COMPANIES AND THEIR INDUSTRIES BUSINESS VOCABULARY IN USE (ADVANCED)

 

BUSINESS VOCABULARY IN USE (ADVANCED) 18. COMPANIES AND THEIR INDUSTRIES

 

A Competitive forces An important strategic thinker is Michael Porter1. He defines the five competitive forces at work in any industry. B SWOT analysis SWOT stands for strengths, weaknesses, opportunities, threats. In formulating strategy, a company should look at its strengths and weaknesses in relation to its competitors. For example, a good sales team is a strength and poor internal communication is a weaknesses. C Be good at something Porter says that competitive advantage can be based on: • cost leadership: offering products and services at the lowest cost; this is one strategy to adopt in volume industries where competitors produce large numbers of similar products. • differentiation: offering products and services that give added value in terms of quality or service compared to competitors • focus: using one of the above two strategies to concentrate on a niche, a specific part of the market with particular needs. EXERCISES 18.1 Look at A opposite and the examples (1-5) below of the expressions in the diagram boxes. Match each example to an appropriate form of one of the expressions. 1. Coca –Cola and Pepsi Cola in soft drinks 2. A company that is thinking of selling computer games when it has not sold them before. 18.2 Donna is presenting a SWOT analysis of her travel firm. Complete the table below with the expessions in italics. (The first one has been done for you.) ‘We have some very good locations for our travel agency shops in cities all over Europe.’ ‘There may be an economic slowdown next year, and travel is one of the things people cut back on first.’ ‘We are big enough to negotiate very good prices with hotels and airlines.’ 18.3 Look at the mission statements of three companies. Which strategy in C opposite does each correspond to? 1. To make sports cars for discerning enthusiasts with good technical knowledge. 2. To sell clothing more cheaply than the department store. 3. To sell electrical goods with a high level of after-sales service.

ANSWER KEY