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
DISTRIBUTION SYSTEM
STAGE, PRODUCT LIFE CYCLE
INDUSTRY, MARKETS (CONT’D)
STAGE, INDUSTRY LIFE CYCLE
FRAGMENTED
CONSOLIDATED
TECHNOLOGY AS THE PRODUCT
SUPPLIERS
POWER
RELATIONSHIPS/ALLIANCES
COMPETITION
NATURE OF
WHO, WHERE
STRATEGY
ADVANTAGES - SUSTAINABLE
DISADVANTAGES
COMPETITION (CONT’D)
RIVALRY
ENTRANTS, EXITS
SUBSTITUTES
Industry Map / Strategic Groups
Mercedes
Jaguar
BMW
High
General Motors
Ford
Chrysler
Nissan
Toyota
Honda
VW
Hyundai
Yugo
Low
Few
Number of Market Segments Served
Many
Strategic Groups
Atmosphere
Candlelight
Dining
Unoccupied Product Space
Fast Food
Average
Gourmet
Quality of Food
Strategic Group Map
Price
18
17
16
15
14
13
12
11
10

Co A
Q3

Co B

Co D

Co C
Q2
Q1
Quality (1=highest)
What is the strategy? Is the strategy “right?”
ECONOMY
EFFECTS ON DEMAND
EXCHANGE RATES
EMPLOYMENT RATES
INFLATION
STABILITY
LEGAL, POLITICAL, SOCIAL
LAWS, REGULATIONS
VARY BY MARKET
VARY BY COUNTRY
ETHICS
TRENDS
IMPORT/EXPORT LAWS
KEY SUCCESS FACTORS
“ABSOLUTE” REQUIREMENTS
Airlines: low unit cost
Air delivery: worldwide dist.