External Environment |
The External Environment section includes the following categories: Market Industry, Specific Competition, Economic Environment, Social & Cultural, Population & Demographics, Legal & Regulatory & Political, Technological Environment, International Environment, and Moral & Ethical. The essential questions and corresponding tools can be found below. In addition, tools and models highlighted in turquoise lead to an external link for more information.
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Market Industry
Essential Questions• Who has the power?
-To what degree is that power spread among firms? • What are our critical success factors? • What are the industry imperatives? |
Tools/Models |
Specific Competition
Essential Questions• Who are the direct competitors?
- How do we compete effectively against these competitors? • What is our competitive advantage? • How are we similar to our competitors? - When we make a strategic decision, how will our competition most likely react and take action? |
Tools/Models• Position Map
• 4 Ps Matrix (Rosenthal Model) |
Economic Environment
Essential Questions• What is the current state of the economy?
- How does the economy affect our business? • Is there a demand for our type of product? - Is the demand for our product elastic or inelastic? - What makes our product able to transition from a luxury good to more of a necessity or vice versa? |
Tools/Models• The Demand Curve
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Social & Cultural
Essential Questions• What is the overall perception of our product?
- How does the local demographic view our product? • What is the current culture and social stance surrounding our product? - Does our product go with or against any cultural values? - How do we position our product based on the current cultural trends? • What norms are associated with our product? • Does our product relate to any current social issues? • Does our product result in any negative externalities? |
Tools/Models• Concepts of Social Responsibility Model
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Population & Demographics
Essential Questions• What is the size of our population?
- What are some characteristics of the overall population? • What are the major population sub groups? - What is the specific population we are focusing on and why? - What are the major demographic characteristics associated with our product? |
Tools/Models• High vs. Low Context Culture Model
• Family Life Cycle |
Legal, Regulatory, & Political
Essential Questions• Are there any conflicts of interest?
• Who are the major centers of influence? • Is our industry within a large political topic? • What are our legal and regulatory limits? - Are there any federal or state regulations related to our processes or product? - Are there any precedencies to be aware of with this product? - What are the consequences for breaking a rule? • How do we mitigate current risks? |
Tools/Models |
Technological Environment
Essential Questions• What technological imperatives exist?
• What are the plausible sources for industry growth? • What types of technology exist? - How fast is technology changing in this environment? - What is the newest technology available? - How accessible is the technology to us and to our competitors? - What are the switching costs? - How are viral marketing strategies applied to our product? |
Tools/Models• Vector Model
• Viral Marketing Model |
International Environment
Essential Questions• Do we need to go international with our product?
- What are the advantages and disadvantages of entering the global market? • Are our competitors involved internationally? - Have they been successful internationally? - What strategies have our competitors used internationally? • Are there barriers to entry in the global market? - How do laws and regulations change by country? • How does the international environment change? - Are there major differences occurring from market-to- market, or are they based on a global scale? - What differences will create stresses for us? |
Tools/Models• International Product Life Cycle
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Moral & Ethical
Essential Questions• What is ethical behavior in our eyes and how do we
display it? • Are we being socially responsible with our product? - Are we teaching others good values through our product? - Are our actions promoting environmental sustainability? - Does our product and service meet our ethical standards? • Who are the relevant stakeholders? - Do any moral/ethical conflicts exist? - How would poor ethical decisions affect our stakeholders? - What are the obligations to each stakeholder? • How do we address ethical and moral issues externally? - How do we address these concerns internally? |
Tools/Models |