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Analysis of External Competitive Environment
Analysis of External Competitive Environment
ABSTRACT
INTRODUCTION
COMPONENTS OF THE EXTERNAL ENVIRONMENT
PROCESS INVOLVED IN THE ANALYSIS OF THE EXTERNAL ENVIRONMENT
SWOT ANALYSIS
FIVE FORCES ANALYSIS( PORTER’S MODEL)
PROCESS INVOLVED IN COMPETITORS ANALYSIS
CONCLUSION
ABSTRACT
Competition works to drive the rate of return toward the rate for a
“perfectly competitive industry”. Companies that don’t earn at least the
rate of return on long term invested capital will eventually go out of
business while companies that earn above the “Free Market Rate” attract
new entrants to the industry or expansion by existing firms.
As investment flows in the rate of return is driven down, limiting the ability
of firms to sustain above average returns.
Economic
Demographic
Socio cultural
Political/Legal
Technological
Global
This is the analysis of the Strength, weakness, opportunities and threats of the
organization.
• Possible Opportunities:
– Quality Improvements
– Vertical Integration
• Possible Threats:
– New entry by competitors
– Regulatory requirements
The five forces are environmental forces that impact on a company’s ability to
compete in a given market, they also determines the attractiveness of the
industry.
In analyzing the competition, various questions are asked, and proper responses
provided. The questions are broadly divided into four (4) categories:
The appropriate responses to these questions will also be considered vis a vis the
following factors;
CONCLUSION