Beruflich Dokumente
Kultur Dokumente
McGraw-Hill/Irwin
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LO 3-1 Apply the PESTEL model to organize and assess the impact of external forces on the firm. LO 3-2 Apply the structure-conduct-performance (SCP) model to explain the effect of industry structure on firm profitability. LO 3-3 Apply the five forces model to understand the profit potential of the firms industry. LO 3-4 Describe the strategic role of complements in creating positivesum co-opetition. LO 3-5 Understand the role of industry dynamics and industry convergence in shaping the firms external environment. LO 3-6 Apply the strategic group model to reveal performance differences between clusters of firms in the same industry.
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ChapterCase 3
BYD in China is entering the car market Batteries to carsbypassing many hurdles
Electric cars have fewer parts BYD has the battery technology Selling in China, Africa, & S. America
Hybrid Car Video
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Which PESTEL factors will be most important for electric vehicles in the 21st century?
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Political Variables
Governments influence behavior of firms
Subsidies for renewable energy High-mileage automobiles Investments in R&D
Campaigns by candidates for office Taxation at local, state, federal levels Political pressure on firms
Negotiations on pharmaceutical prices Modify home loans
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Billions of $ moved offshore Names of 52,000 U.S. citizens sought Eventually over 4,000 names were released
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Economic Variables
Growth Rates
GDP Trends
Interest Rates Employment Levels Inflation Rates Currency & Money Supply Disposable & Discretionary Income
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Socio-Cultural Variables
Lifestyle Changes Career Expectations Demographics
Life expectancies Aging population Rising affluence Changes in ethnic composition More women in workforce globally
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Technological Variables
Productivity Improvements Focus of Technological Efforts Industrial Spending for R&D Patent Protection Digital Communications
E-tailers
Mobile devices
Biotechnology
Genetic engineering
Nanotechnology
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Ecological Variables
Global Warming Sustainable Economic Growth Carbon Footprint Fossil Fuel Consumption Pollution of air & water Toxins in food and products
Legal Variables
Antitrust Regulations Tort Reform Environmental Protection Laws
CARB zero-emission regulation passed in 1990.
Hiring and Promotion Laws Americans with Disabilities Act of 1990 Sarbanes-Oxley Act of 2002
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PESTEL Framework
Political
Govt pressures Subsidies & incentives Differences in countries, states,
Technological
Innovation Diffusion Research & development
Economic
Growth rates Interest rates Employment levels Currency exchange
Environmental
Global warming Sustainability Pollution
Sociocultural
Norms, culture, values
Demographics Lifestyle changes
Legal
Court system
Legislation Hiring laws, ADA, SBOX
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LO 3-1 Apply the PESTEL model to organize and assess the impact of external forces on the firm. LO 3-2 Apply the structure-conduct-performance (SCP) model to explain the effect of industry structure on firm profitability. LO 3-3 Apply the five forces model to understand the profit potential of the firms industry. LO 3-4 Describe the strategic role of complements in creating positivesum co-opetition. LO 3-5 Understand the role of industry dynamics and industry convergence in shaping the firms external environment. LO 3-6 Apply the strategic group model to reveal performance differences between clusters of firms in the same industry.
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Monopolistic Competition
Many firms differentiated products Ex. Computer hardware, organic foods
Oligopoly
Few large firms interdependent Ex. Express mail, soft drinks
Monopoly
One supplier often government approved Ex. Utilities for electricity, gas, and water
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LO 3-1 Apply the PESTEL model to organize and assess the impact of external forces on the firm. LO 3-2 Apply the structure-conduct-performance (SCP) model to explain the effect of industry structure on firm profitability. LO 3-3 Apply the five forces model to understand the profit potential of the firms industry.
LO 3-4 Describe the strategic role of complements in creating positivesum co-opetition. LO 3-5 Understand the role of industry dynamics and industry convergence in shaping the firms external environment. LO 3-6 Apply the strategic group model to reveal performance differences between clusters of firms in the same industry.
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Threat of Entry Power of Suppliers Power of Buyers Threat of Substitutes Rivalry Among Existing Competitors
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BYD entrance??
Electric vehicles level the auto field BYD has strength working multinational firms
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BYD suppliers??
They make the batteries Chevy, Ford are buying
from suppliers!
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BYD Buyers??
Product is differentiated Switching costs from
gas to electric
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BYD Substitutes??
Electric vs. gas cars
Bus, train, bikes
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Five Forces in Airlines vs. Soft Drinks Airlines low profits for decades
Entry threats small airlines popping up Suppliers few & large: aircraft, engines, unions Buyers no switching costs, perfect info now Subs drive for shorter flights
Five Forces in Airlines vs. Soft Drinks Soft Drinks high profits for decades
Entry threats strong brands (Coke & Pepsi) Suppliers mostly commodities Buyers bottlers lock into long-term contracts Subs other drinks (water, coffee, etc.)
Rivalry advertizing-based
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LO 3-1 Apply the PESTEL model to organize and assess the impact of external forces on the firm. LO 3-2 Apply the structure-conduct-performance (SCP) model to explain the effect of industry structure on firm profitability. LO 3-3 Apply the five forces model to understand the profit potential of the firms industry. LO 3-4 Describe the strategic role of complements in creating positive-sum co-opetition. LO 3-5 Understand the role of industry dynamics and industry convergence in shaping the firms external environment. LO 3-6 Apply the strategic group model to reveal performance differences between clusters of firms in the same industry.
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Complementor: If customers value your product more when combined with another firms product or service.
Michelin tires for Ford & GM
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Microsofts Business
Use the Porters 5 forces or the 6 force industry attractiveness model to consider the impacts of this technology shift on the textbook publishing industry. 1. How should managers in the textbook industry respond to these developments? 2. Is it likely to raise or lower the industry-level profits?
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CHANGES OVER TIME: INDUSTRY DYNAMICS Industry Growth Rates Highly Variable (Exh. 3.6)
Metals & Internet at the top Retailers and food at the bottom
Industry Convergence
Formerly unrelated industries collide Media newspapers, TV, movies
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LO 3-1 Apply the PESTEL model to organize and assess the impact of external forces on the firm. LO 3-2 Apply the structure-conduct-performance (SCP) model to explain the effect of industry structure on firm profitability. LO 3-3 Apply the five forces model to understand the profit potential of the firms industry.
LO 3-4 Describe the strategic role of complements in creating positivesum co-opetition. LO 3-5 Understand the role of industry dynamics and industry convergence in shaping the firms external environment. LO 3-6 Apply the strategic group model to reveal performance differences between clusters of firms in the same industry.
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Strategic Groups
Mapping Groups
Auto industry example
Ford, Toyota gas BYD, Tesla electric
GM,
Mobility Barriers
Firms would try to
move to the profit spots BUT Specific factors that separate groups Airlines
International routes Regulations: airport slots
Rivalry is strongest in
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Which PESTEL factors are most salient for the electric vehicle industry? How is your home country auto industry structured? Use Exhibit 3.5 for traditional auto industry.
What changes for electric auto industry?
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Take-Away Concepts
LO 3-1 Apply the PESTEL model for external forces. Macro environment has a wide range of domestic & global forces. The political environment describes the influence government bodies can have on firms. The economic environment is mainly affected by five factors: growth rates, interest rates, levels of employment, price stability (inflation and deflation), and currency exchange rates. Sociocultural factors capture a societys cultures, norms, and values. Technological factors capture the application of knowledge to create new processes and products. Ecological factors concern a firms regard for environmental issues such as the natural environment, global warming, and sustainable economic growth. Legal environment factors capture the official outcomes of the political processes that manifest themselves in laws, mandates, regulations, and court decisions.
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Rivalry within the same group is more intense than between groups.
Mobility barriers restrict movement between groups.
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Complement Complementor Entry barriers Exit barriers Five forces model Industry Industry convergence
Mobility barriers PESTEL model SCP (structure-conductperformance) model Strategic group Strategic group model
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