Page 166 - BA1 Integrated Workbook STUDENT 2018
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Subject E3: Strategic Management
CHAPTER 4 – EXTERNAL ENVIRONMENTAL ANALYSIS
4.1 C
Industry analysis is likely to use Porter’s five forces. The fact that the macro-
environment has changed little would suggest that PEST is less useful for Y,
while Porter’s diamond would examine geographic competitiveness of the
company, which does not seem appropriate here.
Note that the product lifecycle might be give some useful information about Y’s
product portfolio, but it is unlikely to produce as detailed an analysis of Y’s
industry as a whole that five forces.
4.2 D
Porter’s five forces model helps the organisation examine which aspects of its
industry are strategically important.
As XCX is producing a film which is based on a popular series of books. As the
film rights are exclusive to XCX, it is producing a differentiated product, which
will reduce customer power.
4.3 A
Tigers always react aggressively towards perceived threats by their rivals.
4.4 D
The fact that the market is growing and flourishing suggests that demand, factor
conditions and relating and supporting industries are all present.
The main cause for concern is the fact that CCC has little experience of
competitive markets, suggesting that its strategy, structure and rivalry may not
be suited to enter a competitive market.
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