External Environment Analysis - 1774 Words

CHAPTER TWO EXTERNAL ENVIRONMENT ANALYSIS At the end of this chapter, the student should be able to: 1. Understand the processes for an environmentally conscious organization. 2. Know the importance of SWOT analysis in analyzing both external and internal environment. 3. Understand the different segments of the external environment known as the general environment. 4. To find out how the strength of the company’s competitive forces are congruent with the industry’s through the five-forces model of industry competition. 5. To understand the relevance of benchmarking in evaluating company’s performance as against competitors. INTRODUCTION: Companies must be responsive to the external business environment. Knowledge about the†¦show more content†¦5. Technological. Information technology, robotics, microelectronics, ergonomics, genetic engineering, computer-aided design, pollution, global warning, invention of smart gadgets are some of issues under this segment. 6. Global segment. This segment includes political events, peace agreements or negotiations, critical global markets, newly industrialized countries, trade agreements, and different cultural and institutional attributes. THE STRENGTH OF AN INDUSTRY’S COMPETITIVE FORCES Industry and competitive analysis should focus on the competitive dynamics of the industry. The five-forces model of competition is the most powerful and widely used tool for assessing the strength of the industry’s competitive forces. The Five Basic Competitive Forces 1. The threat of new entrants. Several factors determine whether the threat of new companies entering the marketplace presents a significant competitive pressure. As a rule, the bigger pool of entry candidates, the stronger the threat of potential entry. Dess, et.al. enumerated the six major sources of entry barriers. a. Economies of scale. Economies of scale refers to spreading the costs of production over the number of units produced. The cost of a product per unit declines as the absolute volume per period increases. b. Product differentiation. When existing competitors have strong brandShow MoreRelatedExternal Environment Analysis2283 Words   |  10 PagesExternal Environment Analysis JetBlue Airways Corporation (JetBlue) is a company that has focused on low-cost airline transportation service. It is also one of the top major airlines dominating the Domestic Airlines industry. To develop a better strategic business plan the company’s external business market and the effect it has on the business continuity plan must be analysis as well as the general, industry, and competitor environments. Another issue affecting companies is the role businessRead MoreExternal Environment Analysis1926 Words   |  8 PagesExternal Environment Analysis MGT/488 October 21, 2010 Patti Berlin External Environment Analysis Sam Walton began Wal-Mart in 1962 and opened the first store in Rogers, Arkansas (History, 2010, p. 1). Walton was not new to the retail industry and had traveled the United States to learn as much as possible about the industry. Walton knew that customer needs were important to success and he wanted to know as much as possible about the industry to meet those demands. Sam Walton experienced strongRead MoreExternal Environment Analysis6715 Words   |  27 Pagesdefined the playing arena of Foster. Secondly, identify Foster’s missions, sales and revenues in the past. Thirdly, evaluate the external sales environment, including customer and competition analysis. Fourthly, forecasting the future external scenario. Fifth, analysing the existing sales operations, and evaluating it through gaps, key successful factors, and SWOT analysis. Finally, we gave Foster the recommendation on sales operation strategy for the next three years, and also evaluated the pros andRead MoreExternal a nd Internal Environment Analysis1565 Words   |  7 PagesExternal and Internal Environmental Analysis This environmental analysis will provide a complete external environmental scan designed to provide RoyalBlu Invites with the tools needed to identify the organizations strength and weaknesses. Furthermore, including an assessment of the company resources. This analysis will assess the organization competitive position and possibilities of growth. An explanation of how the external environment affects RoyalBlu Invites structure and organizational performanceRead MoreExternal and Internal Environment Analysis1429 Words   |  6 PagesRunning head: EXTERNAL AND INTERNAL ENVIRONEMNT External and Internal Environment Analysis Bharti Gupta University of Phoenix External and Internal Environment Analysis: Mayo Clinic The purpose of this paper is to analyze the External and Internal environmental factors of Mayo Clinic (MC). Mayo Clinic is a nonprofit worldwide leader in medical care, research and education for people from all walks of life (Mayo Clinic,  2011). Various types of external and internal factors affect theRead MoreInternal And External Environment Analysis Essay1260 Words   |  6 Pagesstrategies, organizations must thoroughly analyze both the internal and external environments in which they operate (Hill, Jones, Schilling, 2014, p. 11). This analysis will enable them to pinpoint those elements that threaten their current and future profitability as well as those elements that offer the potential to increase current and future profitability (Hill, et al., 2014, pp. 44-45). The external environment analysis specifically looks at the industry within which a business functions asRead MoreExternal And Internal Environment Analysis835 Words   |  4 Pagesextensive external and int ernal environment analysis. When conducting external environmental analysis, a company must consider six factors. These factors include competition, economic growth, political trends, legal issues, advances in technology, and sociocultural trends (Ferrell Hartline, 2014). I have a strong interest in technology and gadgets. With that being the case, I chose the iPhone as the product and will analyze the six external environmental factors using that. The first external factorRead MoreAnalysis of the External Environment of Business1608 Words   |  7 PagesAnalysis of the External Environment of Business The Technological Environment The external business environment consists of four elements, they are as follows: Political, Economic, Social and technological. It would be impossible to analyse the whole environment in one essay, I have therefore decided to focus my essay on the technological environment. I have chosen this area to focus on because as Palmer and Hartley point out, it is one area that is forcing immense change in the external businessRead MoreLufthansa External Environment Analysis893 Words   |  4 Pageswould be able to sustain the growth that it has achieved in the past and manage any such Crisis in future.? GENERAL ENVIRONMENT ANALYSIS The general environment analysis will focus on trends in the four segments of General Environment. The following table shows the changes in the general environment that are affecting airline Business on an ongoing basis. B. Industry Analysis PORTER’S FORCES Threat of new Entrants and Barriers to Entry: Following are some of the threats to enter into aRead MoreExternal Analysis : Macro Environment999 Words   |  4 PagesExternal Analysis: Macro Environment Economic: Developed markets pose a risk to the luxury industry, however emerging markets such as China and India present opportunity for Coach as their middle class’s continue to grow. Socio-Cultural: Ever evolving views on sociocultural trends provide both opportunities and risks to this industry. Within developed markets, consumer preferences have shifted toward luxury accessories for both men and women. Criticism of companies that have outsourced much of