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Phoebe Kandiz D.

Garcia Business Policy and Strategy (MNGT 4)
BSA – 4

Instructor: Mr. Roberto V. Guides

1. Describe the concept of environment in the context of strategic management.
Environment, literally means the surroundings, external objects, influences, or circumstances
under which someone or something exists. In an organization, its environment is the aggregate of all
conditions, events and influences that surround and affect it.
Business environment exhibits many characteristics:
 It is complex, environment is a complex phenomenon that is relatively easier to understand in
parts but difficult to grasp in totality.
 It is dynamic, the environment is constantly changing in nature.
 It is multifaceted, the shape and character of the environment depends upon the perception of
the observer
 It has a far – reaching point, the growth and profitability of an organization depends critically on
the environment in which it exists. Any environmental change has an impact on the organization
in several ways.

2. Explain the process of SWOT Analysis.
The business environment can be grouped into internal and external environment. The internal
environment refers to all factors within an organization that impact strengths or cause weaknesses of a
strategic nature. On the other hand, the external environment includes all the factors outside the
organization which yield opportunities or pose threats to the organization.
The four environmental influences could be described as follows:
 Internal environment:
 Strength – an inherent capacity which an organization can use to gain strategic
advantage.
 Weakness – an inherent limitation or constraint which creates strategic disadvantages.
 External environment:
 Opportunity – a favorable condition in the organization’s environment which creates and
enables it to consolidate and strengthen its position.
 Threat – an unfavorable condition which creates risk or causes damage to the
organization.
An understanding of the external environment in terms of opportunities and threats and the
internal environment, in terms of strengths and weaknesses, is crucial for the existence, growth and
profitability of an organization. This systematic approach of understanding the business environment is
referred to as the SWOT Analysis.

3. Name, describe, and exemplify eight environmental factors.
The classification of the general environment into sectors helps an organization comprehend the
different influences operating and relate them to its strategic management. These sectors/factors are as
follows:
 Economic Environment – consists of macro – level factors related to the means of proper
distribution of wealth that have an impact on the business of an organization.
 International Environment – consists of all those factors that operate at the transnational, cross
– cultural or across – the – border level having an impact on the business of an organization.

 Market Environment – consists of factors related to the groups and other organizations that compete with and have an impact on an organization’s markets and business. promotion.  Supplier Environment – factors relating to the cost. Prepare Environmental Threats and Opportunities Profile (ETOP) for an organization. rising income and living standards Market Market is shared by a small number of manufacturers International Global imports and exports are growing Political No political impact Regulatory Regulatory restrictions are heavy but does not create negative impact Socio . forms and functions of such a relationship. issues and expectations of different interested groups. reliability and availability of the factors of production or service that have an impact on the business of an organization. that is the process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business. stable prices of materials/parts . such a monitoring is done through the process of environmental scanning. and learned and shared behavior of groups of human beings having a bearing on the business of an organization.  Regulatory Environment – factors related to planning. ad hoc. the development. 5.  Socio – cultural Environment – related to human relationships within the society. ETO Profile for a Mobile Phone Company Environmental Nature Of Impact Of Each Sector Sectors Impact Economic Growing affluence among consumers. and regulation of economic activities by the government that have an impact on the business of an organization.cultural Treated as a necessity for a better communication among individuals Supplier Stable supply of materials needed. The different sectors of the environment have to be continuously monitored by the strategists for factors that may create opportunities or threats. and processed – form approaches. The approaches used in environmental scanning are the systematic.  Political Environment – consists of factors related to management of factors related to management of public affairs by the state including its institutions and legislations and their impact on the business of an organization.  Technological Environment – those factors related to knowledge applied and the material and machines used in the production of goods and services that have an impact on the business of an organization. The factors to be considered for environmental scanning are events. 4. trends. Describe the process of environmental scanning.

new features are released almost every year .Technological Product innovations ongoing.