1. Organizations have both external and an internal environment. The external environment consists of two layers: the general environment and the task environment. General environment is everything outside an organization’s boundaries it’s a set of broad dimensions and forces in an organization’s surroundings that create its overall context—economic, legal, political, socio-cultural, international, and technical forces. For example, McDonald’s general environment—Economic Dimension is moderate economic growth, low unemployment, low inflation, Technological Dimension has improved information technology, and more efficient operating systems, and Political-Legal Dimension—government food standards, local zoning climate, and general posture toward business regulation. Task environment is specific groups and organizations that affect the firm. An organization’s task environment includes its competitors, customers, suppliers, strategic, partners, and regulators. McDonald’s competitors for example are Burger King, Wendy’s, Subway, and more, Suppliers are Coca-Cola, wholesale food processors, packaging manufacturers, Strategic Partner’s are Wal-Mart, Disney, and Foreign Partners and Regulators are Food and Drug Administration, Securities and Exchange Commission, and Environmental Protection Agency. Internal environment are conditions and forces present and at work within an organization such as owners, board of directors, employees, and physical work environment.
2. Ethics is an
The internal environment of any company forms the premise or basis for internal analysis. Internal analysis actually sees manager or business leaders basing their organization's pursuit of "...market opportunities not only on the existence of external opportunities but also on a very sound awareness of their firm's competitive advantages arising from the firm's internal resources, capabilities, and skills" (p.148). Hence, internal analysis sees a close look being taken at the components of a company's internal environment with the aim of improving its competitive edge. The components of a company's internal environment are based on the approach taken to internal analysis. Among the approaches used to identify and analyze the elements
These factors create certain expectations and requirements for organizations, which in turns determine the organization's direction and strategy. Whereas internal environment is made-up of several internal subsystems. Internal subsystems work together systematically and drive the organization in the direction which is in conformity to external environment demands; thereby making the organization effective and a good fit with external environment. (McShane & Steen, 2012, p.6)
When manipulating a business’s strategy, it is important to focus on the external factors in the environment. An external analysis is where a business conducts environmental scanning that present a company with the key external forces influencing the organization. The facets of external forces examined are the business environment, remote environment, or the competitive environment. A business environment is all of the external factors in the general environment that a firm cannot control, but can affect their strategy. The remote environment is the forces that affect most firms. Lastly, a competitive environment is the firm’s specific industry and its entirety. The external analysis is pertinent to a company called Dick’s Drive- In; without it, Dick’s would not be a thriving popular business today.
An organization’s external environment is terribly important and must be studied and understood for the organization to truly succeed. Through such study and understanding, a manager would be able “mitigate threats and leverage opportunities” that are caused by the six segments identified as macro-level external forces: (1) political, (2) economic, (3) sociocultural, (4) technological, (5) ecological, and (6) legal (Rothaermel, 2013, pp. 56-57). Since the manager’s decisions, or firm effects, have a greater impact than those external forces mentioned only when the manager accounts for them and builds a strategy around them, the manager must be aware of and understand these forces to be
Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. Two of the five forces that are the most significant for Capital One would be rivalry among competitors and threat of new entrants. Capital One has addressed rivalry among competitors in the past by getting new customers to keep their percentage level low for the new and existing customers. Also they have credibility among investor to find individual who are at high risk but will have a good potential with handling their credit card. Capital One threat of new entrants was a major concern in the first two to three years of their business. These concerns are now less intense as it has led to a cost advantage that would be impossible for new entrants to replicate. Capital One can approve these two forces going into the future by keeping up with the latest technology, catering to the community so they can continue to get new customers, and continue to come out with other products that will allow the company to grow in other fields.
External environment consists of forces that directly or indirectly influence organization’s business activities. The actors and forces outside marketing that affect management’s ability to build and maintain successful relationship with target customers.
Every organization has to analyze its business environment before making policies and strategies for its day to day operations, marketing and promotional efforts, and competing with the industry rivals (Loudon, Stevens, & Wrenn 2004). The key factors of the business environment that affect the business operations of a company include political, economic, technological, environmental, cultural, and demographical factors. In addition to these factors, an analysis of the competitive forces is also essential in order to assess the potential threats and intensity of rivalry present in the industry (Ritchie & Crouch 2003). If an organization does not give importance to the analysis of its business environment, it may not be able to compete in the industry for a long period of time (Hill & Jones 2007).
There are forces which exist in the General environment with which Brinker International (BI) would have to deal with. Forces such as Economic, Technological, Socio-Cultural, Demographic, Political and Global which exist in the general environment adds another dimension and could affect the organizations day to day operations. Managers would need to consider the impact of these forces.
It is defined as all the forces or conditions that are available within an environment that affects an organization and business. It is also known as controllable factors because business can control them. The internal environment deals with the management of resources like human resources, physical resources, technology, monetary resources and others that constitute the organization in order to implement or execute a strategy. Internal environment also includes culture and other intangible aspects like teamwork, coordination, efficiency level of employees, employee’s salaries and monitoring costs. The strategy for competition should also be in sync with the internal resources especially the internal environment.
PepsiCo Inc. is one of the leading brands in the world's food and beverage industry. It operates globally with a strong customer base and a wide array of products. This paper analyzes the general business environment for this leading food and beverage brand in order to assess what strategies it has been pursuing to operate in this challenging and complex environment. The analysis of internal and external environment has also been done in a view to figure out the biggest strengths, weaknesses, opportunities, and threats for the company. The final section gives an overview of the company's resources, capabilities, core competencies, and value chain which can help it to achieve a competitive advantage in its industry.
In this term of our discussion we’re talking about business environment. It’s like an overview of the whole business environment. Simply environment of a business means the external forces including the business decisions. They can be forces of economic, social, political and technological factors.
The internal environment analysis focuses on current marketing strategy and performance, present and anticipated organizational resources, current and projected cultural and structural issues, and the customer environment. On the other hand, the external environment addressed competition, economic growth and stability, political trends, Legal and Regulatory Issues, technological advancements, sociocultural trends, and the SWOT analysis.
Organizational Environment: those forces outside its boundaries that can impact it. Forces can change over time and are made up of Opportunities and Threats. (7)
Organisations scan environmental information and use it for planning, decision making and control. Organisations transmit information to several internal and external agencies like govt., investors, trade unions and professional bodies. For any organization, the environment consists of the set of external conditions and forces that have the potential to influence the organization. In the case of Subway, for example, the environment contains its customers, its rivals such as McDonald’s and Kentucky Fried Chicken, social trends such as the shift in society toward healthier eating, political entities such as the US Congress, and many additional conditions and forces. It is useful to break the concept of the environment down into two components. The general environment (or macroenvironment) includes overall trends and events in society such as social
As the name suggests, “internal” business environment refers to internal factors and resources that affect the running of the business. This primarily includes the workforce where the employees play a vital role in affecting company’s performance. If a company has well trained or motivated employees, that company is likely to get good output from them. However, if the same company recruits unmotivated employees who do not perform well or dig in their heels when a new plan arrived, this will affect that company’s production levels and ultimately hinder its profitability. Another factor to consider is all the capabilities that a company possesses. The tool used to monitor them is the resource based