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External Environment Analysis Overview

The document summarizes the key elements of the external environment that influence a company: 1. Demographic factors like population size, age structure, income distribution, and geographic distribution affect customer base and location decisions. 2. Economic conditions like interest rates, GDP, and savings rates shape the business climate. 3. Sociocultural trends in areas like women in the workforce, attitudes towards work, and diversity impact hiring and marketing. 4. Technological innovations in areas such as R&D, products, communication, and applications can create opportunities or threats. 5. Political factors such as taxation, education policies, and labor laws influence operations. Global events also impact multinational companies.

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Nikita Bagul
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53 views10 pages

External Environment Analysis Overview

The document summarizes the key elements of the external environment that influence a company: 1. Demographic factors like population size, age structure, income distribution, and geographic distribution affect customer base and location decisions. 2. Economic conditions like interest rates, GDP, and savings rates shape the business climate. 3. Sociocultural trends in areas like women in the workforce, attitudes towards work, and diversity impact hiring and marketing. 4. Technological innovations in areas such as R&D, products, communication, and applications can create opportunities or threats. 5. Political factors such as taxation, education policies, and labor laws influence operations. Global events also impact multinational companies.

Uploaded by

Nikita Bagul
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

EXTERNAL ENVIRONMENT

What company might chose to


do?????

1
ECONOMIC

INDUSTRY ENV
SOCIOUCUTURE
New Entry
DEMOGRAPHIC
Power Of
Supplier
Power of Buyer
Substitute

POLITICAL Competitor GLOBAL


Environment

TECHNOLOGICAL 2
 General Env. is composed of elements in the
broader society that influence an industry and
the firm within it.

Demographic :
1. Population Size : India + China = @35%
World Population
2. Age structure
3. Income distribution: Standard, Purchase Power
4. Geographic distribution: Relocation of business
firm on basis of degree of support by govt.
Ex.. Asian paints moving from MUMBAI TO
TALOJA etc….
3
Economic Segment : Nature and direction
of economy in which firm competes
1. Interest Rate
2. Personal Saving Rate
3. Business Saving Rate
4. Gross Domestic Product

Political Segment :
1. Taxation Law
2. Educational Policies
3. Labor training laws etc

4
Socioculture Segment : Concerned with society
attitudes and cultural values.
1. Woman in Workforce : Number of female worker
indication of workforce diversity.
Japan 44% of woman workforce
1. Shifts in worker
2. Attitude towards work

Technology Segment : Includes institutions and


activity involved with creating new knowledge and
product,process and material
1. Product Innovation
2. R&D
3. New Communication Tech
4. Application knowledge
5
Global Segment :
1. Political Event
2. Global Market
3. Different culture etc.

6
Industry Environment :
FIVE FORCES MODEL OF COMPETITION
1. Threat of New Entry :
Technology, Capital Requirement
2. Bargaining Power of suppliers :
Substitute product not available
Suppliers are credible threat to integrate
foreword into the buyers industry.
3. Bargaining Power of Buyers :
May switch to another product,company at little
cost Backward Integration : Reliance, Asian
Paints. Etc
4. Threat Of substitute Products : Diesel to Bio-
Diesel, PET BOTTLES TO GLASS BOTTLES
5. Rivalry among competition : Price,Quality and
innovation
7
Competitor Analysis :
Competitor intelligence : Gathering of data abt. competitors
objective, strategies, assumption & capabilities.
Component :
Future Objective :
How do our goals compare with competitor goals ?
Where will emphasis be placed in future ?
What is attitude towards risk?
Current Strategy :
How we are currently Competing ?
Does strategy support changes?
Assumptions :
Do we assume future will be volatile?
What assumption our competitor holds?
Capabilities :
Strength and weakness
Compare with competitor 8
RESPONSE :
What will our competitor will do in future?
Where do we have advantage over our competitor?
How will this change our relationship with competitor?

9
THANK YOU

1
0

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