BUSS1000 Chapter Notes - Chapter 4: Pest Analysis, Switching Barriers, Fixed Cost
19 Jul 2018
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Provides comprehensive list of influences on possible success or failure of strategy. Many factors are interlinked (e. g. technology with economic) High impact factors likely to significantly affect success or failure of strategy. Focus on the pestel factors that are most important. Offers alternative views of how business environment might develop in the future. They do not offer just one single forecast of how environment will change. Scenarios start from key drivers with greatest uncertainty. Five forces framework developed as way of assessing attractiveness (profit potential) of different industries. Extent of rivalry between competitors in the industry. If these five forces are high, then industry is not attractive to compete in, because too much pressure and competition. Depends on height and extent of barriers to entry. High barriers are good for incumbents (existing competitors) Economies of scale can be important in some industries.
