PESTEL Analysis correct answers Political
Economic
Social
Technological
Environmental
Legal
-often present opportunities or threats
-example: changing nature of how individuals are becoming more and more comfortable with paying over the phone.
5 forces of competition model correct answer...
MGT 499(A+ Graded)
PESTEL Analysis correct answers Political
Economic
Social
Technological
Environmental
Legal
-often present opportunities or threats
-example: changing nature of how individuals are becoming more and more comfortable with paying over
the phone.
5 forces of competition model correct answers -is the industry structured where they are going to be
profitable?
-5 forces can impact this industry
1. Suppliers: Bargaining power of suppliers. If suppliers are profitable, they are going to have a big chunk
of profit.
2. Potential entrants: Threat of new entrants. Government regulations, barriers, access to supply channels,
etc.
3. Buyers: Bargaining power of buying. Some industries have very powerful buyers some do not.
4. Compliments: dont worry for this exam
5. substitutes: threat of substitute of products or services.
Know ways that firms can try to shift five forces in their favor (e.g., how can a firm attempt to decrease
the power of buyers? How can a firm attempt to decrease the power of suppliers?) correct answers -Once
you're in the industry and you understand how the power structure is is organized, then we went to, we
have to ask what are ways that firms can act to try to shift the forces in their favor.
- For example: Netflix. They understood the streaming movie rental industry.
-Again it's making the suppliers, perhaps more willing to enter favorable deals that favor netflix relative
to other business opportunities they have similarly netflix started instituting things like the personalized
recommendation system again.
-That creates potential switching costs for buyers buyers become perhaps more loyal to your brand the
idea of just leaving your brand becomes more than just some tips simple transaction you're stepping away
from a long personalized recommendation less and so as a result of buyers, perhaps.
, Internal Environment: What are different types of resources? correct answers (tangible/intangible;
financial/organizational/physical/technological/human/innovation/re-putation)
-Internal analysis tells us what a firm CAN do.
-External analysis tells us what a firm might CHOOSE to do. (identify opportunities and threats)
Know the resources: capabilities and distinctive competencies.
What are the four criteria of a sustainable competitive/distinctive advantage? correct answers Example:
Netflix
-IS it valuable? Is it rare? The extinct to which it could be copied? How long lived is the advantage?
What makes an effective mission statement? How did the mission statements of Starbucks and Johnson &
Johnson guide their strategies? correct answers Mission: The reasons for an organization's existence
-Who are we as a firm?
Starbucks:
What relevant current news events did we discuss in class? correct answers Netflix case
Putting it all together correct answers -find a purpose (mission statement)
-Effective first firms are scanning the external environments pastel industry factors to understand where
there are these were threats.
-Effective firms are developing utilizing internal resources to either position themselves superior to the
competitors in terms of five forces.
Value correct answers Value = satisfaction a product creates for customers and is measured by the price
that customers are willing to pay.
Firms with a competitive advantage offer VALUE that is superior to the value competitors provide
Selected Tangible & Intangible Resources correct answers Financial•Capacity to borrow, or generate
internal funds
Physical•Location, access to raw materials, equipment
Human resources•Knowledge, trust, managerial capabilities
Innovation•Ideas, scientific capabilities
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