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can have an impact on a firm's strategic choices
-technological change
-demographic trends
-cultural trends
-economic climate
-legal and political conditions
-specific international events |
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| creates both opportunity, as firms begin to explore how to use technology to create new products and services |
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| the distribution of individuals in a society in terms of age, sex, marital statues, income, ethnicity, and other personal attributes that determine buying power |
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| the overall health of the economic systems within which a firm operates |
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| when an activity in an economy is relatively low |
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| a severe recession that lasts for several years |
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| alternating pattern of prosperity followed by recession, followed by prosperity |
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| structure-conduct-performance |
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Definition
-number of competing firms
-homogeneity of products
-cost of entry and exit |
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| strategies firms pursue to gain competitive advantage |
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Term
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firm level: competitive advantage, parity, temporary or sustained competitive advantage
society: productive and allocative efficiency, level of employment, progress |
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Term
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Definition
1. entry
2. rivalry
3. buyers
4. substitutes
5. suppliers |
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| an individual, group, or organization outside a firm that seeks to reduce the level of that firm's performance |
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| firms that have either recently started operating in an industry or that threaten to begin operations in an industry |
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| when there are numbers of competing firms, the products being sold are homogeneous with respect to cost and product attributes and entry and exit costs are low |
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| monopolistically competitive industries |
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Definition
| there are large numbers of competing firms and low-cost entry into and exit from the industry |
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| characterized by a small number of competing firms, by homogeneous products, and by high entry and exit costs |
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| consist of only a single firm |
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| attributes of an industry's structure that increase the cost of entry |
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| exist in an industry when a firm's costs fall as a function of volume of production |
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| exist when a firm's costs rise as a function of its volume of production |
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| incumbent firms possess brand identification and customer loyalty that potential entrants do not |
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| gives incumbent firms important cost advantages over potential entrants |
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| the often-taken-for-granted knowledge and information that are needed to compete in an industry on a day-to-day basis |
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| the intensity of competition among a firm's direct competitors |
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| meet approximately the same customer needs, but do so in different ways. |
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| make a wide variety of raw materials, labor, and other critical assets available to firms |
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| forward vertical integration |
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Definition
| suppliers cease to be suppliers only and become suppliers and rivals |
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| purchase a firm's products or services |
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| backward vertical integration |
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Definition
| a buyer has a strong incentive to enter into its supplier's business to capture some of the economic profits being earned by the supplier |
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| industries in which a large number of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies |
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| new created or newly re-created industries formed by technological innovations, changes in demand, the emergence of new customer needs, and so forth |
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| advantages that come to firms that make important strategic and technological decisions early in the development of an industry |
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| technological leadership strategy |
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| firms that make early investments in particular technology |
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| strategically valuable assets |
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Definition
| resources required to successfully compete in an industry |
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| exist when customers make investments in order to use a firm's particular products or services |
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Definition
-slowing growth in the total industry demand
-the development of experienced repeat customers
-a slowdown in increases in production capacity
-a slowdown in the introduction of new products or services
-an increase in the amount of international competition
-an overall reduction in the profitability of firms in the industry |
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| activities a firm engages in to design, produce, and sell its products or services |
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| a firm's effort to refine and improve its current processes |
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| a firm establishes itself as this by having the largest market share in the industry |
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| a firm reduces its scope of operations and focuses on narrow segments of the declining market |
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| firms do not expect to remain in the industry in the long-term and engage in a long, systematic, phased withdrawal, extracting as much value as possible during the withdrawal period |
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| used to quickly extract a firm from a declining industry, used by firms without a competitive advantage |
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