External Environment..

Assalamu’alaikum.. It’s been a long time since I posted my last entry.. I’m a bit busy (lazy actually.. hehe..) today I would like to share about macro-environment.. what is it?? Macro-environment encompasses the broad environmental context in which a company’s industry is situated that includes strategically relevant components over which the firm has no direct control.. PESTEL analysis are the strategically relevant factors in the macro-environment..

This is what PESTEL means..

How can we know the strength of the industry’s competitive forces? We can do that by using the five-forces model of competition..

There are 3 steps to use this analytical tool which are :

1) identify the different parties involved, and the specific factors that bring about competitive pressures.

2) evaluate how strong are the pressures stemming from each of the 5 forces.

3) determine whether the collective strength is conducive to earning attractive profits in the industry.

Have u ever heard about driving forces? It is the major underlying causes of change in industry and competitive conditions.. so, the company should prepare themselves to face the impact of the driving forces.. they can do so by using driving forces analysis which has 3 steps :

1) identify what the driving forces are.

2) assessing whether the driving forces acting to make the industry more or less attractive.

3) determining what strategy changes are needed to prepare for the impact of the driving forces.

The most common drivers of industry change are changes in the long-term industry growth rate, increasing globalization, emerging new internet capabilities and technological changes.

Driving forces vs restraining forces..

Did u know that there are 2 groups of industry rivals positioned in the market? The 1^st one is the strategic group which is a cluster of industry rivals that have similar competitive approach and market positions. This group will having comparable product-line breadth, emphasizing the same distribution channels and offering the same product and services to the buyer..

The 2^nd one is the strategic group mapping.. this is the technique for displaying the different market that rivals firms occupy in the industry.. some of the typical variables used in creating group maps is price and quality range, geographical coverage, product line-breadth and degree of service offered..

I think key success factors (KSFs) also important because it is the strategy elements, product and service attributes, operational approaches, resources, and competitive capabilities that are essential to surviving and thriving in the industry..

How can we know whether the industry outlook conducive to good profitability or not? The anticipated industry environment is fundamentally attractive if it presents a company with good opportunity for above-average profitability and it is unattractive if a firm’s profit prospects are unappealingly low.. industry attractiveness is not the same for all participants.. it depends in large part on whether a company has the resources and capabilities to be competitively successful and profitable in that environment..

Last but not least, i want to share a video.. this video has nothing to do with this topic but it really touched me.. i just want to share it..

ok.. that's all for today.. thank u for visiting my blog.. :)