...asserts that many factors in the external environment cause a lot of turbulence and uncertainty for organizations. According to him the environment often imposes major constraints on the choices managers make for their organizations. To add to the above, Gareth & Hill (2008) also observed that since performance is the major objective of an organization, it is generally accepted that the structure and decision making in an organization is influenced by environmental complexity and volatility. There are many variables in a firm’s external environment which strategic managers must be aware of. First and foremost, a firm’s external environment consists of variables and trends that do not directly touch on the short run activities of the firm but can, and often do influence its long-run decisions. These trends are found in the firm’s societal environment; also known as the macro-environment and they include economic, technological, political-legal and socio-cultural forces that influence decision making in organizations. Secondly, there are variables in a firm’s external environment which directly affect the organization and are in turn affected by it. These are found in the task environment; also known as the micro-environment. Daft (2008) views the task environment as the sectors with which an organization interacts directly and that have a direct impact on the organizations ability to achieve its goals. A corporation’s task environment can be seen as the industry within which...
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...Report to a senior manager of a real organization on the following: A proposal and justification for an e-business strategy. The organization must have little or no significance e-business activity now. In your discussion clearly: 1) Outline the strategy and summarize the main changes expected in the organization 2) Implementation plan should show how the changes will be achieved. 3) Identify the benefits and explain how they can be measured. 15th May, 2013 To: The Senior Manager Dear Sir, A PROPOSAL FOR THE ADOPTION OF E-BUSINESS STRATEGY IN OPERATIONS AND ACTIVITIES OF THE ORGANISATION. The rapid development within the society in the use of information and communication technology (ICT) has meant a revolution in the way businesses work, as indeed it has changed the way in which many people work. Nowadays people need to have skills and competences to be able to use information and communication technologies. The development of the knowledge society is raising demand for the key competences in the personal, public and professional spheres. The way in which people access information and services is changing, as are the structure and make-up of societies. The growing internationalization of economies affects the world of work, with rapid and frequent change, the introduction of new technologies and new approaches to organizing companies. E-business...
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...How can firms use models of analysis to understand their business environment? Discuss using appropriate examples. Organizations can use one business analysis model to analyse a section of its business or combine this with other business models to help them in the strategic planning process to gain a competitive advantage in today’s fast changing markets. SWOT and TOWS are acronyms for strengths, weaknesses, opportunities and threats. SWOT (internal-external) provides a checklist of strengths, weaknesses to minimize, uncover opportunities to take advantage of and identify threats to avoid. Whereas the TOWs matrix is (external-internal) matching internal strengths and weaknesses with external opportunities and threats provides a more in depth look at your company’s standing in its current market and gives an understanding of your competitors. External Opportunities (O) External Threats (T) Internal Strengths (S) (SO) Maxi-Maxi Strategy Use strengths to create opportunities (ST) Maxi-Mini Strategy Use strengths to minimise threats Internal Weaknesses (W) (WO) Mini-Maxi Strategy Minimize weaknesses to take advantage of opportunities (WT) Mini-Mini Strategy DEFENSIVE Minimize weaknesses and avoid threats It is important to use verifiable statements such as “Opportunities to save $10M in changing supplier” rather than “Opportunities to save will be good if we change supplier”. If the business is small it is important to know the risks and limitations in using...
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...Canadian Business Environment Market and Nonmarket Environments Any issues or changes that happen in one of these environments can directly cause change to the other. Since both of these are so closely related and to a great importance for a firm to run successfully, they have put more focus on managing both aspects of the company. The interrelationship between the market and nonmarket environment is heavily based on the role of management. Since a firm will operate in both the market and nonmarket environments, managers are there to measure the impact one has on the other. The issues found in the nonmarket environment are directly related to the market environment of the firm. The nonmarket environment is a little more difficult to control than the market environment, but each firm is aware of the importance of running sufficiently in both aspects in order to be successful. As shown in figure 1-1 (Baron p. 3), the relationship that the nonmarket and market environment has. Market environment determines the significance of nonmarket issues to the firm. Nonmarket environment shapes business opportunities in the market place. Analysis of the Nonmarket Environment When analyzing the nonmarket environment of an organization the main focus is the four I’s that characterize the organization. The four I’s consists of Issues, Interests, Institutions and Information. The issues aspect is the main part of the nonmarket analysis, issues of a firm can be very vast, and they...
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...Market and Nonmarket Environments Any Issues or Changes That Happen in One of These Environments Can Directly Cause Change to the Other. Since Both of These Are so Closely Related and to a Great Importance for a Firm In: Business and Management Market and Nonmarket Environments Any Issues or Changes That Happen in One of These Environments Can Directly Cause Change to the Other. Since Both of These Are so Closely Related and to a Great Importance for a Firm Canadian Business Environment Market and Nonmarket Environments Any issues or changes that happen in one of these environments can directly cause change to the other. Since both of these are so closely related and to a great importance for a firm to run successfully, they have put more focus on managing both aspects of the company. The interrelationship between the market and nonmarket environment is heavily based on the role of management. Since a firm will operate in both the market and nonmarket environments, managers are there to measure the impact one has on the other. The issues found in the nonmarket environment are directly related to the market environment of the firm. The nonmarket environment is a little more difficult to control than the market environment, but each firm is aware of the importance of running sufficiently in both aspects in order to be successful. As shown in figure 1-1 (Baron p. 3), the relationship that the nonmarket and market environment has. Market environment determines the significance...
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...Chapter 2 Objectives 1. Explain the importance of analyzing and understanding the firm’s external environment. It is important for a firm to analyze and understand their external environment, because the external environment can pose opportunities and threats. As the firm seeks to gain competitive advantage and above-average returns they are influenced by external environment. The firm needs to understand the segments (demographic, political, global, physical, etc.) with their environment in order to achieve their goal. As more firms enter the market and as technology changes and grow in affects a firm capability of having or maintain competitive advantage, so firms need to have full awareness of what is happening in the external environment. 2. Define and describe the general environment and the industry environment. The general environment could be considered as the outer layer that is widely dispersed and affects organizations indirectly. The general environment is a group of seven environmental segments (demographic, economic, political/legal, sociocultural, technological, global, and physical) which influence an industry and the firms within it. A firm does not directly control the general environment, but by all means firm’s actions are influence by the segments. The industry environment directly influences a firm and its competitive actions and response. A firm response and competitive actions may be influenced by these set of factors: the threat of new entrants...
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...TABLE OF CONTENTS Introduction 1 Internal Environment 2 SWOT Analysis in the Internal Environment 2 Strengths 3 Weaknesses 4 Opportunities 4 Threats 5 Recommendation 5 Conclusion 6 References 7 Introduction SWOT is an acronym used to describe the internal Strengths and Weaknesses of the firm and the environmental Opportunities and Threats. By description, Strengths (S) and Weaknesses (W) are considered to be factors within the control of the firm. Opportunities (O) and Threats (T) are external factors over which the firm has essentially no control. It is the most prominent tool for assessing and analyzing the overall strategic position of the business and its environment. Its main purpose is to ascertain the strategies that will create a firm specific business model that will best align an organization’s resources and capabilities to the requirements of the operating environment. It is the foundation for evaluating the internal potential and limitations and the likely opportunities and threats from the external environment. It examines all positive and negative factors inside and outside the firm that will affect its success. A steady analysis of the environment in which the firm operates aids in predicting the changing trends and includes them in the decision-making process of the organization. If accurately applied, information gained through SWOT analysis can be utilized by the firm to determine its most desirable options in matching...
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...THE EXTERNAL ENVIRONMENT: OPPORTUNITIES, THREATS, INDUSTRY COMPETITION AND COMPETITOR ANALYSIS. “It is not the strongest species that survive, nor the most intelligent, but the one most responsive to change.” Charles Darwin Today, two types of strategies exist: proactive/reactive. Anticipation, change, adaptability is necessary nowadays so the proactive strategy (ex: Coca Cola). External environment conditions create both threats and opportunities for firms that have major implications for their strategic actions. Regardless of the industry, the external environment is critical to a firm’s survival success. The firm’s understanding of the external environment is matched with knowledge about its internal environment to form its vision, to develop its mission and to take actions that result in strategic competitiveness and above-average returns. Factors that can have an impact on business have to be taken in consideration. Companies sometimes have to have strategic scenario in case of an unexpected factors, which can affect the external environment: - The attacks of September 11, - The coalition invasion in Afghanistan in October 2001, - The outbreak of the Severe Acute Respiracy Syndrome (SARS) - The war in Iraq in 2003, - The Madrid (2004) and London (2005) bombings. I. The general, industry and competitor environments. The external environment Demographic Global Industry environment Threat of new entrant Power of suppliers Power of buyers Product substitutes Intensity...
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...External Micro- Environment Micro environment includes those players whose decisions and actions have a direct impact on the company. Production and selling of commodities are the two important aspects of modern business. Accordingly, the micro environment of business can be divided. The various constituents of micro environment are as under: Suppliers of inputs: An important factor in the external micro environment of a firm is the supplier of its inputs such as raw materials and components. Normally, most firms do not depend on a single supplier of inputs. To reduce risk and uncertainty business firms prefer to keep multiple suppliers of inputs. Customers: The people who buy and use a firm’s product and services are an important part of external micro environment. Since sales of a product or service is critical for a firm's survival and growth, it is necessary to keep the customers satisfied. A concern for customers’ satisfaction is essential for the success of a business firms. Besides, a business firm has to compete with rival firms to attract customers and thereby increase the demand and market for its product. Marketing intermediaries: In the firm's external micro environment, marketing intermediaries play an essential role of selling and distributing its products to the final customers. Marketing provides an important link between a business firm and its ultimate customers. Competitors: Different firms in an industry compete with each other for sale...
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...any means – electronic, mechanical, photocopying, recording or otherwise – without the permission of CEIBS The CEIBS Case Centre is sponsored by McKinsey & Company. Dynamic Strategic Alignment CC-307-017 Dynamic Strategic Alignment This note introduces the concepts and frameworks that are commonly used in strategic analysis, integrating them within an on-going process of creating and improving strategic alignment. 1. FUNDAMENTALS The objective of strategic management is to create alignments—within the firm and between the firm and its environment—that give the firm competitive advantage and enable it to achieve its goals. Strategic change, therefore, is fundamentally a decision about what changes to make in order to create or improve alignment that moves the firm closer to its goals. Managers may increase alignment and performance by a) changing elements of the firm, b) changing features of the environment in which operate, or c) shifting to another environment. There will usually be multiple options, and managers must decide which changes are necessary, possible and worth the effort required. When making a change of any type, there will usually be a temporary period of adjustment during which performance may actually drop. If the change was appropriate, however, this should be followed by an increase in competitiveness and performance. Managers may intentionally create mis-alignments as they pursue growth, whether expanding their current activities or diversifying vertically...
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...notE sEriEs EntrEprEnEurship 2011 EntErprisE notE no. 27 Business Environment Perceptions in Afghanistan and Pakistan Judy S. Yang T his note compares business environment perceptions using a unique panel data set of Afghani and Pakistani firms interviewed between 2007 and 2010. Examining the evolution of business climate perceptions within the same group of firms over time allows for a clear picture of how the broad business environment is changing. Firms in both countries are operating in a time of dynamic economic, political, and social changes. However, perceptions of the severity and challenges posed by certain business environment elements differ in the two countries. The World Bank’s Enterprise Analysis Unit surveyed the same group of 319 Afghani firms in 2008 and 2010, as well as a group of 385 Pakistani firms in 2007 and 2010. Survey results show that firm perceptions of the severity and priority of certain business environment elements have changed over time, especially in the areas of electricity, political instability, and corruption. Changes in top obstacle reporting should only be interpreted as changes in what element is currently most relevant to firms. For example, suppose a firm in Afghanistan considers electricity and corruption to be its top two concerns. In 2008, the firm selects electricity as their top obstacle because it is fundamental to daily operations. The firm acquired a generator by 2010, so electricity was no longer a top concern,...
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...external and internal factors that affect the decision in the development of the strategies and the tactics. Environmental scanning implies the process of examining the open system (external environment) and closed system (internal environment), monitoring the results and distributing it to the key managers at the right time and the right place with the required information. For a sound strategic decision to be formalized by the marketers it is very important for the firms to scrutinize their business processes by analyzing the internal and the external environment that it constitutes. Purpose of Marketing Environment Analysis: • Understanding the opportunities and threats is possible by environmental study • Strategic responses to the environment is spotted by the analysis • Examining the environmental factors provide insights into the future perspective of the strategies harnessed. • The favorable and the unfavorable trends and the events can be observed and studied in a methodical manner. • To have a proper balance between the environments and the business units, which include the marketing department which is the core activity that helps the business unit to respond accordingly. SWOT Analysis: This study involves the understanding of the External Environment which includes...
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...marketplace • Solutions: Acquire other businesses and adjust its business Acquire other businesses and adjust its business model to maintain online dominance • Purchase of PayPal, deal with Buy.com allowed eBay to grow and diversify its business di it • Demonstrates IT’s role in the development of eBay’s organization as it expands and makes acquisitions • Illustrates the challenges of maintaining a competitive advantage in a fast-moving, constantly-changing marketplace 3 Organizations and Information Systems • Information technology and organizations influence each another • Complex relationship influenced by organization’s structure, relationship influenced by organization structure business processes, politics, culture, environment, and management decisions This complex two-way relationship is mediated by many factors, not the least of which are the...
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...FUNDAMENTALS OF MARKETING ASSIGNMENT # 2 ------------------------------------------------- ANALYSIS OF FIRM: LEXUS Contents SUMMARY 3 OBJECTIVES: 3 THE FIRM: 3 THE PRODUCT: 3 THE ENVIRONMENT OF LEXUS 4 INTERNAL ENVIRONMENT OF LEXUS: 4 TOP MANAGEMENT: 4 EXECUTIVES AT LEXUS: 5 EMPLOYEES: 5 FINANCIAL ENVIRONMENT: 5 OPERATIONS: 6 EXTERNAL ENVIRONMENT OF LEXUS: 6 CUSTOMERS: 7 COMPETITORS: 7 MEDIA: 7 MARKETING MIX OF LEXUS 8 PRODUCT STRATEGY: 8 PRICING STRATEGY: 8 PROMOTION: 8 PLACEMENT: 9 TARGET MARKET 9 MARKETING SEGMENT 9 SOURCES 10 SUMMARY OBJECTIVES: The aim of this paper is to analyze a firm of choice and study how it has successfully managed to establish itself in the market with the aid of appropriate and effective marketing strategies. The following aspects will be studied: 1. The Environment of the Firm a. Internal Environment b. External Environment c. How these environments affects the firm 2. Define Firm’s Marketing Mix (focusing on any one product) 3. Target Markets d. Which markets does it target? Businesses or Consumers? 4. Define Firm’s Market Segments THE FIRM: The firm chosen for this paper is Lexus. Lexus is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan's largest-selling make of premium cars. Lexus is headquartered in Toyota...
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