chapter 6 and 7 Flashcards
(93 cards)
The three major methods of gathering reliable and relevant
information from a company’s environment are:
ENVIRONMENTAL ANALYSIS
focuses on external events that may influence the present position of a business
ENVIRONMENTAL SCANNING
is primarily concerned with the
trends of events
ENVIRONMENTAL MONITORING
gives preferential importance on
information about competitors.
COMPETITIVE INTELLIGENCE
These elements help in determining strategic factors that influence the direction, growth and success of a company.
Physical Resources Climate Wildlife
To determine the possible strategic factors that can reduce the negative or unfavorable impacts of the expected changes on the physical environment of a company.
PHYSICAL ENVIRONMENT ANALYSIS
The strategic approach that is used to analyze the physical environment is
environmental scanning
Strategic Factors of the Societal Environment
Political or Legal Segment
Economic Segment
Sociocultural Segment
Technological Segment
To determine the trends of the strategic factors that are relevant to the growth of an industry.
SOCIETAL ENVIRONMENT ANALYSIS
To gather, evaluate, and disseminate reliable and relevant information about the societal environment, the approach used is an
ENVIRONMENTAL SCANNING
the specific strategic tool used to scan the societal environment is the
PESTEL or STEEP analysis
Strategic Factors of the Industry Environment
Customers
Suppliers
Creditors
Employees
The Government
Competitors
To determine the different forces that drive competition and the extent of the competition so a company can position itself in an
industry.
OBJECTIVE OF INDUSTRY ANALYSIS
The commonly used tool to analyze the industry environment is
PORTER’S FIVE FORCES of Competition Model.
evaluates the level of competition and assesses the attractiveness of an industry itself.
PORTER’S FIVE FORCES of Competition Model.
Strategic Factors of the Internal Environment
Corporate Culture
Organizational Structure
Business resources
To determine how culture influences
strategy formulation.
Corporate Culture
To determine what structure can effectively and efficiently achieve organizational goals.
Organizational Structure
To determine which business resource contributes to the achievement of competitive advantage.
Business resources
is influenced by the type of strategic factor being analyzed and the strategic tool used in the analysis.
objective of conducting an internal environment analysis
evaluates the internal strengths and weaknesses of a company against what the external opportunities and threats offer.
SWOT (strengths, weaknesses, opportunities, and threats) analysis model
is a strategic management tool that assesses the resources of a company to achieve competitive advantage.
VRIO (value, rareness, imitability, and organization) framework
If it can add value for the customer and if it provides the company the capability to exploit opportunities or defend against threats.
valuable
Only a few company possess it.
Rare