Handout 5 Flashcards
refers to an in-depth examination of key factors that influence the business operations of a firm. It involves carefully studying a firm’s external environment to predict environmental changes and detect changes already underway.
Environmental scanning
It includes physical resources, wildlife, and climate that are an inherent part of existence on Earth.
Natural environment.
It is mankind’s social system that includes general forces that do not directly affect the short-run activities of the firm but can influence its long-term decisions.
Societal environment.
These regulate the exchange of materials, money, energy, and information.
Economic forces.
These generate problem-solving inventions.
Technological forces.
These allocate power and constrain and protect laws and regulations.
Political-legal forces.
These regulate the values, morals, and customs of society.
Sociocultural forces.
It includes elements or groups that directly affect a firm and, in turn, are affected by it.
Task environment.
They have the power to create or reduce the demand for a product or service.
Customers.
They provide a product or service to another business.
Suppliers.
They provide a better or similar product to the same target segment.
Competitors.
They directly participate in activities that help fulfill the firm’s goals.
Employees.
Any change in tax law will impact the business operation.
Government Regulations.
They bring attention to the firm and could affect the operation in either a positive or negative way.
Special Interest Groups.
It is a framework used to evaluate a firm’s competitive position by listing the conditions inside and surrounding it.
SWOT Matrix.
These are the internal areas where an organization excels and factors that separate an organization from its competitors.
Strengths.
These are the internal areas that hinder an organization from performing at its optimum level.
Weaknesses.
These are favorable external factors that could give an organization a competitive advantage.
Opportunities.
These are the factors that may pose potential harm to an organization.
threat
It is a tool to identify the external forces that may affect an organization positively and negatively.
PESTEL Analysis.
These are factors related to how the government intervenes in the economy.
politics
These factors determine the impact of the economy and its performance on an organization and its profitability.
Economical
These factors determine the impact of the social environment and emerging trends on the business profitability of an organization.
Social
These factors determine the impact of technological innovation and development on a particular market or industry.
Technological
These factors determine the influence of the surrounding environment and ecological aspects’ impact on a market or industry.
Environmental
It is developed by Michael E. Porter as a framework for assessing and evaluating the competitive strength and position of a business organization.
Porter’s Five (5) Forces.
This force analyzes how suppliers can easily influence price increases.
Supplier power.
This force analyzes how buyers can easily influence price decreases.
Buyer power.
This force examines the intensity of competition in the marketplace. This is driven by the number and capability of competitors in the market.
Competitive rivalry.
This force is threatening when buyers can easily find substitute products with attractive prices or better quality and when buyers can switch from one product or service to another with little cost.
Threat of substitution.
This force determines how easy or difficult it is to enter a particular industry.
Threat of new entrants.
The business ecosystem is demonstrated by a network composing four
(4) types of players in the industry: customers, suppliers, competitors, and complementors.
Ecosystem Assessment Tool.
These are the people or parties that buy the products and services of an organization
Customers.
These parties provide the resources to produce or sell finished products or services
Supplier
These parties fight over an organization’s market share by offering similar products or services and targeting similar customers.
Competitors.
These organizations offer complementary or harmonizing products or services that could work well with a company’s products to make the result more attractive to consumers.
Complementors.
