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Understanding External Environments in Management

Managers must be aware of a firm's external environment to: 1. Avoid strategic mistakes by being responsive to opportunities and threats. 2. Develop successful products and services that respond to the external environment rather than focus internally on obsolete goods. 3. Thrive by adapting to changes in the external environment rather than clinging to outdated goods no longer demanded.

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Zain Hasan
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48 views1 page

Understanding External Environments in Management

Managers must be aware of a firm's external environment to: 1. Avoid strategic mistakes by being responsive to opportunities and threats. 2. Develop successful products and services that respond to the external environment rather than focus internally on obsolete goods. 3. Thrive by adapting to changes in the external environment rather than clinging to outdated goods no longer demanded.

Uploaded by

Zain Hasan
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1. Why must managers be aware of a firm's external environment?

Being responsive to the external environment enables firms to avoid strategic


mistakes. It is possible for firms to become internally focused, efficient producers
of obsolete goods and services (e.g. buggy whips, carbon paper).Rather,
managers need to respond to opportunities and threats from the external
environment in order to develop the most successful products and services.

7. Explain how the general environment and industry environment are [Link]
can such interrelationships affect the profitability of a firm or industry?
Response:The general environment can affect all of the five forces in various ways.A
growingeconomy can reduce the intensity of rivalry within the industry because firms will
bescrambling to meet growing [Link] Internet, a development in the technologicalsegment,
affects each of the five forces by improving search, problem solving, product/supplier evaluation,
and transactions.
8. Explain the concept of strategic [Link] are the performance implications?
Response:Strategic groups are groups of firms, usually within an industry, that share similar
[Link] performance implications are that firms can group themselves with
closecompetitors and 1) identify barriers between groups, 2) identify positions within theindustry
that are marginal or tenuous, and 3) chart directions for future [Link]
group analysis is a more fine-grained way to conduct industryanalysis, as the competitive
environment of an industry may differ from the competitiveenvironment of the strategic group

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