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Chapter Titlea
External Environment
15/e PPT
Screen graphics created by: Jana F. Kuzmicki, Ph.D.
Troy University-Florida Region
McGrawHill/Irwin © 2007 The McGrawHill Companies, Inc. All rights reserved.
Understanding the Factors that Determine a Company’s Situation
Diagnosing a company’s situation has two facets
Assessing the company’s external or macro-environment
Industry and competitive conditions
Forces acting to reshape this environment
Assessing the company’s internal or micro-environment
Market position and competitiveness
Competencies, capabilities, resource strengths and weaknesses, and competitiveness
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Fig. 3.1: From Thinking Strategically about the Company’s Situation to Choosing a Strategy
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Fig. 3.2: The Components of a Company’s Macro-environment
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Thinking Strategically about a Company’s Macro-environment
A company’s macro-environment includes all relevant factors and influences outside its boundaries
Diagnosing a company’s external situation involves assessing strategically important factors that have a bearing on the decisions a company’s makes about its
Direction Objectives Strategy
Business model
Requires that company managers scan the external environment to
Identify potentially important external developments Assess their impact and influence
Adapt a company’s direction and strategy as needed
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