10 Questions
What is assessed for a country in the PESTEL analysis?
Technological environment
What determines the industry's structural attractiveness from the point of view of existing companies?
The Five Forces Framework
Who are referred to as 'Incumbents' in the context of the Five Forces Framework?
Existing industry firms
What does the profit margin formula calculate?
Industry profitability
What does the Five Forces Analysis assess for existing industry firms?
The threat of substitute products
What determines the buyer power in the Five Forces Analysis?
Switching cost for the buyer
What do strategic groups in an industry help identify?
Profitability for within strategy group members
Which factor is NOT considered in determining the competitive rivalry in the Five Forces Analysis?
Number of buyers
What does the bargaining power of suppliers determine?
Cost of incumbent companies
What is a strategic group map used for within an industry?
Grouping companies with similar business models or strategies
Study Notes
PESTEL Analysis
- A country's political, economic, social, technological, environmental, and legal factors are assessed.
Industry Attractiveness
- The industry's structural attractiveness is determined by the Five Forces Analysis from the point of view of existing companies.
Five Forces Framework
- Incumbents refer to existing companies in the industry.
Profit Margin
- The profit margin formula calculates the difference between revenue and cost.
Five Forces Analysis
- The analysis assesses the threat of new entrants, bargaining power of suppliers, threat of substitutes, buyer power, and competitive rivalry for existing industry firms.
Buyer Power
- Buyer power is determined by factors such as the number of buyers, their concentration, and the importance of each buyer to the industry.
Strategic Groups
- Strategic groups help identify firms with similar characteristics, such as business models, production processes, or market focuses, within an industry.
Competitive Rivalry
- Government policy is NOT considered in determining the competitive rivalry in the Five Forces Analysis.
Bargaining Power of Suppliers
- The bargaining power of suppliers determines how much control they have over prices and other aspects of the industry.
Strategic Group Maps
- Strategic group maps are used to visualize and identify firms with similar characteristics within an industry.
Test your knowledge of environmental analysis in competitive strategy development with this quiz. Topics include external and internal environments, PESTEL analysis, industry analysis, and the Five Forces Framework.
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