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    External Environment

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    spark_123
    The document discusses analyzing a company's external environment. It describes the general environment, industry environment, and competitor environment. The general environment includes dimensions like economic, sociocultural, global, technological, political/legal, and demographic factors. The industry environment focuses on factors influencing a firm's profitability within its industry. The competitor environment focuses on predicting competitors' actions. It then discusses analyzing opportunities and threats in the general environment and the components of external environmental analysis, including the economic, sociocultural, global, technological, political/legal, and demographic segments. It also describes Porter's five forces model for analyzing industry competition.

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    External Environment

    Uploaded by

    spark_123
    7K views16 pages
    The document discusses analyzing a company's external environment. It describes the general environment, industry environment, and competitor environment. The general environment includes dimensions like economic, sociocultural, global, technological, political/legal, and demographic factors. The industry environment focuses on factors influencing a firm's profitability within its industry. The competitor environment focuses on predicting competitors' actions. It then discusses analyzing opportunities and threats in the general environment and the components of external environmental analysis, including the economic, sociocultural, global, technological, political/legal, and demographic segments. It also describes Porter's five forces model for analyzing industry competition.

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    External Environment-

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    The document discusses analyzing a company's external environment. It describes the general environment, industry environment, and competitor environment. The general environment includes dimensions like economic, sociocultural, global, technological, political/legal, and demographic factors. The industry environment focuses on factors influencing a firm's profitability within its industry. The competitor environment focuses on predicting competitors' actions. It then discusses analyzing opportunities and threats in the general environment and the components of external environmental analysis, including the economic, sociocultural, global, technological, political/legal, and demographic segments. It also describes Porter's five forces model for analyzing industry competition.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    7K views16 pages

    External Environment

    Uploaded by

    spark_123
    The document discusses analyzing a company's external environment. It describes the general environment, industry environment, and competitor environment. The general environment includes dimensions like economic, sociocultural, global, technological, political/legal, and demographic factors. The industry environment focuses on factors influencing a firm's profitability within its industry. The competitor environment focuses on predicting competitors' actions. It then discusses analyzing opportunities and threats in the general environment and the components of external environmental analysis, including the economic, sociocultural, global, technological, political/legal, and demographic segments. It also describes Porter's five forces model for analyzing industry competition.

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    You are on page 1of 16

    External Environment-

    Questions that analyzes it


    External Environment
    General Environment
    • Dimensions in the broader society that
    influence and industry and the firms
    within it
    – Economic
    – Socio cultural
    – Global
    – Technological
    – Political/legal
    – Demographic
    Analysis of the External
    Environments
    • General environment
    – Focused on the future
    • Industry environment
    – Focused on factors and conditions influencing
    a firm’s profitability within an industry
    • Competitor environment
    – Focused on predicting the dynamics of
    competitors’ actions, responses and
    intentions
    Industry Environment

    Set of factors directly


    influencing a firm and its
    competitive actions and
    competitive responses
    Threat of new entrants
    Power of suppliers
    Power of buyers
    Threat of product
    substitutes
    Intensity of rivalry
    among competitors
    Analysis of the External
    Environments
    • General environment
    – Focused on the future
    • Industry environment
    – Focused on factors and conditions influencing
    a firm’s profitability within an industry
    • Competitor environment
    – Focused on predicting the dynamics of
    competitors’ actions, responses and
    intentions
    Opportunities and Threats
    • Opportunity
    – A condition in the general environment that if
    exploited, helps a company achieve strategic
    competitiveness
    • Threat
    – A condition in the general environment that
    may hinder a company’s efforts to achieve
    strategic competitiveness
    Components of the External
    Environmental Analysis
    General Environment (cont’d
    The Economic Segment
    Inflation rates
    Interest rates
    Trade deficits or
    surpluses
    Budget deficits or
    surpluses
    Personal savings rate
    Business savings
    rates
    Gross domestic
    product
    The Sociocultural Segment
    -Women in the workplace
    – Attitudes about quality of worklife
    – Concerns about environment
    – Shifts in work and career preferences
    – Shifts in product and service preferences
    – Workforce Diversity
    The Global Segment

    – Product innovations
    – Applications of knowledge
    – Focus of private and government-supported
    R&D expenditures
    – New communication technologies
    The Technological Segment

    – Product innovations
    – Applications of knowledge
    – Focus of private and government-supported
    R&D expenditures
    – New communication technologies
    The Political/Legal Segment

    ---Antitrust laws
    – Taxation laws
    – Deregulation philosophies
    – Labor training laws
    – Educational philosophies and policies
    The Demographic Segment

    – Population size
    – Age structure
    – Geographic distribution
    – Ethnic mix
    – Income distribution
    Industry Environment
    • Industry Defined
    – A group of firms producing products that are
    close substitutes
    • Firms that influence one another
    • Includes a rich mix of competitive strategies
    that companies use in pursuing strategic
    competitiveness and above-average
    returns
    The Five Forces of Competition
    Model

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