The External and Internal Enviroments

13 important questions on The External and Internal Enviroments

What is the external enviroment?

all the relevant forces outside a firm's boundaries, such as competitors, customers, the government and the economy.

What is the competitive enviroment?

The immediate enviroment surrounding a firm; includes suppliers, customers, rivals, and the like.

When is competition the most intense?

  1. When there are many direct competitors
  2. When the industry growth is slow
  3. Product / Service is not easily differentiated
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What are barriers for New Entrants?

  1. conditions that prevent new companies from entering an industry
  2. capital requirements, restrictive distribution channels

What is the difference between Final Customers and Intermediate Customers?

Final customers buy the finished product only.
intermediate customers buy raw materials or wholesale products before selling them to final customers.

What is Environmental Uncertainty? And what does it consist of?

Lack of information needed to understand or predict the future.

Environmental Complexity: 
the number of issues to which a manager must attend as well as the interconnectedness of thee issues.

Environmental Dynasim:
the degree of discontinuous change that occurs within an industry.

What are the 5 types of Environmental Analysis?

  1. Environmental Scanning
  2. Competitive Intelligence
  3. Scenario Development
  4. Forecasting
  5. Benchmarking

What is Enviromental Scanning?

Searching out information that is unavailable to most people and sorting that information to interpret what is important and what is not

What is Scenario Development?

A narrative that describes a particular set of future conditions.

Best-case and worst-case scenario.

In what ways can you change the Environment you are in?

  1. Strategic maneuvering
  2. Domain selection
  3. Diversification
  4. Mergers
  5. Acquisitions
  6. Divestiture
  7. Prospectors
  8. Defenders

What is Strategic Maneuvering?

An organization's conscious efforts to change the boundaries of the task environment.

What is Domain selection?

Enterance into a new market or industry with an existing expertise

What is the Organizational Culture?

The set of important assumptions about the organization and its goals and practises that members of the company share

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