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MGMT 101 Outline1 RM

Competitors existing and potential customers

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Competitors (existing and potential) Customers Suppliers The competitive environment impacts tend to have persistent effects on the average firms in the industry. Porter’s Five Forces Model is used to analyze the competitive environment of an industry : 1. The Bargaining Power of Buyers : buyers can force down prices or bargain for higher quality or more services by playing competitors against each other; buyers have this power when they are in concentrated groups or if the product is indistinguishable (ex. Airline tickets) 2. The Bargaining Power of Suppliers : suppliers can threaten to raise prices or reduce the quality of purchased good and services; they have this power when they’re in concentrated groups (OPEC), their product is an important input to the buyer’s business, the supplier’s products are differentiated or it has built up switching costs for the buyer 3. The Threat of New Entrants : profits may be eroded by new entrants; LOW threat when barriers to entry are high; barriers impacted by: economies of scale, product differentiation, access to distribution channels 4. The Threat of Substitute Products and Services : substitutes limit the potential returns of an industry by placing a ceiling on the prices that firms in that industry can profitably charge; lower price and higher performance of substitutes causes a HIGH threat 5. The Intensity of Rivalry among Competitors in an Industry : rivalry diminishes profits as resources are devoted toward price competition, advertising battles, increased customer service, and warranties; rivalry increases with the number of competitors, slow industry growth, lack of differentiation or switching costs Lecture Three: Output: Goals and Effectiveness 2
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We concentrate on the organization aspect of outputs, which attempts to measure performance and effectiveness within the organization. Because this is measured at different levels, there are different levels of goals as well: Organization-Level Goals : resource utilization, profit, sales, flexibility/adaptability, growth Group - Level Goals : contribution to organizational-level objectives, cohesion, integrations; answers is your group happy and productive? Individual - Level Goals : satisfaction, productivity, ethical behavior, quality of work life Choices about which goals one chooses will influence strategy. Measuring Organizational Goals: Seashore’s Dimensions of Effectiveness Criteria : 1. Ends v. Means : what is needed to reach some final goals? When the ends are obvious, we focus on them, but when the final goal is less obvious or qualitative, we focus on the means. 2. Time Reference : should past or future data be used; ex. Using growth measures/targets 3. Long v . Short Run : for example, balancing the immediate risks and profits with long term investments and profit goals 4. Hard v . Soft : soft is intangible things such as satisfaction, hard is usually on paper or numbers 5. Values : some goals/measures are linear while others are curvilinear; we want to be in the middle Latham’s Goal Setting Theory : Effective goals are….
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