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Misa_CH2001 Misa_CH2002 Misa_CH2003 Misa_CH2004 Misa_CH2005 Misa_CH2006 Misa_CH2007 Misa_CH2008 Misa_CH2009 Misa_CH2010 Misa_CH2011 Misa_CH2012 Misa_CH2013 Misa_CH2014 Misa_CH2015 Misa_CH2016 Misa_CH2017 Misa_CH2018 Misa_CH2019 Misa_CH2020 Misa_CH2021 Misa_CH2022 Misa_CH2023 Misa_CH2024 Misa_CH2025 Misa_CH2026 Hypercompetition and Global Competition 1-Global Competition How does the global economy impact a business you know about? 2- Hypercompetition Define -- give some examples. _____________________________________ Models of Above Average Returns 1-Industrial Organization (I/O) Model of Above Average Returns Discuss Assumptions and provide examples 2- Resource-Based Model of Above-Average Returns Discuss and give examples _______________________________________ five forces model 1-Rivalry Among Existing Firms Discuss rivalry among established firms in the industry -- and give examples.

2-Threat of Substitutes Discuss - threat of substitutes -- and give examples. 3-Bargaining Power - Suppliers Discuss - bargaining power of suppliers -- and give examples. 4-Bargaining Power - Buyers Discuss - bargaining power of buyers -- and give examples. 5- Risk of Entry Define -- discuss RISK OF ENTRY and give examples. _______________________________________________ Industry Environment 1-Technology Factors Discuss opportunities and threats (INDUSTRY) and give examples for companies. 2-Social Factors Discuss opportunities and threats (INDUSTRY) and give examples for companies.

3-Economic Factors Discuss opportunities and threats (INDUSTRY) and give examples for companies. 4-Political and Legal Factors Discuss opportunities and threats (INDUSTRY) and give examples for companies. __________________________________________________ Readings and Videos General Mills - Mission and Vision Any insight, questions, or ideas from this video? SWOT Analysis Any insight, questions, or ideas from this video? Porter's Five Forces Model Any insight, questions, or ideas from this video? Industry Life Cycle Any insight, questions, or ideas from this video?

Paper For Above instruction

Introduction

Understanding the dynamics of the external environment is essential for strategic management. Businesses operate within complex systems influenced by global economic forces, industry-specific factors, and competitive forces. This paper explores how the global economy impacts businesses, the concept of hypercompetition, models of achieving above-average returns, the Five Forces model, and industry environment factors such as technology, social, economic, and political/legal influences. Additionally, insights from the readings and videos on General Mills' mission and vision, SWOT analysis, Porter’s Five Forces, and industry life cycle are discussed to illustrate practical applications of these strategic concepts.

Global Economy and Business Impact

The global economy profoundly affects individual businesses by shaping demand, competition, and operational costs. For example, Amazon, a global e-commerce giant, is impacted by currency fluctuations, international trade policies, and global supply chain disruptions. During economic downturns, consumer spending diminishes, affecting revenue streams; conversely, periods of economic growth often lead to increased demand for products and services. Global economic integration also facilitates market expansion but introduces risks such as political instability, tariffs, and economic sanctions. The interconnectedness means that economic shocks in one country, like the 2008 financial crisis, can have ripple effects worldwide, compelling businesses to adapt strategies proactively (Cavusgil, Knight, Riesenberger, 2017).

Hypercompetition: Definition and Examples

Hypercompetition describes a rapidly changing competitive landscape characterized by continuous innovation and aggressive strategic moves that erode competitive advantages quickly (D’Aveni, 1994). Unlike traditional competition, which seeks sustainable positioning, hypercompetitive markets emphasize transient advantages resulting from dynamic, often disruptive, changes. For instance, the smartphone industry exemplifies hypercompetition, with firms like Apple and Samsung constantly introducing new features, designs, and marketing strategies to outpace rivals. Similarly, the ride-sharing industry, led by Uber and Lyft, exemplifies hypercompetition through rapid expansion, regulatory battles, and technological innovations that consistently reshape market positioning (Hitt, Ireland, Hoskisson, 2017).

Models for Achieving Above-Average Returns

Industrial Organization (I/O) Model

The I/O model suggests that external industry structure primarily determines a firm’s profitability. Key assumptions include the notion that industries differ in attractiveness and that firms can improve profits by positioning themselves within favorable industries (Porter, 1980). For example, oil companies operating in a deregulated, high-demand industry tend to achieve above-average returns compared to those in declining sectors.

Resource-Based View (RBV) Model

The RBV posits that firm-specific resources and capabilities are the primary sources of competitive advantage and superior performance (Barney, 1991). Unique resources such as proprietary technology, strong brand reputation, or skilled human capital enable firms like Apple to sustain above-average returns despite industry challenges.

Five Forces Model Analysis

Rivalry Among Existing Firms

In the airline industry, intense rivalry manifests through price wars, frequent promotional campaigns, and service differentiation. Major airlines such as Delta and United continuously compete to capture market share despite high fixed costs and limited product differentiation.

Threat of Substitutes

The rapid growth of telecommuting platforms like Zoom and Microsoft Teams illustrates how virtual meetings act as substitutes for business travel, impacting airline and hospitality industries negatively when remote communication reduces physical travel needs.

Bargaining Power of Suppliers

In the semiconductor industry, suppliers like TSMC hold significant bargaining power due to the specialized nature of advanced chip manufacturing, influencing pricing and supply constraints for tech giants like Intel and AMD.

Bargaining Power of Buyers

In the automotive industry, large fleet buyers exert considerable influence over manufacturers by demanding discounts and customization options, affecting profit margins.

Risk of Entry

High capital requirements, regulatory barriers, and strong brand loyalty in the banking sector create significant risks for new entrants, maintaining industry stability but limiting competition from startups.

Industry Environment Factors

Technology

Advances in artificial intelligence and automation present opportunities for manufacturing firms to increase efficiency but also pose threats if competitors leverage technology for disruptive innovations. For manufacturing companies like Tesla, adopting AI-driven production processes provides a competitive edge but necessitates heavy investment.

Social

Changing consumer preferences toward sustainability influence industries. Food companies like Nestlé are adjusting product lines to meet demand for organic and ethically sourced products, creating opportunities but also facing regulatory scrutiny.

Eeconomic

Economic fluctuations directly impact discretionary spending. Apparel retailers such as Gap experience reduced sales during recessions, but economic recovery fosters consumer confidence and increased retail activity.

Political and Legal

Trade tariffs, regulations on emissions, and labor laws significantly shape industry strategies. For example, stricter environmental regulations push automotive companies toward electric vehicles, exemplified by Tesla's response.

Insights from Readings and Videos

The video on General Mills' mission and vision emphasizes aligning corporate purpose with societal needs, fostering brand loyalty and strategic focus. SWOT analysis reveals internal strengths like brand equity and weaknesses such as limited geographic diversification. Porter's Five Forces highlights the intense competition and threat of new entrants in the snack food industry. The industry life cycle analysis suggests that General Mills is in the mature stage, where innovation and differentiation remain critical for growth and market share maintenance.

Conclusion

Strategic management involves analyzing a multitude of external factors to sustain competitive advantage. By understanding the impacts of the global economy, hypercompetition, industry forces, and environmental factors, companies can craft responsive and innovative strategies. Practical insights from industry cases and strategic models serve as guiding frameworks to navigate complex market dynamics, ensuring long-term success.

References

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• D’Aveni, R. A. (1994). Hypercompetition: Managing the Dynamics of Strategic Maneuvering. Free Press.
• Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic Management: Competitiveness and Globalization. Cengage Learning.
• Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. The Free Press.
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