ExternalEnvironmentalAnalysis-TowsonUniversity.pptVIP

External Environmental Analysis Lecture Topics Purpose of External Environmental Analysis Gathering Information for External Environmental Analysis General Environment Competitive Environment Key Success Factors Competitive Changes During Industry Evolution Strategic Groups National Competitive Advantage Purpose of External Environmental Analysis Organizations are affected by conditions in the environment Managers need to be aware of these conditions in order to Take advantage of opportunities that can lead to higher profits Reduce the impact of threats that can harm the organization’s future Gathering Information for External Environmental Analysis Managers need information in order to know and develop an understanding about what is happening in the external environment Three approaches to information gathering: Scanning: general surveillance of environmental changes; looking for early signals of changes Monitoring: close attention to specific developments that could affect the organization Competitive Intelligence: following actions of competitors Two Areas for Analysis General Environment Competitive Environment The General and Competitive Environment General Environment General EnvironmentDemographics Characteristics of a country’s population Size of population and growth rate Age distribution of population Education levels Income distribution Ethnic diversity Geographic distribution General EnvironmentPolitical/Legal Political and legal conditions affecting business Government policies toward business Investment incentives Business regulation: labor, environment Education priorities Budget conditions and plans General EnvironmentTechnological Technological developments relevant to a business Telecommunications Internet On-line training Product and process innovations General EnvironmentMacroeconomic Impact of the economy on business Size and change in gross domestic product Per capita income levels Inflation rate Interest rates Foreign trade deficit or