Busi 490 Key Points (Chapter 2) Study Guide Graded A+

Explain why scenario planning is a useful technique for firms competing in industries characterized by unpredictability and change {Ans: scenario analysis is a structured approach to environmental forecasting. It involves experts from various disciplines working together to create projections of future events}The intensity of rivalry {Ans: captures the threat that customers will switch their business to competitors within the industry}Sociocultural segment {Ans: describes the values, beliefs, and lifestyles of a society}The bargaining power of buyers {Ans: describes the threat that buyers may force down prices, bargain for higher quality or more services. and play competitors against each other}The "five forces model {Ans: is used for examining the competitive environment. It describes the competitive environment in terms of five forces: (1) the threat of new entrants, (2) The bargaining power of buyers, (3) The bargaining power of suppliers, (4) the threat of substitute products/services, (5) The intensity of rivalry in an industry}Understand the concept of strategic groups and their strategy and performance implications {Ans: Two assumptions are unassailable: (1) No two firms are totally different, and (2) no two firms are exactly the same. Strategic groups help identify groups of firms that are similarly to