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Thompson−Strickland−Gamble: Crafting and Executing Strategy: Concepts and Cases, 17th Edition I. Concepts and Techniques for Crafting and Executing Strategy 3. Evaluating a Company’s External Environment © The McGraw−Hill Companies, 2010 CHAPTER 3 Evaluating a Company’s External Environment LEARNING OBJECTIVES 1. To gain command of the basic concepts and analytical tools widely used to diagnose a company’s industry and competitive conditions. 2. To become adept at recognizing the factors that cause competition in an industry to be fierce, more or less normal, or relatively weak. 3. To learn how to determine whether an industry’s outlook presents a company with sufficiently attractive opportunities for growth and…show more content…
Strictly speaking, a company’s macroenvironment includes all relevant factors and influences outside the company’s boundaries; by relevant, we mean important enough to have a bearing on the decisions the company ultimately makes about its direction, objectives, strategy, and business model. Strategically relevant influences coming from the outer ring of the macroenvironment can sometimes have a high impact on a company’s business situation and have a very significant impact on the company’s direction and strategy. The strategic opportunities of cigarette producers to grow their business are greatly reduced by antismoking ordinances and the growing cultural stigma attached to smoking. Motor vehicle companies must adapt their strategies (especially as concerns the fuel mileage of their vehicles) to customer concerns about gasoline prices. The demographics of an aging population and longer life expectancies are having a dramatic impact on the business prospects and strategies of health care and prescription drug companies. Companies in most all industries have to craft strategies that are responsive to environmental regulations, growing use of the Internet, and energy prices. Companies in the food processing, restaurant, sports, and fitness industries have to pay special attention to changes in lifestyles,
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