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Business Discussion Explain The Purpose Discussion Chapter

All of these elements are included in how the resource-based model of above-average returns is implemented in the world's largest software company (Gomes, 2009). Compare Google with Facebook. In terms of the five forces of competition, how are these companies competing against each other?

Google and Facebook are competing on several fronts the most significant being social networks and content aggregation including contextual search. Both Google and Facebook compete across social networks, yet long-term the greater competitive rivalry will be in the areas of aggregated and contextual search (Wall Street Journal, 2012). The five forces of competition including bargaining power of customers, threat of new entrants, threat of substitute products and bargaining power of suppliers all combine to define the competitive rivalry in an industry (Porter, 2008). In the social networking areas of Google and Facebook's competitive direction the bargaining power of customers is exceptionally strong as their loyalty drive advertisement revenues for both businesses (Wall Street Journal, 2012). And advertising revenue is the strongest source of revenue each company has. The secondary area of competitive rivalry is aggregated and contextual search (Gomes, 2009). The dominant competitive force on this dimension of their business is the threat of substitute products. As the pace of technological change continues to accelerate, both Facebook and Google will face significant competition on this area of their business models.

Describe the elements of an organization's...

Why is it important to understand the external environment include discussion of opportunities and threats?
There are a myriad of factors in an organization's external environment. These include the microeconomic and macroeconomic forces, customer and competitor dynamics and trends, pricing and related elasticity and substitute products, and the definition of demand curves for each product. There are also the supply chain, sourcing, procurement and distribution channel management strategies that are also critically important as well. It is imperative to understand all of these factors to better mitigate risk and get the most value out of opportunities. Many of the best-run organizations have a framework for continually monitoring, classifying and acting on specific cues from their external environment. In WalMart there are systems like this for managing supply chain risk and opportunities, including optimizing supply chain performance over time

(WalMart Investor Relations, 2013).

References

Gomes, L. (2009, Mar 16). Microsoft vs. The Big Three. Forbes, 183, 46.

Porter, M.E. (2008, the five competitive forces that shape strategy. Harvard Business Review, 86, 78-93.

The Competition vs. Google. (2012, May 24). Wall Street Journal.

WalMart Investor Relations (2013). Investor Relations. Retrieved May 8, 2013, from Wal-Mart Investor Relations and Filings with the SEC:

http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-estimates

Sources used in this document:
References

Gomes, L. (2009, Mar 16). Microsoft vs. The Big Three. Forbes, 183, 46.

Porter, M.E. (2008, the five competitive forces that shape strategy. Harvard Business Review, 86, 78-93.

The Competition vs. Google. (2012, May 24). Wall Street Journal.

WalMart Investor Relations (2013). Investor Relations. Retrieved May 8, 2013, from Wal-Mart Investor Relations and Filings with the SEC:
http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-estimates
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