33:620:492 Lecture Notes - Lecture 2: Swot Analysis, Volcker Rule, Cloud Computing

• School: Rutgers University
• Department: Management and Global Business
• Course: 33:620:492
• Professor: Ed Hubbard

Document Summary

2 analyzing the external environment of the firm. Why analyze: idenify business opportuniies, idenify threats, make forecasts, provide input into strategy. Industrial organizaion model: known as i/o model , key idea: the external environment is the main determinant of how to manage strategy, describes how to achieve above-average returns, key assumpions: External environment imposes pressures and constraints that determine efecive strategies. Resources are mobile, so any advantage of resources is only temporary. Business execuives are raional (they seek to maximize proits: using the i/o model. Idenify the strategy that will succeed in this industry (i/o model assumes there is one winning strategy) Acquire and use the skills and assets needed to pursue the strategy: validity of the i/o model. 20% of a irm"s proitability can be explained by the industry it resides in. However 36% of the variance in irm proitability can be explained by the irm"s characterisics and acions.