Chapter 1 + additional notes

• Environmental scanning


  The process of gathering information about events and their relationships within an organization's internal and external environments
• Environmental scanning


  • Gain a better understanding of nature of changes taking place in the external environment
  • Have a plan in place for unexpected change like covid-19
  • Adapt to trends like traditional shopping vs online shopping
  • Monitoring is necessary to see which factors poses as a threat/opportunity
• Variables


  Changes that often have an impact on the business environment such as technology, innovations (e-commerce), digital marketing, economic fluctuations, new laws
• Where does environmental scanning fit into the strategic planning process?
• Strategic planning process


  • Vision & mission
  • Formulate a strategy
  • Implement strategy
  • Evaluation & control
• Micro environment


  Refers to all elements internal to the business which could affect the overall performance of the business
• Business functions in micro environment

  • General management
  • Purchasing
  • Production
  • Administration
  • Marketing
  • PR
  • HR
  • Financial
• Internal resources


  Factors of production that each department must ensure they obtain
• Business policy


  A set of principles and rules which directs the decisions of the subordinates
• Business culture


  The set of behavioral and procedural norms that can be observed within a company — which includes its policies, procedures, ethics, values, employee behaviors and attitudes, goals and code of conduct
• Business structure

  The purpose is to help the organisation achieve its aims and objectives and employees to complete their work effectively and efficiently
• Market environment


  Businesses offering similar (or identical) products or services in the same market
• Strategic alliance


  An arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project
• Supplier


  A person or business that provides a product or service to another entity. Their role is to provide high-quality products from a manufacturer at a good price to a distributor or retailer for resale
• Consumer


  A customer with a particular buying power and behavior who buys a product or service from the business
• Competitor


  Businesses offering similar (or identical) products or services in the same market
• Industry regulators


  Provide businesses guidelines on how to act to ensure they are operating ethically
• NGO


  Non-governmental organization
• Intermediaries


  Individuals or companies that behave as middlemen between parties for investment deals, business deals, negotiations, insurances, etc
• Porter's 6 forces analysis
• Porter's 6 forces


  • Pharmaceutical company
  • Tesla
• Apple has a high rate of loyal customers, thus bargaining power is low for customers= charge a premium price
• Vegan leather instead of animal leather or milk-based ice creams are being substituted with dairy-free versions
• Apple created iTunes as a complementary product
• Nike supplies threads/shoe laces/shoe parts as complementary products
• Macro environment


  Political stability, trade policy, government policy
• PESTLE


  • Political
  • Economic
  • Social
  • Technological
  • Legal
  • Environmental
• Environmental scanning involves analysing the internal and external environments