The General & Competitive Environment

In: Business and Management

Submitted By adamstunde
Words 1562
Pages 7
Henry: Understanding Strategic Management
The General & Competitive Environment
(Slides based on Chapters 2 and 3)

Key concepts we will cover:
• Analysing the General Environment
– PEST analysis – Risk & Scenario Planning

• Analysing the Competitive Environment
– Porter’s 5 Forces model – Porter’s Strategic Group Analysis – Hypercompetition

The General Environment
• The external environment facing the organization consists of: • General environment • Competitive environment • The changes that occur in the general environment transcend organizations and industries

• The competitive environment consists of the industry and markets in which an organization competes

Some Interactions Between Businesses & Their Environment
Customers Shareholders & Creditors

National & Local Governments
Media

Suppliers Competitors Business Support Groups Wholesalers
Public Opinion

The Organisation

Foreign Governments Social Activist Groups Local Communities Employees

Adapted from K Davis & W C Frederick “Business and Society: Management, Public Policy, Ethics”, 5th Edition, McGraw-Hill, 1984

The General Environment
• The figure shows the relationship between the organization and its external environment • Other things being equal, it is the competitive environment that has the greatest impact on the organization
Figure 2.1

The General Environment
• PEST analysis is useful for scanning the general environment • PEST is political, economic, social, and technological factors

• PEST analysis can be used to identify weak signals that may point to a discontinuity shaping the environment • PEST provides a link between the general and competitive environment • Weak signals in the general environment can become forces for change in the competitive environment

ESTEMPLE - expanding PEST
DRIVERS Economic
Social Technological

TIME
Health…...

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