week 3

EVALUATING A COMPANY’S EXTERNAL ENVIRONMENT

For today lecture, Dr Ummi teach us on chapter three. In brief, this chapter is about 'thinking strategically about a firm's external environment'.

There are two core concept in this chapter which are  macro-environment and PESTEL. Macro-environment means encompasses the broad environmental context. Moreover, there is no direct control to Micro-environment.

If, the question ask, what are the strategically relevant factors in the macro-environment? then the answer should be PESTEL! then you might wanna ask, what is PESTEL? PESTEL is

P                    = Political factors

E                   = Economic conditions

S                    = Sociocultural forces    

T                   =Technological factors

E                   =Environmental factors

L                   = Legal conditions

Another subtopic is 'how strong are the industry's competitive forces?'. The answer could be never the same from one industry to another. This can be known by using FIVE COMPETITIVE FORCES. 

Those competitive forces are :

a) Competition from rival sellers

b) Competition from potential new entrants

c) Competition from producers of substitute product
d) Supplier bargaining power
e) Customer bargaining power

Check out this video, and you will understand deeper. :)
http://www.youtube.com/watch?v=xOCt3knEdRs