1. Ch2-1 Chapter 2 The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis Michael A. Hitt R. Duane Ireland Robert E. Hoskisson Michael A. Hitt R. Duane Ireland Robert E. Hoskisson ©2000 South-Western College Publishing

2. Ch2-2 Political/ Legal Economic Technological Global Demographic Sociocultural CompetitiveEnvironment Industry Environment Components of the General Environment

3. Ch2-3 SWOT Analysis Strengths Weaknesses Opportunities Threats

4. Ch2-4 The purpose of SWOT Analysis It is an easy-to-use tool for developing an overview of a company’s strategic situation –It forms a basis for matching your company’s strategy to its situation

5. Ch2-5 SWOT is the starting point It provides an overview of the strategic situation. It provides the “raw material” to do more extensive internal and external analysis.

6. Ch2-6 Opportunities An OPPORTUNITY is a chance for firm growth or progress due to a favorable juncture of circumstances in the business environment. Possible Opportunities: –Emerging customer needs –Quality Improvements –Expanding global markets –Vertical Integration

7. Ch2-7 Threats A THREAT is a factor in your company’s external environment that poses a danger to its well-being. Possible Threats: –New entry by competitors –Changing demographics/shifting demand –Emergence of cheaper technologies –Regulatory requirements

8. Ch2-8 Opportunities and Threats form a basis for EXTERNAL analysis By examining opportunities, you can discover untapped markets, and new products or technologies, or identify potential avenues for diversification. By examining threats, you can identify unfavorable market shifts or changes in technology, and create a defensive posture aimed at preserving your competitive position.