Professional Documents
Culture Documents
Strategic
Management:
Concepts & Cases
11th Edition
Fred David
Ch 3 -1
External Strategic
Management Audit
Ch 3 -2
Key External Forces & the Organization
Competitors
Suppliers
Distributors
Creditors
Key Customers Opportunities
External Employees &
Forces
Communities Threats
Managers
Stockholders
Labor Unions
Special Interest Groups
Products
Services
Ch 3 -3
Performing External Audit
Long-term orientation
Measurable
External
Factors Applicable to
competing firms
Hierarchical
Ch 3 -4
I/O Perspective Firm Performance
Industry Properties
Economies of Scale
Product differentiation
Level of competitiveness
Ch 3 -5
Social, Cultural, Demographic
& Environmental Forces
U.S. Facts
•Aging population
•Less Caucasian
•Widening gap between rich & poor
•2025 = 18.5% population >65 years
•2075 = no ethnic or racial majority
Ch 3 -6
Key Social, Cultural, Demographic &
Environmental Variables
Childbearing rates
Ch 3 -7
Political, Government & Legal
Forces
Globalization of Industry
• Worldwide trend toward similar
consumption patterns
• Global buyers and sellers
• E-commerce
• Technology for instant currency transfers
Ch 3 -8
Competitive Forces
Identifying Rival Firms
•Strengths
•Weaknesses
•Capabilities
•Opportunities
•Threats
•Objectives
•Strategies
Ch 3 -9
Competitive Forces
7 Characteristics of most
Competitive U.S. Firms:
Ch 3 -10
Competitive Forces
7 Characteristics of most
Competitive U.S. Firms:
Ch 3 -11
The Five-Forces Model of Competition
Potential development
of substitute products
Ch 3 -12
The Global Challenge
Ch 3 -13
Industry Analysis: The External Factor
Evaluation (EFE) Matrix
Ch 3 -14
Ch 3 -15
Ch 3 -16
Industry Analysis EFE
Ch 3 -17
Industry Analysis: Competitive Profile
Matrix (CPM)
Ch 3 -18
Gateway Apple Dell
Wt Rating Wt’d Ratin Wt’d Rating Wt’d
CSF’s Score g Score Score
Ch 3 -19
Gateway Apple Dell
Wt Rating Wt’d Ratin Wt’d Rating Wt’d
CSF’s (cont’d) Score g Score Score
Prod. Capacity 0.04 3 0.12 3 0.12 3 0.12
E-commerce 0.10 3 0.30 3 0.30 3 0.30
Customer Serv 0.10 3 0.30 2 0.20 4 0.40
Price
0.02 4 0.08 1 0.02 3 0.06
competitive
Mgt. 0.01 2 0.02 4 0.04 2 0.02
experience
Ch 3 -20