Introduction
Companies always operate in a certain environment; the formulation and implementation of business strategy are also restricted by the particular environmental factors. (Osborn & Hunt 1974) In other words, environment decides the enterprises’ strategy, decisions making, organizational structure and management styles. The environmental awareness has become the starting point of the environment analysis. (Sethi 1979) In general, the corporate strategy has two environment factors to consider, internal and external environments. Furthermore, because the influence degrees are different, the outside environments divide into the macro environment and industry environment. The productivity and operation of modern enterprises have been increasing impact from the external environment. (Osborn & Hunt 1974)
The strategic management for the organization need has an overall and objectives analysis about the change of the external environment, based the research result to set up the organizational goals and strategy plans. The enterprise and its external operation conditions are in an interaction and interrelated relationship.(Osborn & Hunt 1974) The purpose of study on the peripheral environment is supporting a chance to the organizations to finger out the possible developing opportunity and potential threat, use them to be the conditions and limitations to develop the business strategy. (Sethi 1979)
There have a close contact between business and environment. On the one hand, the environment is the basis for enterprise survival, the elements the business needs all obtained from the external environments, such as human resource, materials, energy, capital, technology, information, etc. Meanwhile, the company's products must be ma...
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Seven Network Limited, 2004, DCITA Multi-channelling Review, Retrieved August 18, 2011. From http://www.dbcde.gov.au/__data/assets/pdf_file/0015/13191/Seven_Network_Ltd.pdf
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A firm?s external environment is divided into three major areas : the general, industry and competitor environments. Below is an elaboration in further detail regarding the firm?s opportunities and threats in these three environments.
Environment external :-in the external environment is that put impact on company ability from outside it include all the outside factor that can effect the outside growth of company external environment plays important role to in the development of company as well as market growth of company in Stella Artois there was also effect on company expand in the market one was mature market and another was growth marke...
This kind of analysis is known as a SWOT analysis. The internal business environment entails all the activities within the business that the business stakeholders are capable of influencing. At Adventure Paintball Park, the internal environment includes the product offering at the park, the employees, resources, customers and the management. Internal business environment presents the business with strengths and weaknesses, which affect the business growth. In addition, proper management of the strengths and weaknesses gives the business an edge to explore the opportunities and eliminate threats. External business environment on the other hand entails factors such as the competitors, threats of new entrants and substitute products.
Business strategy formulation and implementation is an integral part of the strategic management process, business strategy is an ongoing process to develop and revise future-oriented strategies that allow an organization to achieve its objectives while considering its capabilities, constraints, and the environment in which it operates. An important aspect in improving the formulation and implementation of business strategy is developing a greater understanding of the internal environment; the McKinsey’s 7S framework is a model for analysing organizations and their effectiveness. It creates a better understanding of seven key elements associated with the internal environment that make organizations successful: strategy, structure, systems,
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Layers of the business environment framework in Figure 1 is used to conduct the strategic analysis of the company. PESTEL framework is used to analyse the most outer layer of the environment, which is the macro-environment, which identifies how future issues in the political, economic, social, technological, environmental and legal environment might affect organisations. These issues can act as key drivers for change, which are referred to as ‘the environmental factors that are likely to have a high impact on the success or failure of strategy’ (Johnson, Whittington and Scholes, 2011). Based on the information available from the case study, it is found that the changes in organisational culture might affect the company in terms of social. Meanwhile, new discoveries and developments of technology, which in the case study is the shift from analog to digital technology, might give an impact to the business in terms of technological aspect. Taking a look at economic perspective...
The external analysis is divided into macro and micro environment, the macro or remote environment includes general forces that do not directly touch on the short-run activities of the organization, but it can influence the long-run strategic decisions. There are various ways to analyze the macro environment, but the most notable model is the PESTLE analysis (Political, Economical, Socio–cultural, Technological, Legal, and Environmental). While, the micro environment is forces or groups that directly affect and are affected by an organization’s major operations be analyzed by Porter’s 5 Forces that consists of threats of new entrants, threat of substitutes, bargaining power of supplier, bargaining power of buyer, and
There are many environmental factors that affect marketing. Management of any company is the one who, faced with marketing decisions when the environmental factors affect marketing. The environmental factors are the factors that created by external factors. Some of the factors are global economics, demographics, cultural difference, social responsibilities, ethics and technology. It is important for the company to understand how these factors affect the company’s marketing plan. To get success in the business world, it is important to understand how to control these environmental factors that affect the business. The company that is getting affected by the environmental factors is Toyota motors.
Managing from a global perspective requires managers to pay close attention to factors in the external environment, which may affect an organisation's success. It may be, however, that factors in the internal environment will also influence success in a global environment. It is important for global managers to be familiar with the factors of the external environment and pay close attention to the management of the internal environment because factors from both the internal and external environments will most certainly influence the success of an organisation. Most importantly, managers may need to strategically optimise the internal environment for the specific properties of the external environment in which they operate. The performance of an organisation may not be exceptional unless management of the internal environment, or the conditions existing within the organisation, is fully optimized for the external environment.
Nowadays, it is important for any type of business to have a clear knowledge of the external environment, this will help the business to have a success in running its operation.
Environmental scanning is the process of gathering information about events and their relationships within an organization's internal and external environments. The basic purpose of environmental scanning is to help management determine the future direction of the organization (Barnat, 2004). For a business to succeed, it is important to study the business environment of the firm that consists external and internal influences that affect the firm’s decisions and performance (Grant, 2010). Environmental scanning includes the assessment of Macro and Micro environmental analysis.
Macro environment consists of external factors that affect a business and that are uncontrollable and influence business-making decisions. The macro environment consists of different factors that pose opportunities and threats to the company. There are six factors that macro environment consists of; demographic environment, economic environment, natural forces, technological forces, political forces and social & cultural forces. It’s crucial to identify, understand and analyze the factors so that the company can reach its optimum performance. It’s important for companies to study the macro environment so that they can divide the population into different target markets and plan which market segment to go into. One of the most crucial steps in forming a business is planning and a macro environmental analysis helps them to do that. Often businesses conduct a so-called PEST-analysis that helps them to understand market growth and decline, direction for possible actions and the current business position.
The importance of Environmental Analysis lies in its usefulness for evaluating the present strategy, setting strategic objectives, and formulating strategies. The political environment can affect organizations. Political components influence buyer certainty and purchaser and business spending. Stability of the political environment is essential for organizations to enter new markets.
Environmental factors cater for the protection of the environment. A business must carefully be able to look at its surroundings to see for benefits and ensure that its daily production does not interfere with society.
Business environment is a set of different factors, including political, economic, social and technological factors, which significantly affect the business operations of the company in either positive or a negative manner. these factors are, in fact, classed as internal and external factors which simultanously affect on the nature of business, and the company has the ability to control the behavior of business organizations in order to work better and give excellent results.