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The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

STUDY
PLAY
General Environment
Composed of dimensions in the broader society that influence and industry and the firms within it
Industry Environment
The set of factors that directly influences a firm and its competitive actions and competitive responses
Porter's Five Forces
The threat of new entrants, the power of suppliers, the power of buyers, the threat of substitutes, and the intensity of rivalry among competitors
Opportunity
A condition in the general environment that if exploited effectively, helps a company achieve strategic competitiveness
Threat
A condition in the general environment that may hinder a company's efforts to achieve strategic competitiveness
Scanning
Entails the study of all segments in the general environment
Monitoring
Analysts observe environmental changes to see in an important trend is emerging from among those spotted through scanning
Forecasting
Analysts develop feasible projections of what might happen, and how quickly, as a result of the changes and trends detected through scanning and monitoring
Assessing
Determines the timing and significance of the effects of environmental changes and trends that have been identified
Demographic Segment
Concerned with a population's size, age structure, geographic distribution, ethnic mix, and income distribution
Economic Environment
Refers to the nature and direction of the economy in which a firm competes or may compete
Political/Legal Segment
The arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding interactions among nations as well as between firms and various local governmental agencies
Sociocultural Segment
Concerned with a society's attitudes and cultural values
Technological Segment
Includes the institutions and activities involved with creating new knowledge and translating that knowledge into new outputs, products, processes, and materials
Global Segment
Includes relevant new global markets, existing markets that are changing, important international political events, and critical cultural and institutional characteristics of global markets
Physical Environment Segment
Refers to potential and actual changes in the physical environment and business pracitces that are intended to positively respond to and deal with those changes
Industry
A group of firms producing products that are close substitutes
Strategic Group
A set of firms that emphasize similar strategic dimensions and use a similar strategy
Competitor Intelligence
The set of data and information the firm gathers to better understand and better anticipate competitors' objectives, strategies, assumptions, and capabilities
Complementors
Companies or networks of companies that sell complementary goods or services that are compatible with the focal firm's good or service