ADMS4900Ch2 - ADMS 4900 Notes Chapter 2 Analyzing the...

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ADMS 4900 Notes Chapter 2 – Analyzing the External Environment of a Firm Can refer to case study on page 29 textbook for example of The Canadian Forest Industry and what went wrong. - To be successful, managers must recognize opportunities and threats in their firm’s external environment - Must be aware of not only internal operations, but also keep in touch with the evolving realities of the marketplace - To understand the business environment of a particular firm, managers need to continuously analyze and stay abreast of both the general environment and the firm’s industry and competitive environment General environment: consists of a myriad of elements that an organization finds outside in its own boundaries and which have some bearing on its ability to exist and thrive. Many factors shape the org’s general environment, and the interrelationships among those factors are typically beyond the control of management of any org’n. Some factors include: gov’t legislation, general economic trends, globalization, advances in technology, national cultural differences, general levels of education and an aging population – all which could potentially and critically affects the fortunes of a particular organization. is composed of a set of firms that produce similar products or services, sell to similar customers, and use similar methods of production. An industry consist of all those producers whose products can satisfy similar consumer needs – ie) fancy chocolates, good wines and flowers competing for customers wishing to express gratitude to one another. Therefore, an industry does not necessarily have to be the same or similar product; it can have a similar need too. - Time is another factor in defining the boundaries of an industry - When the time dimension issue under consideration is relatively short, direct competitors belong in the same industry, and firms that produce different products for different markets can safely be left out - Technological developments also raise substantial issues about the boundaries of industries. - Gathering industry information and understanding competitive dynamics among the different companies in the industry are keys to successful strategic management. Creating the Environmentally Aware Organization Environment Scanning
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- involves surveillance of a firm’s external environment to predict future environmental changes and detect changes already under way - Companies may frequently benefit from studies conducted by outside experts in a particular industry Environmental Monitoring - Tracks the evolution of environmental trends, sequence of events, or streams of activities. -
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ADMS4900Ch2 - ADMS 4900 Notes Chapter 2 Analyzing the...

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