Environmental Scanning Flashcards
degree of complexity plus the degree of change that exists in an organization’s external
environment
environmental uncertainty
the monitoring, evaluation, and dissemination of information from the external and internal environments to key people within the corporation.
Environmental scanning
includes physical resources, wildlife, and climate that are inherent part of existence on Earth.
natural environment
mankind’s social system that includes general forces (Economic, technological, political-legal, and sociocultural environmental forces) that do not directly touch on the short-run activities of the organization that can, and often do, influence its long-run decisions
societal environment
regulate the exchange of materials, money, energy, and information.
Economic forces
generate problem-solving inventions
Technological forces
that allocate power and provide constraining and protecting laws and regulations.
Political–legal forces
that regulate the values, mores, and customs of society
Sociocultural forces
The part of the business environment that includes the elements or groups that directly affect the corporation and, in turn, are affected by it.
task environment
(popularized by Michael Porter)
refers to an in-depth examination of key factors within a corporation’s task environment.
Industry analysis
These are governments, local communities, suppliers, competitors, customers, creditors, employees/labor unions, special-interest groups, and trade associations.
task environment
the amount of greenhouse gases it is emitting into the air.
carbon footprint
the transfer of profits from a foreign subsidiary to a corporation’s headquarters
repatriation of profits
what are the technological breakthroughs that are already having a significant impact on many industries?
- Portable information devices and electronic networking:
- Alternative energy sources
- Precision farming
- Virtual personal assistants
- Genetically altered organisms
- Smart, mobile robots
Eight current sociocultural trends are transforming North America and the rest of the world:
- Increasing environmental awareness
- Growing health consciousness
- Expanding seniors market
- Impact of Generation Y Boomlet
- Declining mass market
- Changing pace and location of life
- Changing household composition
- Increasing diversity of workforce and markets
a company with significant assets and activities in multiple countries,
conducts its marketing, financial, manufacturing, and other functional activities.
multinational corporation (MNC)
an advanced information discovery system designed to help extract trends, detect patterns, and find relationships within vast amounts of raw data.
WebFountain
willingness to reject unfamiliar as well as negative information
strategic myopia
a group of firms that produces a similar product or service, such as soft drinks or financial services.
industry
who contends that a corporation is most concerned with the intensity of competition within its industry?
Michael Porter
Businesses entering an industry that typically bring new capacity to an industry, a desire to gain market share, and substantial resources.
new entrants
an obstruction that makes it difficult for a company
to enter an industry
entry barrier
some possible barriers to entry
- Economies of scale
- Product differentiation
- Capital requirements
- Switching costs
- Access to distribution channels
- Cost disadvantages independent of size
- Government policy
According to Porter, intense rivalry is related to the presence of several factors, including:
- Number of competitors
- Rate of industry growth
- Product or service characteristics:
- Amount of fixed costs
- Capacity
- Height of exit barriers
- Diversity of rivals
product that appears to be different but can satisfy the same need as another product.
substitute product
how can buyers affect the industry?
their ability to force down prices, bargain for higher quality or more services, and play competitors against each other
how can suppliers affect the industry?
their ability to raise prices or reduce the quality of purchased goods and services
a company (e.g., Microsoft) or an industry whose product works well with a firm’s (e.g., Intel’s) product and without which the product would lose much of its value
complementor
The process of proposing ideas in a group without first mentally screening them.
Brainstorming
A formal program of gathering information about a company’s competitors.
Competitive intelligence
The companies that offer the same products or services as the subject company.
Competitors
An industry in which a few large companies dominate.
Consolidated industry
A forecasting technique in which experts independently assess the probabilities of specified events. These assessments are combined and sent back to each expert for fine-tuning until agreement is reached.
Delphi technique
A table that organizes external factors into opportunities and threats and how well management is responding to these specific factors.
EFAS (External Factor Analysis Summary) table
A person who initiates and manages a business undertaking and who assumes risk for the sake of a profit.
Entrepreneur
An obstruction that keeps a company from leaving an industry
Exit barrier
A non quantitative forecasting technique in which authorities in a particular area attempt to forecast likely developments.
Expert opinion
Environmental trend with both high probability of occurrence and high probability of impact on the corporation.
External strategic factor
Costs of doing business that are not included in a firm’s accounting system, but felt by others.
Externality
A form of forecasting that extends present trends into the future.
Extrapolation
An industry in which no firm has large market share and each firm serves only a small piece of the total market.
Fragmented industry
An industry in which a company manufactures and sells the same products, with only minor adjustments for individual countries around the world.
Global industry
An industry situation in which the frequency, boldness, and aggressiveness of dynamic movement by the players accelerates to create a condition of constant disequilibrium and change.
Hypercompetition
A group of firms producing a similar product or service.
Industry
An in-depth examination of key factors within a corporation’s task environment.
Industry analysis
A chart that summarizes the key success factors within a particular industry.
Industry matrix
A forecasted description of an industry’s likely future.
Industry scenario
A chart that ranks the probability of occurrence versus the probable impact on the corporation of developments in the external environment.
Issues priority matrix
Variables that significantly affect the overall competitive position of a company within a particular industry.
Key success factors
A policy of the World Trade Organization stating that a member country cannot grant one trading partner lower customs duties without granting them to all WTO member nations.
Most favored nation
An industry in which companies tailor their products to the specific needs of consumers in a particular country.
Multidomestic industry
A company that has significant assets and activities in multiple countries.
Multinational corporation (MNC)
A forecasting technique in which people make bets on the likelihood of a particular event taking place.
Prediction markets
An industry in which multinational corporations primarily coordinate their activities within specific geographic areas of the world.
Regional industry
The transfer of profits from a foreign subsidiary to a corporation’s headquarters.
Repatriation of profits
A forecasting technique in which focused descriptions of different likely futures are presented in a narrative fashion.
Scenario writing
A quantitative technique that attempts to discover causal or explanatory factors that link two or more time series together.
Statistical modeling
An approach to scanning the societal environment that examines sociocultural, technological, economic, ecological, and political-legal forces. Also called PESTEL analysis.
STEEP analysis
A set of business units or firms that pursue similar strategies and have similar resources.
Strategic group
A category of firms based on a common strategic orientation and a combination of structure, culture, and processes that are consistent with that strategy.
Strategic type
Products that appear to be different but can satisfy the same need as other products.
Substitute products
The point at which a country has developed economically so that demand for a particular product or service is increasing rapidly.
Trigger point
companies with a limited product line that focus on improving the efficiency of their existing operations.
Defenders
are companies with fairly broad product lines that focus on product innovation and market opportunities.
Prospectors
are corporations that operate in at least two different product-market areas, one stable and one variable.
Analyzers
are corporations that lack a consistent strategy-structure-culture relationship.
Reactors
