SEVI 3013 FINAL EXAM UARK 2023 with complete
solution
General Environment
Composed of dimensions in the broader society that influence an industry and the firms
within it
Dimensions of the General Environment
1. Demographic
2. Economic
3. Political/legal
4. Sociocultural
5. Technological
6. Global
7. Sustainable physical environment
Demographic Segment
-Population size
-Age structure
-Geographic distribution
-Ethnic mix
-Income distribution
Economic Segment
-Inflation rates
-Interest rates
-Trade/budget deficits or surpluses
-Personal savings rate
-Gross domestic product
Political/legal Segment
-Antitrust laws
-Taxation laws
-Deregulation philosophies
-Labor training laws
-Educational philosophies and policies
Sociocultural Segment
-Women in the workforce
-Workforce diversity
-Attitudes about the quality of work life
-Shifts in work and career preferences
Technological Segment
-Product innovations
-Applications of knowledge
-Focus of private and government-supported research and development expenditures
-New communication technologies
Global Segment
-Important political events
-Critical global markets
, -Newly industrialized countries
-Different cultural and institutional attributes
Sustainable physical environment Segment
-Energy consumption
-Practices used to develop energy sources
-Renewable energy efforts
-Minimizing a firm's environmental footprint
-Reacting to natural or man-made disasters
External Environmental Analysis
To cope with often ambiguous and incomplete environmental data and to increase
understanding of the general environment
The Four Components of the External Environmental Analysis
1. Scanning
2. Monitoring
3. Forecasting
4. Assessing
Scanning
Identifying early signals of envrionmnetal changes and trends
Monitoring
Detecting meaning through ongoing observations of environmental changes and trends
Forecasting
Developing projections of anticipated outcomes based on monitored changes and
trends
Assessing
Determining the timing and importance of environmental changes and trends for firms'
strategies and their management
The Five Forces of Competition Model
1. Threat of New Entrants
2. Bargaining Power of Suppliers
3. Bargaining Power of Buyers
4. Threat of Substitute Products
5. Rivalry Among Competing Firms
Threat of New Entrants
Identifying new entrants is important because they can threaten the market share of
existing competitors
The likelihood that firms will enter an industry is a function of two factors: barriers to
entry and the retaliation expected from current industry participants
Barriers to Entry
-Economies of Scale
-Product Differentiation
-Capital Requirements
-Switching Costs
-Knowledge Requirements
Bargaining Power of Suppliers
solution
General Environment
Composed of dimensions in the broader society that influence an industry and the firms
within it
Dimensions of the General Environment
1. Demographic
2. Economic
3. Political/legal
4. Sociocultural
5. Technological
6. Global
7. Sustainable physical environment
Demographic Segment
-Population size
-Age structure
-Geographic distribution
-Ethnic mix
-Income distribution
Economic Segment
-Inflation rates
-Interest rates
-Trade/budget deficits or surpluses
-Personal savings rate
-Gross domestic product
Political/legal Segment
-Antitrust laws
-Taxation laws
-Deregulation philosophies
-Labor training laws
-Educational philosophies and policies
Sociocultural Segment
-Women in the workforce
-Workforce diversity
-Attitudes about the quality of work life
-Shifts in work and career preferences
Technological Segment
-Product innovations
-Applications of knowledge
-Focus of private and government-supported research and development expenditures
-New communication technologies
Global Segment
-Important political events
-Critical global markets
, -Newly industrialized countries
-Different cultural and institutional attributes
Sustainable physical environment Segment
-Energy consumption
-Practices used to develop energy sources
-Renewable energy efforts
-Minimizing a firm's environmental footprint
-Reacting to natural or man-made disasters
External Environmental Analysis
To cope with often ambiguous and incomplete environmental data and to increase
understanding of the general environment
The Four Components of the External Environmental Analysis
1. Scanning
2. Monitoring
3. Forecasting
4. Assessing
Scanning
Identifying early signals of envrionmnetal changes and trends
Monitoring
Detecting meaning through ongoing observations of environmental changes and trends
Forecasting
Developing projections of anticipated outcomes based on monitored changes and
trends
Assessing
Determining the timing and importance of environmental changes and trends for firms'
strategies and their management
The Five Forces of Competition Model
1. Threat of New Entrants
2. Bargaining Power of Suppliers
3. Bargaining Power of Buyers
4. Threat of Substitute Products
5. Rivalry Among Competing Firms
Threat of New Entrants
Identifying new entrants is important because they can threaten the market share of
existing competitors
The likelihood that firms will enter an industry is a function of two factors: barriers to
entry and the retaliation expected from current industry participants
Barriers to Entry
-Economies of Scale
-Product Differentiation
-Capital Requirements
-Switching Costs
-Knowledge Requirements
Bargaining Power of Suppliers
