to identify the key force at work in the immediate or competitive environment and whythey are important .4.Analyse and identify the organization’s position relative to its competitors i.e. from theorganization stands in relation to other organizations who are competing for the saneresources or customers, as itself. The four ways of doing this are:I.Strategic group analysis, which maps organizations in terms of similarities anddissimilarities in the strategies they follow.II.The analysis of market segments, which seeks to establish the segments of markets which might be most attractive.III.Competitor analysis which seeks to obtain information about the strengths andweakness of competitors by market segments.IV.Attractiveness analysis which maps the organization’s competitive position inrelation to the attractiveness of the market(s) in which it operates.5.Analysis the internal environment of the firm with the aim of identifying its strengths andweaknesses.
Undertake SWOT (Strengths, Weakness, Opportunities and Threats) analysis where theunderstanding of the external environments (steps 1 – 4) is specifically related to theorganization and its internal environment (step 5). This is intended to identifyopportunities and threats facing the organization and suggesting how well positioned it isto meet these challenges.
ANALYZING THE FIRMS INDUSTRY AND MACRO ENVIRONMENTS
There are two pats into which a company’s external environment can be divided. They are: Theindustry or micro environment in which the company competes, and The macro environmentwhich affects all industries and companies in the.
I.THE INDUSTRY OR MICRO ENVIRONMENT
This consists of competitors, suppliers, customers and all other forces that directly affector have a direct potential affect or have company’s operation. These are the set of factorsin a particular industry – the threat new entrants, suppliers, buyers, product substitutesand the intensity of rivalry among competitors – that directly influences a firm and itscompetitive actions and responses.
II.THE MACRO OR GENERAL ENVIRONMENT
This consists of the general political, economic, social, demographic, legal, technologicaland ecological frame work within which the industry and the company operate. They arethe broader society that can influence an industry and the firms within it. The figure below