MICRO EXTERNAL ENVIRONMENTAL ANALYSIS

Arranged by:
Paskalis Dioronov Baguna B1034171016

INTERNATIONAL ACCOUNTING

FACULTY OF ECONOMICS AND BUSINESS

TANJUNGPURA UNIVERSITY

2021
Environment

The environment is a strength, a condition of a condition of an interconnected event

where the organization has or does not have the ability to control it, while another definition
says that the environment is defined as everything that is around humans and affects the
development of human life. Meanwhile, environmental analysis is a process of monitoring
the organization's environment that aims to identify opportunities and challenges that affect
the company's ability to achieve its goals.

The external environment can be said to be components or environmental variables

that exist or come from outside the organization or company. These components tend to be
outside the reach of the organization, meaning that the organization or company cannot
intervene in these components. These components are more likely to be treated as something
that is given or something that inevitably has to be accepted, it's just a matter of how the
organization compromises or deals with these components.

Various forces in the environment

a) Newcomer Threat

The threat of new entrants depends on the presence of barriers to entry and the
reactions that can be expected from existing competitors. Some of the barriers to entry
(barriers to entry) include; (a) economies of scale are the cost advantages associated with
large size; (b) product differentiation is the identification of brands creating barriers to entry
by forcing entrants to spend large enough; (c) capital requirements are the need to invest huge
amounts of financial resources, mainly to cover R&D costs; (d) switching costs are one-time
costs incurred by the buyer when he moves from one supplier to another; (e) access to new
entrants' distribution channels may require barriers to entry to secure distribution of their
products; (e) The independence of the cost loss measure is that an established company may
have a cost advantage that is not easily imitated by new entrants; (f) government policy is that
the government can provide a barrier to entry into an industry by applying licensing
requirements and limiting access to raw materials.
b) Competition Among Existing Companies

Competition driven by one company can certainly affect its competitors and may lead
to retaliation for resistance efforts.

C) Threat of Substitute Products or Services

Substitute products appear in different forms, but can satisfy the same needs of other
products.

d) Buyer's Offering Power

Buyers influence the industry through their ability to push down prices, demand better
quality or services, and play a role in competing against one another.

e) Supply Power of Supply

Supply can affect industries by their ability to raise prices or lower the quality of
goods or services purchased.

f) Relative Strength of Other Stakeholders

Stakeholder groups from the work environment include government, trade unions,
local communities, creditors (including suppliers), trade associations, special interest groups
and shareholders. The level of stakeholder interest varies greatly in each industry.

External Micro/Industrial

Identification of micro external environmental factors is the identification of aspects

that affect the ability of the marketing function to serve consumers. This micro external
environmental analysis includes identification of the company's condition, suppliers,
marketing intermediaries, customers, competitors and the public within the industry. Here are
the external micro: Company, Supplier, Marketing Intermediary,Customer, Competitor, and
Public.

Porter’s Five Forces Model

Porter's Five Forces is a model that identifies and analyzes five competitive forces
that shape every industry and helps determine an industry's weaknesses and strengths. Five
Forces analysis is frequently used to identify an industry's structure to determine corporate
strategy. Porter's model can be applied to any segment of the economy to understand the level
of competition within the industry and enhance a company's long-term profitability. 

Porter's Five Forces is a business analysis model that helps to explain why various
industries are able to sustain different levels of profitability. The Five Forces model is widely
used to analyze the industry structure of a company as well as its corporate strategy. Porter's
five forces are:

1. Competition in the industry

2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products

Competitive Profile Matrix (CPM)

The Competitive Profile Matrix (CPM) is a tool that compares a company and its
competitors and reveals their relative strengths and weaknesses.

To better understand the external environment and competition in a given industry,

companies often use CPM. This matrix identifies the company's main competitors and
compares them using industry critical success factors. This analysis also reveals the relative
strengths and weaknesses of the company against its competitors, so that the company will
know, which areas to improve and, which areas to protect.
 The same factors are used to compare companies. This makes comparisons more
accurate. The analysis displays information on a matrix, which makes it easy to compare
companies visually. The results of the matrix facilitate decision making. Companies can
easily determine which areas they should improve, protect or what strategies they should
pursue.

In order to compile the CPM we need to do three steps, below are the steps:

1. Identify critical success factors

2. Set weights and ratings
3. Compare scores and take action
 REFERENCES

1. Makalah Manajemen Stratejik Universitas Mercu Buana, Maulana Syarif

Nurulloh, Nuranisa Auditya, Rini Magfira, Naufal Alwan.
2. Analisis Lingkungan Strategi. Silviansyah Tri Maharani - https://blog.ub.ac.id/
3. Lingkungan Eksternal Mikro Analisis Lingkungan Eksternal - https://text-
id.123dok.com/
4. Perter’s 5 forces - https://www.investopedia.com/
5. CPM - https://www.mochamadbadowi.com/