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Factors Affecting The Competitive Nature Of An Industry

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QUESTION 1

Macroenvironment forces
Macroenvironment forces can have a direct impact on the competitive nature of an industry, as well as Porter’s forces (Hill, Schilling, & Jones, 2016: 67). Macroenvironment forces consist of macroeconomic, global, technological, demographic, social, and political and legal forces. Macroeconomic forces include four forces which can affect the companies’ ability to earn a sufficient rate of return. These four forces are growth rate of the economy, interest rates, currency exchange rates, and inflation rate (68). Global forces include barriers to international trade and investment, which may make it harder or more difficult to enter emerging markets. Technological forces deal with the advancements and …show more content…

In terms of global forces, managers should consistently be analyzing the benefits from trade based on trade regulations. In today’s society, international trade is increasingly uncertain as many countries seem to be shifting more towards a mercantilist view of trade, in which they are focusing on putting the needs of their country before globalism. Managers may find that lobbying to government for free trade will help with the distribution of products worldwide, as well as improve the company’s bottom line (69).
Moving on, technological forces are another important force. A new technological development can suddenly and unexpectedly cause certain products to go obsolete. Technological innovation is constantly occurring, and if managers due not stay with the times, their company will be left behind in the dust. In addition, it is increasingly important to specialize products towards certain demographics. The younger generation is becoming increasingly tech-savvy and environmentally aware, which are important for social forces as well. Younger consumers tend to support companies that are socially responsible, and managers should keep this in mind.
First Movers
A first mover is defined as “a firm that pioneers a particular product category or feature by being first to offer it to market” (Hill et al., 2016: 220). If managed properly with a sound strategy, the first mover can continue to capture a strong market share

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