Environmental Threats to the Profitability of Firms
Let’s focus on an activity that will then drive a discussion among our classmates. Chapter 2 talks about five environmental threats to the profitability of firms in an industry (also known as Porter’s Five Forces). This is such a good tool for a manager and I want you to become familiar with applying it. It is a tool you can use when we start looking at cases.
You can get a better of an idea of how the 5 Forces work by watching how Michael Porter explains them.
( https://www.youtube.com/watch?v=mYF2_FBCvXw )
So, let’s practice applying the five forces. I want you to complete #2.9 in the Problem Set on page 58. However, you can choose the pharmaceuticals industry or the textile industry. Write a brief analysis on either pharmaceuticals or textiles using the information in the problem.
After you post your analysis, you can read and comment on how other students answered the question as well.
This discussion board has 2 two parts.
Which approach to strategy development is more likely to develop competitive advantage and economic profits?
- a) A firms who evaluates external opportunities and threats and then develops resources and capabilities to exploit those opportunities or neutralize the threats.
- b) A firm that evaluates their internal resources and capabilities and then searches for an industry where these resources and capabilities can be effectively used?
Fully explain your answer.
Identify three firms you might want to work for after graduation (one could be where you currently work). Use the VRIO framework to evaluate these firms. Do their resources and capabilities give them the potential to realize competitive advantage? Competitive disadvantage? Parity? Etc.? What implications, if any, does this analysis have for the company you might want to work for?