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Chapter 3 One Page Study Guide

Chapter 3 focuses on external analysis to identify opportunities and threats for competitive advantage using the PESTEL framework and Porter's Five Forces. Key concepts include understanding macro and industry environments, strategic positioning, and common mistakes in analysis. The chapter emphasizes the importance of mapping strategic groups and utilizing frameworks to visualize competition.

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17 views2 pages

Chapter 3 One Page Study Guide

Chapter 3 focuses on external analysis to identify opportunities and threats for competitive advantage using the PESTEL framework and Porter's Five Forces. Key concepts include understanding macro and industry environments, strategic positioning, and common mistakes in analysis. The chapter emphasizes the importance of mapping strategic groups and utilizing frameworks to visualize competition.

Uploaded by

marisabeasley7
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 3 Study Guide: External Analysis

Objective: Analyze external environments to identify opportunities and threats for competitive advantage.

Key Concepts:

- Strategic Position: Creating value while managing cost.

- External Environment: Macro (PESTEL) + Industry (Porter).

PESTEL Framework:

- Political: Regulation (e.g., FDA)

- Economic: Inflation, recessions affect demand

- Sociocultural: Transparency, wellness trends

- Technological: Innovation, R&D

- Environmental: Sustainability, waste

- Legal: Compliance, IP laws

Porter's Five Forces:

1. Threat of New Entrants - Low barriers = higher threat

2. Supplier Power - Few suppliers = high power

3. Buyer Power - Informed buyers = high power

4. Substitutes - Other solutions reduce demand

5. Rivalry - Saturated markets = lower profits

Industry Structures:

- Perfect Competition -> Monopoly (scale, differentiation, consolidation)

Strategic Groups:

- Firms with similar strategies.

- Use maps to understand rivalry & mobility barriers.

Common Mistakes:

- Ignoring external trends

- Confusing firm vs. industry performance


- Misusing frameworks (e.g., PESTEL != prediction tool)

Takeaways:

- Use PESTEL for macro trends, Five Forces for industry.

- Map strategic groups to visualize competitors.

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