External Environment Flashcards
What is the external environment?
The factors beyond the control of the firm that influence its choice of direction and action, organizational structure, and internal processes
What is the firm’s environment comprised of?
Remote environment
Industry environment
Operating environment
What does the operating environment entail?
- competitors
2.creditors - customers
- labour
- suppliers
What does the industry environment entail?
- entry barriers
- supplier power
- buyer power
- substitute availability
- competitive rivalry
What does the environment entail?
- economic
- social
- political
- technological
- ecological
What is the remote environment?
Economic, social, political, technological, and ecological factors that originate beyond, and usually irrespective of, any single firm’s operating situation
What are some economic factors in the remote environment?
- Prime interest rates
- Inflation rates
- Trends in the growth of the gross national product
- Unemployment rates
- Globalization of the economy
- Outsourcing
What are some social factors in the remote environment?
Beliefs & Values
Attitudes & Opinions
Lifestyles
Where are social factors developed from?
- Cultural conditioning
- Ecological conditioning
- Demographic makeup
- Religion
- Education
- Ethnic conditioning.
What are three profound social changes of the remote environment?
- Entry of large numbers of women into the labor market
- Accelerating interest of consumers and employees in quality-of-life issues
- Shift in the age distribution of the population
What are some political factors in the remote environment?
- Fair-trade Decisions
- Antitrust Laws
- Tax Programs
- Minimum Wage Legislation
- Pollution and Pricing Policies
- Administrative jawboning
What are the two governmental functions that political activities has a signifcant impact on?
- Supplier function
- Customer function
What is technological forecasting?
The quasi-science of anticipating environmental and competitive changes and estimating their importance to an organization’s operations
What is eco-efficiency?
Company actions that produce more useful goods and services while continuously reducing resource consumption and pollution
Who propelled the industry environment?
Michel E Porter