Chapter 3 : Evaluating Company's External Environment

Assalamualaikum 

Today topic is thinking strategically about a firm's external environment. In this chapter, there are two core concepts which are the macro-environment and PESTEL analysis. Macro-environment is defined an encompassed the broad environmental context. Moreover, there is no direct control because it is the external environment. 

PESTEL analysis focussed on the six principal components of strategic significance in the macro-environment.

P =  Political factors 

E =  Economic condition

S =  Socialcultural forces 

T =  Technological factors

E =  Environmental factors

L =  Legal conditions

The second tool to analysis the industry is the five competitive forces. The Five Competitive Forces are the rival seller, new entrants, substitutes, supplier and customer. It develops by Michael Porter. 

In brief, there are 3 stages that using the five forces model of competition.

 Stage 1 

identify who are the party that involve

Stage 2 

evaluate how strong the pressure

Stage 3

collective strength all of five competitive forces is conducive or not.

Next, strategic group mapping is a technique for displaying the different market that rival firms. Why strategic group? In my opinion, it want to identify our rival. 

Last but not least is Key Success Factors. I think KSF is an element that make industry or company to success.