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EXTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT. INDUSTRY, MARKETS COMPETITION ECONOMY LEGAL, POLITICAL, SOCIAL. INDUSTRY, MARKETS. CUSTOMER/CONSUMER WHO WHERE (AREA, COUNTRY) WANTS, NEEDS BUYING BEHAVIOR BUYER POWER RELATIONSHIPS/ALLIANCES. INDUSTRY, MARKETS (CONT’D). MARKET SIZE, TRENDS SUBSTITUTES

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EXTERNAL ENVIRONMENT

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  1. EXTERNAL ENVIRONMENT • INDUSTRY, MARKETS • COMPETITION • ECONOMY • LEGAL, POLITICAL, SOCIAL

  2. INDUSTRY, MARKETS • CUSTOMER/CONSUMER • WHO • WHERE (AREA, COUNTRY) • WANTS, NEEDS • BUYING BEHAVIOR • BUYER • POWER • RELATIONSHIPS/ALLIANCES

  3. INDUSTRY, MARKETS (CONT’D) • MARKET SIZE, TRENDS • SUBSTITUTES • DISTRIBUTION SYSTEM • STAGE, PRODUCT LIFE CYCLE

  4. INDUSTRY, MARKETS (CONT’D) • STAGE, INDUSTRY LIFE CYCLE • FRAGMENTED • CONSOLIDATED • TECHNOLOGY AS THE PRODUCT • SUPPLIERS • POWER • RELATIONSHIPS/ALLIANCES

  5. COMPETITION • NATURE OF • WHO, WHERE • STRATEGY • ADVANTAGES - SUSTAINABLE • DISADVANTAGES

  6. COMPETITION (CONT’D) • RIVALRY • ENTRANTS, EXITS • SUBSTITUTES

  7. Industry Map / Strategic Groups Mercedes Jaguar BMW High General Motors Ford Chrysler Nissan Toyota Honda VW Price/Quality Hyundai Yugo Low Few Many Number of Market Segments Served

  8. Strategic Groups Candlelight Dining Unoccupied Product Space Atmosphere Fast Food Average Gourmet Quality of Food

  9. Strategic Group Map Price 18 17  16 Co B 15  14  Co D 13 Co A  12 Co C 11 10 Q3 Q2 Q1 Quality (1=highest) What is the strategy? Is the strategy “right?”

  10. ECONOMY • EFFECTS ON DEMAND • EXCHANGE RATES • EMPLOYMENT RATES • INFLATION • STABILITY

  11. LEGAL, POLITICAL, SOCIAL • LAWS, REGULATIONS • VARY BY MARKET • VARY BY COUNTRY • ETHICS • TRENDS • IMPORT/EXPORT LAWS

  12. KEY SUCCESS FACTORS “ABSOLUTE” REQUIREMENTS Airlines: low unit cost Air delivery: worldwide dist.

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