Chapter 3 - Evaluating a company’s external environment. After studying this chapter you will be able to: To gain command of the basic concepts and analytical tools widely used to diagnose a company’s industry and competitive conditions; To become adept in recognizing the factors that cause competition in an industry to be fierce, more or less normal, or relatively weak; To learn how to determine whether an industry’s outlook presents a company with sufficiently attractive opportunities for growth and profitability. | Evaluating a Company’s External Environment chapter 3 PowerPoint Presentation by Charlie Cook © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Student Version 1 The First Test of a Winning Strategy: “How well does the strategy fit the company’s situation?” Two facets of the company’s situation The industry and competitive environments in which the company operates—its external environment The company’s resources and organizational capabilities—its internal environment 2 Evaluating the Strategically Relevant Components of a Company’s Macro-Environment Relevant Factors Play a significant role in shaping management’s decisions regarding the company’s long-term direction, objectives, strategy, and business model. Are on the immediate inner ring industry and competitive environment of the company—competitive pressures, the actions of rivals firms, buyer behavior, supplier-related considerations, and so on. Assessing the Company’s Industry and Competitive Environment Do the dominant economic characteristics of the industry offer sellers opportunities for growth and attractive profits? What kinds of competitive forces are industry members facing, and how strong is each force? What forces are driving industry change, and what impact will these changes have on competitive intensity and industry profitability? Assessing the Company’s Industry and Competitive Environment (cont’d) What market positions do industry rivals occupy—who is strongly positioned and who is not? What strategic moves are rivals likely to make next? What are the key factors of competitive success? Does the industry outlook offer good prospects for profitability? Question 1: What Are the Industry’s Dominant Economic Characteristics? Market size and growth rate Number of rivals . | Evaluating a Company’s External Environment chapter 3 PowerPoint Presentation by Charlie Cook © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Student Version 1 The First Test of a Winning Strategy: “How well does the strategy fit the company’s situation?” Two facets of the company’s situation The industry and competitive environments in which the company operates—its external environment The company’s resources and organizational capabilities—its internal environment 2 Evaluating the Strategically Relevant Components of a Company’s Macro-Environment Relevant Factors Play a significant role in shaping management’s decisions regarding the company’s long-term direction, objectives, strategy, and business model. Are on the immediate inner ring industry and .
