Balancing theory with practice, this fully updated fourth edition of John A. Parnell's acclaimed text continues to provide detailed, accessible coverage of the strategic management field. Concise, easy to understand chapters address concepts sequentially, from external and internal analysis to strategy formulation, strategy execution, and strategic control. To help readers build their analytic skills as they master course concepts, Parnell aligns each chapter's key concepts with 25 case analysis steps, rather than relegating case analysis to a chapter at the end of the book. Current examples and high interest real-time cases, largely drawn from The Wall Street Journal and Financial Times, illustrate the key role of strategic management in the United States and around the world. Ideal for the capstone strategic management course, Strategic Management is appropriate for a range of undergraduate and graduate courses.

Industry Competition

Industry competition

Chapter Outline

  • Industry Life Cycle Stages
  • Industry Structure
  • Intensity of Rivalry Among Incumbent Firms
    • Concentration of Competitors
    • High Fixed or Storage Costs
    • Slow Industry Growth
    • Lack of Differentiation or Low Switching Costs
    • Capacity Augmented in Large Increments
    • Diversity of Competitors
    • High Strategic Stakes
    • High Exit Barriers
  • Threat of Entry
    • Economies of Scale
    • Brand Identity and Product Differentiation
    • Capital Requirements
    • Switching Costs
    • Access to Distribution Channels
    • Cost Advantages Independent of Size
    • Government Policy
  • Pressure From Substitute Products
  • Bargaining Power of Buyers
  • Bargaining Power of Suppliers
  • Limitations of Porter's Five Forces Model
  • Summary
  • Key Terms
  • Review Questions and Exercises
  • Practice Quiz
  • Student Study Site
  • Notes

This chapter marks the beginning of the strategic management process and is the first of three that consider the external environment. At this point we are focusing on factors external to the organization, viewing firm performance from an industrial organization (IO) perspective. Internal factors (e.g., ...

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