External Analysis

External Analysis

1. Defining an Industry

   • group of companies
   • The same customer needs
   • sector: group of related industries

2. Risk of Entry

   • Identify opportunities and threats
   • Potential Competitors
   • Economies of Scale
     • Reduction in unit costs
   • Brand Loyalty
     • Preference of consumers

3. Competitive Forces Model

4. The Bargaining Power of buyers

   • Ability of buyers to bargain down prices
     • Powerful buyers can squeeze the profits out of an industry

5. Rivalry among established Companies

   • Struggle betwwen companies to gain market
     • Price, product design, advertising, service
   • Competitive Structure
   • Industry Demand
   • Cost Conditions

6. The Bargaining Power of suppliers

   • Organizations that provide inputs into the industry
   • Suppliers are most powerful in these situations:
     • The product has few substitutes, a particular supplier's product are unique

7. Substitute products

   • Products that can satisfy similar customer needs

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