Lecture 2 – the external environment (class notes)

Understand competition -Can work with competitors, or differentiate

(not competition, not disrupting)

Understand customer needs and trends -Not linear like textbook, it

is cyclical Firms do routine tasks everyday --› should be aware of
environment always Environment is broad --› must look specifically,
environment contains a lot of information, what’s useful as opposed to
just noise? Consider the language --› we control the firm, but
environment means environment of the firm which is not in control of
the firm necessarily (you can try to work around the environment, but
not just change it) We assume we know everything about the firm -›
cannot analyze environment without full knowledge of yourself
External analysis can come first --› but both internal and external
need to be blended and used together to find fit (go back and forth)
Do not analyze environment by itself, must understand the firm
Environment then firm = normal -Target audience is senior director
of firm, so advice needs to be about how to improve firm BASED on
environment -Cyclical, don’t know where to start = firm or
environment -Firm should know how to swim in the fish tank Firm is
at center of approach -Environment = industry (competitors, clients,
customers) -Environment = economy (tech, demo, cultural, legal,
economic) Usually, PEST or Porters but textbook uses Macro-level
analysis and 5 forces (same thing) -Macro first Macro --› things out
of our control but would affect how we operate -Can choose your own
factors Textbook calls it something different but same shit (PEST
but doesn’t call it PEST) -Social, economic, political/legal,
international events (tech, economic)