~EVALUATING A COMPANY'S EXTERNAL ENVIRONMENT~

NUR FILZAH BT SULAIMAN

TMA 2 

1110820

MGB4013 STRATEGIC MANAGEMENT

Dr. Syadiyah was talking about communism before we start our lecture. what is a communism? It is actually about an ideological thinking, that actually they want to liberate Malaysia from be accused of being a colonial.  After that, we learned chapter 3, which is about Strategy External Environment.

What we must do ?

Firstly, we have to thinking strategically about a firm's external environment. 

Second, form a strategic vision of where the firm needs to head.

Third, identify promising strategic options for the firm.

Lastly, select the best strategy and business model for the firm.

CORE CONCEPT:

- Macro-environment -) encompasses the broad environmental context in which a company's industry is situated that includes strategically relevant components over which the firm has no direct control. 

- Pestel analysis -) actually pestel analysis focuses on SIX (6) principal components of strategic significance in the macro-environment. ( What are the strategically relevant factors in the macro-environment ? )

• political : tax policy, fiscal policy, tariffs, political climate, and the strength of institutions such as federal banking system. 
• economic : interest rates, exchange rates, unemployment rates, also include conditions in the markets for stocks and bonds. 
• social : societal values, attitudes, cultural factors and lifestyle, demographic factors such as population size, growth rate and age distribution.
• technological : such as genetic engineering and nanotechnology, patent and copyright laws, and the government control over the internet.
• environmental : such as weather, climate, climate change, and associated factors like water shortage. 
• legal : consumer laws, labor laws, antitrust laws, and occupational health and safety regulation.

The Five (5) competitive forces ( How strong are the industry's competitive forces ? ) :

1. Rival sellers.
2. New entrants.
3. Substitute products.
4. Supplier bargaining power.
5. Customer bargaining power.

How to use the Five-Forces ?

Step 1 : Identify the different parties involved, and the specific factors that bring about competitive pressures.

Step 2 : Evaluate how strong the pressures stemming from each of the five forces.

Step 3 : Determine whether the collective strength of all five competitive forces is conducive to earning attractive profits in the industry.

Step 4 : Lastly, we do a conclusion. 

Competitive Pressures that Increase Rivalry among Competing Sellers.

Figure 3.4 Factors Affecting the Strength of Rivalry