Chapter 2—The External Environment: Opportunities, Threats, Competition, and Competitor Analysis

| December 13, 2017

2. (Refer to Case Scenario 1) Why would
attention focused on victims of natural disasters be a threat to the BGC?

3. (Refer to Case Scenario 1) How might the BGC
respond to threats to their donations at both local and national levels?

4. (Refer to Case Scenario 1) The purpose of the
Boys and Girls Club (BGC) is to instill in youth the tools and skills needed to
become healthy adults, responsible citizens, and effective leaders. If the BGC were to initiate programs about
women’s issues, women in the workforce, workforce diversity, and changes in
work and career preferences, it would be contributing to an understanding of
which segment of the general environment?

b) Sociocultural
c) Economic
d) Technological

Case Scenario 2: B.B.
B.B. Mangler is a top
U.S. business-to-business distributor of maintenance, repair, and service
equipment, components, and supplies such as compressors, motors, signs,
lighting and welding equipment, and hand and power tools. Its industry is
typically referred to as MRO, which is an acronym for maintenance, repair, and
supplies. MRO products are typically small, fairly inexpensive (light bulbs and
washers), but often needed on short notice. It states its strategy as having
the “capacity to offer an unmatched breadth of lowest total cost MRO solutions
to business.” Mangler’s GoMRO sourcing center for indirect spot buys locates
products through its database of 8,000 suppliers and 5 million products.
Mangler has 388 physical branches in the U.S., including Puerto Rico (90% of
sales), 184 in Canada, and 5 in Mexico. Customers include contractors, service
and maintenance shops, manufacturers, hotels, governments, and health care and
educational facilities. Mangler also provides materials-management consulting

5. (Refer to Case Scenario 2) Historically,
Mangler appears to have relied on its physical locations for market presence in
the U.S. and northern South America. What threats does the Internet pose to its
location-based strategy?

6. (Refer to Case Scenario 2) What opportunities
does the Internet provide to Mangler, both domestically and internationally?

7. (Refer to Case Scenario 2) How should Mangler
respond to the threat of new Internet-based entrants?

8. (Refer to Case Scenario 2) The use of the
Internet by Mangler would enhance its low cost strategy and reduce the barriers
of entry to markets in Europe, Asia, and Latin America

Case Scenario 3:
Barracuda Inc.
Barracuda Inc. is a
lamp fixture manufacturer that is considering an entry strategy into the U.S.
home furnishings manufacturing industry. The existing landscape consists of
many players but none with a controlling share. There are presently 2500 home
furnishings firms, and only 600 of those have over 15 employees. Average net
profit after tax is between 4 and 5%. While the industry is still primarily
comprised of single-business family-run firms that manufacture furniture
domestically, imports are increasing at a fairly rapid rate. Some of the
European imports are leaders in contemporary design. Relatively large
established firms are also diversifying into the home furnishings industry via acquisition.
Supplier firms to the home furnishings industry are in relatively concentrated
industries (like lumber, steel, and textiles). Retailers, the intermediate
customer of the home furnishings industry, have been traditionally very
fragmented. Customers have many products to choose from, at many different
price points, and few home furnishing products have strong brands. Also,
customers can switch easily among high and low-priced furniture and other
discretionary expenditures (spanning big screen TVs to the choice of postponing
any furniture purchase entirely).

9. (Refer to Case Scenario 3) Using the
five-forces framework, summarize the opportunities and threats facing Barracuda
as it considers entry into the home furnishings manufacturing industry. Which
threats are greatest to current incumbents?

10. (Refer to Case Scenario 3) How intense is competitive rivalry
likely to be among incumbents of the home furnishings manufacturing industry?

11. (Refer to Case Scenario 3) Is the furniture industry described
above attractive?

12. (Refer to Case Scenario 3) Given the characteristics of buyers
(customers) in the U.S. home furnishings manufacturing industry (many products
to choose from, few home furnishing products have strong brands, and customers
can easily switch among high and low-priced furniture), buyers would be considered
weak and their effect would be to make the industry more atrractive.

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