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EXTERNAL ENVIRONMENT

What company might chose todo?????

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ECONOMIC

TECHNOLOGICAL

INDUSTRY ENV

New Entry

Power Of

Supplier

Power of Buyer

Substitute

Competitor

Environment

SOCIOUCUTURE

GLOBAL

DEMOGRAPHIC

POLITICAL

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General Env. is composed of elements in thebroader society that influence an industry and

the firm within it.

Demographic :

1. Population Size : India + China = @35%World Population

2. Age structure

3. Income distribution: Standard, Purchase Power

4. Geographic distribution: Relocation of businessfirm on basis of degree of support by govt.

Ex.. Asian paints moving from MUMBAI TOTALOJA etc.

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Economic Segment : Nature and direction

of economy in which firm competes1. Interest Rate

2. Personal Saving Rate

3. Business Saving Rate4. Gross Domestic Product

Political Segment :

1. Taxation Law

2. Educational Policies

3. Labor training laws etc

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Socioculture Segment : Concerned with society

attitudes and cultural values.1. Woman in Workforce : Number of female

worker indication of workforce diversity.

Japan 44% of woman workforce

1. Shifts in worker2. Attitude towards work

Technology Segment : Includes institutions andactivity involved with creating new knowledgeand product,process and material

1. Product Innovation

2. R & D

3. New Communication Tech

4. Application knowledge

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Global Segment :

1. Political Event

2. Global Market

3. Different culture etc.

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Industry Environment :

FIVE FORCES MODEL OF COMPETITION

1. Threat of New Entry :Technology, Capital Requirement

2. Bargaining Power of suppliers :

Substitute product not available

Suppliers are credible threat to integrateforeword into the buyers industry.

3. Bargaining Power of Buyers :

May switch to another product,company at

little cost Backward Integration : Reliance,Asian Paints. Etc

4. Threat Of substitute Products : Diesel to Bio-Diesel, PET BOTTLES TO GLASS BOTTLES

5. Rivalry among competition : Price,Quality andinnovation

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Competitor Analysis :Competitor intelligence : Gathering of data abt. competitors

objective, strategies, assumption & capabilities.

Component :

Future Objective :

How do our goals compare with competitor goals ?

Where will emphasis be placed in future ?What is attitude towards risk?

Current Strategy :

How we are currently Competing ?

Does strategy support changes?

Assumptions :Do we assume future will be volatile?

What assumption our competitor holds?

Capabilities :

Strength and weakness

Compare with competitor

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RESPONSE :

What will our competitor will do in future?Where do we have advantage over our competitor?

How will this change our relationship with competitor?

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THANK YOU