why exchanges will be based on the nature of the firm. (short term) The Marketing concept vision
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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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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 evaluate trends
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1) How does environment analysis at the domestic level differ from global analysis? Although there are many parallels between domestic and global analysis, there also some difference between them. The important of these differences mainly depend on the complexity of analysis required. In terms of the remote environment, a global entity need stimulate the asset multiple, ever-changing political, economic, legal, social environments and so on. At the domestic level, firms usually conduct an
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MANAGEMENT GROUP PROJECT GUIDELINES: * For your group project you first have to choose a corporation, which is either a real firm or a hypothetical firm. * Secondly, you have to choose (real or hypothetical) a general environment, industry/market environment, and the rival firms, with which your firm is competing with in the industry. Those are the environments your firm finds itself and operates. * Choosing a corporation means you give all the relevant descriptions, characteristics, and
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profit-maximizing firm offers a risky environment if π1>π0 (when the profits the firm can earn when it chooses to be a risky firm exceed the profits the firm can earn when it chooses to be a safe firm) and a profit-maximizing firm offers a safe environment if π1<π0 (when the profits the firm can earn when it chooses to be a safe firm exceed the profits the firm can earn when it chooses to be a risky firm). Offering a safe working environment: | Offering a risky working environment: | π1<π0↔pα1E*-
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strategy into action takes place in the firm’s business model, which details the firm’s competitive tactics and initiatives” (Rothaermel, p. 11). Basically, a strategy will explain how a firm will make money but the difference between a strategy and the business model is the business model explains how the firm intends to make the money AND puts it into action; the strategy just gives the theory. Business models put strategy into action. A strategy focuses on the company in relation to its competition
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The Strategic Planning Process In the 1970's, many large firms adopted a formalized top-down strategic planning model. Under this model, strategic planning became a deliberate process in which top executives periodically would formulate the firm's strategy, then communicate it down the organization for implementation. The following is a flowchart model of this process: The Strategic Planning Process Mission | V Objectives | V Situation Analysis | V Strategy Formulation | V Implementation
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Analyzing the External Environment of the Firm Chapter 2 1) Because of to minimize or eliminate threats and exploit opportunities, so managers should analyze the external environment 2) This involves a continuous process of environmental scanning and monitoring as well as obtaining competitive intelligence on present and potential rivals. These activities provide valuable inputs for developing forecasts. In addition, many firms use scenario planning to anticipate and respond to volatile
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External Environment TRUE or FALSE QUESTIONS The external environment facing business stays relatively constant over time. False Firms can directly control the elements of the seven segments of the general environment. True To successfully deal with today’s external environment and to achieve strategic competitiveness, firms must be aware and fully understand the different segments of that environment. True The industry environment directly influences the firm and its
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