What Is the Role of Environmental Analysis in Strategic Management?
Strategic environmental analysis refers to the analysis of the external environment and internal conditions faced when formulating an investment strategy, so as to seek opportunities, identify risks, and find advantages and disadvantages. This is the basis and prerequisite for formulating an investment strategy. [1]
Strategic Environmental Analysis
- Strategic environmental analysis refers to the analysis of the external environment and internal conditions faced when formulating an investment strategy, so as to seek opportunities, identify risks, and find advantages and disadvantages. This is the basis and prerequisite for formulating an investment strategy. [1]
- Strategic environmental analysis is
- 1,
Strategic Environmental Analysis Industry Analysis
- Industry analysis is one of the external environments that has a direct impact on business operations. According to the study of American scholar Michael Porter, the research on industrial environment mainly includes 5 aspects.
- I. Research on existing competitors in the industry
- This mainly includes the basic situation of competitors and development trends. [2]
- Research on intruders
- Potential competitors enter the industry and become real competitors. Due to its new business capabilities and abundant funding sources, it will lead to more intense competition in the industry. As a result, product prices may be lowered or the operating costs of practitioners may rise, leading to a decline in industry profits. [2]
- Third, research on alternative products
- Products with the same or similar use value can be replaced in the process of use, and competition may be formed between the enterprises that produce these products. A dumb industry will be threatened once the production of alternatives becomes larger. [2]
- Fourth, the bargaining power of the buyer
- The factors affecting the bargaining power of buyers are mainly
- 1. Is the buyer buying in large quantities?
- 2. What is the proportion of the buyer's business in its purchases?
- 3. Is there a reasonably priced alternative to the product?
- 4. What is the purchase transfer cost borne by the buyer?
- 5. How well does the buyer know the information? [2]
- V. Research on the bargaining power of suppliers
- Many of the production factors required by the company's production are obtained from the outside, and the suppliers who provide these production factors also affect the operation of the enterprise. Suppliers influence the operations of companies in the industry in two ways.
- 1. Is it possible to provide timely, quality and quantity according to the needs of the enterprise.
- 2. Pricing of the factors of production provided. [2]
Strategic environmental analysis competitors
- The essence of the strategy is to gain a lasting competitive advantage over competitors. Therefore, it is necessary to analyze competitors.
- I. Analysis of competitors' long-term goals and strategies
- Analysis of economic and technological strength
- Third, the analysis of operating conditions and financial conditions
- Fourth, the background analysis of leaders and managers [2]