MGMT 491 Chapter Notes - Chapter 3: Pest Analysis, Anagram
Document Summary
Pestel analysis is one important tool that executives can rely upon to organize factors within the general environment and identify how these factors influence industries and the firms within them. Five forces analysis is used to analyze the industry environment. Five forces analysis considers the interactions among the competitors in an industry, potential new entrants to the industry, substitutes for the industry"s offerings, suppliers to the industry, and the industry"s buyers. The competitors in an industry are firms that produce very similar products or services. Industry concentration is the extent to which a small number of firms dominate an industry; rivalry in fragmented industries tends to become bitter and fierce. Potential new entrants to an industry are firms that do not currently compete in the industry but may in the future. Substitutes are offerings that differ from the goods and services provided by the competitors in an industry, but that fill similar needs to what the industry offers.
