module2-bmc2 Flashcards
set of external conditions and forces
- Environment
Two components:
general environment
industry
overall trends and events in society
general environment
consists of multiple organizations
industry
provides resources
Source of opportunity and threats
Shapes the various strategic decisions
Environment
events and trends that create chances to improve
opportunities
events and trends that may undermine
threats
opportunity to others, threats to other
- Environmental trend
follows systematic process
- serves as input for the formulation
External Environment Analysis Process
External Environment Analysis Process
Environmental Scanning
Environmental monitoring
competitive intelligence
critical surveillance/identifying key forces
environment scanning
- tracking environmental trends
Environmanetal monitoring
collecting, analyzing, and interpreting information
- monitor moves
Competitive intelligence
beyond the control of company
physical environment
Elements of the General Environment: PESTEL Analysis
Political
economic
socio-cultural
technological
environmental
legal
important tool that executives can rely on
- popular framework
pestel
political
role of governments/TAX
- economic conditions/RATES
economic
Trends in demographic
socio-cultural
provided by science/automation
technological
- physical condition/disaster
environmental
courts/law
legal
The Porter’s Five Forces Analysis
- Threat of potential entrants
- Bargaining power of suppliers
- Rivalry of industry competitors
- Bargaining power of buyers
- Threat of substitutes
