Escolar Documentos
Profissional Documentos
Cultura Documentos
ENVIRONMENT :
Environmental Forces
Presentation by Y. Ratnayake.
BA(Econ); MBA; Dip. in Marketing CIM
UK; Pgraduate Dip. in Project Management;
Dip. in Regional Industrial Development; Dip
in Rural Area Development.
WHAT IS BUSINESS ?
A
System.
Goal driven.
Social entity.
Converting input.
Adding values.
Environmental Forces
Business Environment
Task Environment
Competitive Forces in the Task
Environment
Technological Forces
Political and Legal Forces
The
Organization
and Its
Environments
Additional Dimensions
Political-Legal dimension:
the government
regulation of business and
the general relationship
between business and
government.
International dimension:
the extent to which an
organization is involved in
or affected by business in
other countries.
7
McDonalds
Task
Environment
11
The Ecosystem
There is a renewed commitment to the
environment.
Central Environmental Authority.
International conventions.
3.3
Demographics
Characteristics of a population such as age,
race, gender, ethnic origin, and social class
determine the characteristics of work
groups, organizations, specific markets, or
nations population.
Demographics influence marketing,
advertising, and human resources decisions.
Such as the number of individuals the ages
of 18 to 25
They change all the time.
Cultural Forces
Culture is the shared characteristics,
values, and beliefs of a group that
distinguishes them from another
group
Such as religion, language, and
heritage
3.5
Hofstedes Framework
Power distance
Uncertainty avoidance
Individualism
3.6
Collectivism
Masculinity
Confucian dynamism
3.8
P
L
E
X
few
quite similar to each other
basically the same over time
numerous
not similar to each other
basically the same over time
STABLE
few
somewhat similar to each other
continually changing
Example: Fast-food outlets
numerous
not similar to each other
continually changing
CHANGING
3.6
Environmental Uncertainty
governmental regulations
competition
stability of inputs
demand characteristics
e.g.
Turbulent Environment
Complex, constantly changing
Both ambiguous and unpredictable
3.9
Suppliers
bargaining
power
Rivalry among
existing firms
in industry
Threat of
substitute
goods/services
Buyers
bargaining
power
Competitors
Importance and Effect of Competitors
competitors are an important day-to-day
environmental force facing organizations
rivalry among competitors leads to
price cutting
advertising promotions
enhanced customer service or warranties
improvements in product or service quality
New Entrants
Barriers to Entry:
economies of scale
decrease in per unit costs as volume of
goods/services produced increases
product differentiation
uniqueness in quality, price, design,
brand image, or customer service that
gives a product an edge over the
competition
government regulation
may bar or severely restrict potential new
entrants to an industry
Customers
Potential Effects of Customers
they may drive down prices
push for more or higher-quality products
increase competition among sellers by
playing one against each other
Integration
Purchasing or developing related business units
thought of as facing the customer
Customers cont...
Exhibit Bargaining Power to the Extent that:
they purchase a large volume relative to the
suppliers total sales
the product/service represents a significant
expenditure by the customer
they pose a realistic threat of backward integration,
for example: the purchase of one or more of its
suppliers
they have readily available alternatives for the same
services/products
Suppliers
Bargaining Power of Suppliers
often controls how much they can :
raise prices above their costs
reduce the quality of goods and services
Impact of Technology
What is technology?
knowledge, tools, techniques, and actions
used to transform material , information, and
other inputs into finished goods and services