BMGT 495 Study Guide - Midterm Guide: Pest Analysis, Employment-To-Population Ratio, Oligopoly
BMGT 495: Strategic Management January 30, 2018
What is Strategy
• A firm’s theory about how to compete successfully
• The theory is based on the firm’s goals and understanding of
o The external environment within which it operates
o The internal resources and capabilities
o Economic logic of how firms create and capture value.
Firm’s External Environment
• Factors determining performance
o Firm Effects – 30-45%
o Industry Effects – 20%
o Other Effects – 35-50%
▪ Corporate parent, year effects, unexplained variance
• Why does industry matter more than initially thought?
• Macro-Level Environment vs. Task/Industry
• Macro-Level
o Economy
o Employment rate
o Geo-Political events
o National and State Policies
o Demographics
o Government
o Innovation and technology
o People’s lifestyles
• Industry
o Competitors
• External Environment Frameworks
o PESTEL & Porter 5 Forces
o A good way to breakdown external environment into smaller manageable parts
for analysis
o Focus on different aspects of the environment one at a time
• PESTEL
o Political and legal factors
o Technological factors
o Sociocultural factors – lifestyles
o Political, Economic, Socio-Cultural, Technological, Environmental, Legal
• Technological improvements from landline telephones to smartphones
Firm of the Day
• UBER
o The use of carpooling allows for a greener environment
o People don’t declare the income they receive from Uber
o Legal issues arising from worker’s benefits and salaries
o Technological changes with the change in smart phones
o Banned in some cities and countries due to certain policies and regulations
• Porter Five for Uber