Hierarchy of External Influences Social Economic Technical Global Political/Legal Remote Environment Competitive Environment Firm Five Forces Competitor Intelligence Industry Structure Strategic Groups Political/Legal

Social Influencers (Stakeholders) Shareholders Government Financial Community Host Community Ecological Environment Society in General Remote Environment Competitive Environment Firm Rivals Customers Suppliers Employees Managers Board Members

Social Influence on International Strategy Acme GmbH WOS in Germany Acme Inc. HQ in U.S. Cervesa SA JV in Mexico Gang Ped LTD Contract Supplier in Thailand

Stakeholder Analysis Who are they? How can they be classified? How do they exert influence? What is level of threat [opportunity] ?

Stakeholder Management Establish communication Establish mutual satisfaction of needs via negotiation Motivating stakeholders Financial Political Cultural Persuasion

Social Influence on Strategy Financial goals vs. “caving in” Business-level strategy: Revise goals? How to adjust value chain activities? Can social influence be a good thing? Corporate-level strategy: Portfolio management? Transformation?

Stakeholders and Influence Other Co.’s owning stock Managers Board Stockholders Ownership Employees Customers Suppliers Competitors Type of Stake in Firm Operations Economic Dependence JV Partners Creditors IRS Competitors Suppliers Customers Activist groups Government Media EPA OSHA SEC Social Regulatory Economic Political Influence on Firm Behavior

Environmental Scanning Grid

External Influences on Five Forces (+) or (-) influence... Threat of New Entrants Threat of New Entrants More Competitive Bargaining Power of Suppliers Rivalry Among Competing Firms in Industry Bargaining Power of Buyers Threat of Substitute Products Less Competitive 23

Human Resource Management Technological Development Social Influences on the Value Chain Firm Infrastructure Human Resource Management MARGIN Technological Development Procurement Service Inbound Logistics Outbound Logistics Marketing & Sales Operations 21

Source of Competitive Advantage Breadth of Competitive Scope Social Influence on Business-level Strategy Source of Competitive Advantage Cost Uniqueness Cost Leadership Broad Target Market Different. Breadth of Competitive Scope Focused Low Cost Focused Different. Narrow Target Market 89

Social Responsibility and Corp. Strategy