Competitor analysis is focused on the factors and conditions influencing an industry’s profitability potential.

The global segment of the external environment provides many opportunities for large corporations but does not represent an appropriate market segment for family business firms, even large ones

China allows its firms to copy, or pirate, software created by firms in the United States and other countries. The Chinese firms take the intellectual property created by the other companies and then sell the resulting products for a lower price, undercutting the sales of the companies that invested in the product development. This activity represents a threat in the general environment that might prevent the U.S. companies from achieving strategic competitiveness

Suppliers are powerful when the industry is dominated by a few large companies, no satisfactory substitutes are available, the selling industry is relatively more concentrated than the purchasing industry, or switching costs are high

The legislation introduced in the U.S. Congress during the early tenure of the Obama administration intended to reduce the amount of work U.S. companies outsource and is an example of a potential change in the sociocultural segment of the general environment

A firm that sells cannabis in the states of Colorado and Washington might consider expanding into California, as that state recently legalized the retail selling of cannabis. The firm may also want to examine other state laws to see where else cannabis sales is legal. However, it would be ineffective to develop a strategy to encourage legalization in states that currently prohibit it as a means of future expansion, since firms are generally unable to influence the political/legal segment of the external environment

PepsiCo’s strategy called “capital performance with a purpose” links green efforts in businesses to the bottom line. This is an example of addressing concerns in the sustainable physical segment of the general environment

Opportunities allow a company to exploit conditions in the environment while threats can lead to damage to a company’s integrity

The five competitive forces model expands the arena of competitive analysis beyond direct competitors (i.e., rivals) to include buyers and suppliers who may also be a source of competition

Demographic, economic, political/legal, sociocultural, technological, global, and sustainable physical are the seven elements comprising the general environment