Self- study questions
2. Identify five key environmental characteristics that could be general opportunities and five key characteristics that could be general threats for most industries. * Suppliers
Items make up a large percentage of revenue, costly for buyers to switch suppliers * New entrants
Barriers of entry, entrants at a disadvantage higher cost to set up (regulated policy) * Buyers
Could shift if prices, quality, service and other conditions are not met, as they switching costs to substitutes or other brands * Substitutes
If a substitute can satisfy the needs of the customer, attractive pricing * Industry competitors and rivalry
Price, quality of goods, customer service all that can be used by companies to push out a rival company.
5. Explain how industries attractiveness can be determined using a five forces analysis. Applying the Porter’s analysis identifies the major forces in the organisation, which gives stability to industries this will lead to attractiveness and yet “industry environment conditions that the organisation’s strategy should focus on”. Eg. The industry that supplied PC equipment were low otherwise moderate with an overwhelming consumer base, with the figures of rivalry competitors also moderate. The threats of new competition would stand at a low level thus increasing the attractiveness of an industry Furthermore “the customers perception of the value of the product or service depends in part on the availability of substitute products. Threats of entry tends to be low were companies cant differentiate themselves, creating barriers or creating licensing and regulations will improve the odds of companies making it more attractive. 6. Describe why a strategic group analysis is conducted
The strategic group analysis view sections in an industry of the basis of strategies of the member organisations. Similar strategy along the strategic dimensions improves the quality of the overall business...
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