using table 3.1 and 3.2 and the exercise for simulation participants on page 79 of your textbook, discuss the external factors most relevant for your company. Company is Organic Coffee and Beverages in Orangeburg, SC. using table 4.2 and 4.3 and the exercise for simulation participants (#3, 4, 5) on page 118, evaluate your companys strengths, weaknesses, resources, capabilities and compatitiveness.
here is the textbook info.
TABLE 3.1 The Six Components of the Macro-Environment
ComponentDescriptionPolitical factorsPertinent political factors include matters such as tax policy, fiscal policy, tariffs, the political climate, and the strength of institutions such as the federal banking system. Some political policies affect certain types of industries more than others. An example is energy policy, which clearly affects energy producers and heavy users of energy more than other types of businesses.Economic conditionsEconomic conditions include the general economic climate and specific factors such as interest rates, exchange rates, the inflation rate, the unemployment rate, the rate of economic growth, trade deficits or surpluses, savings rates, and per-capita domestic product. Some industries, such as construction, are particularly vulnerable to economic downturns but are positively affected by factors such as low interest rates. Others, such as discount retailing, benefit when general economic conditions weaken, as consumers become more price-conscious.Sociocultural forcesSociocultural forces include the societal values, attitudes, cultural influences, and lifestyles that impact demand for particular goods and services, as well as demographic factors such as the population size, growth rate, and age distribution. Sociocultural forces vary by locale and change over time. An example is the trend toward healthier lifestyles, which can shift spending toward exercise equipment and health clubs and away from alcohol and snack foods. The demographic effect of people living longer is having a huge impact on the health care, nursing homes, travel, hospitality, and entertainment industries.Technological factorsTechnological factors include the pace of technological change and technical developments that have the potential for wide-ranging effects on society, such as genetic engineering, nanotechnology, and solar energy technology. They include institutions involved in creating new knowledge and controlling the use of technology, such as R&D consortia, university-sponsored technology incubators, patent and copyright laws, and government control over the Internet. Technological change can encourage the birth of new industries, such as the connected wearable devices, and disrupt others, such as the recording industry.Environmental forcesThese include ecological and environmental forces such as weather, climate, climate change, and associated factors like water shortages. These factors can directly impact industries such as insurance, farming, energy production, and tourism. They may have an indirect but substantial effect on other industries such as transportation and utilities.Legal and regulatory factorsThese factors include the regulations and laws with which companies must comply, such as consumer laws, labor laws, antitrust laws, and occupational health and safety regulation. Some factors, such as financial services regulation, are industry-specific. Others, such as minimum wage legislation, affect certain types of industries (low-wage, labor-intensive industries) more than others.
As company managers scan the external environment, they must be alert for potentially important outer-ring developments, assess their impact and influence, and adapt the company’s direction and strategy as needed. However, the factors in a company’s environment having the biggest strategy-shaping impact typically pertain to the company’s immediate industry and competitive environment. Consequently, it is on a company’s industry and competitive environment that we concentrate the bulk of our attention in this chapter.
TABLE 3.2 Common “Weapons” for Competing with Rivals
Types of Competitive WeaponsPrimary EffectsDiscounting prices, holding clearance salesLowers price (P), increases total sales volume and market share, lowers profits if price cuts are not offset by large increases in sales volumeOffering coupons, advertising items on saleIncreases sales volume and total revenues, lowers price (P), increases unit costs (C), may lower profit margins per unit sold (P − C)Advertising product or service characteristics, using ads to enhance a company’s imageBoosts buyer demand, increases product differentiation and perceived value (V), increases total sales volume and market share, but may increase unit costs (C) and lower profit margins per unit soldInnovating to improve product performance and qualityIncreases product differentiation and value (V), boosts buyer demand, boosts total sales volume, likely to increase unit costs (C)Introducing new or improved features, increasing the number of styles to provide greater product selectionIncreases product differentiation and value (V), strengthens buyer demand, boosts total sales volume and market share, likely to increase unit costs (C)Increasing customization of product or serviceIncreases product differentiation and value (V), increases buyer switching costs, boosts total sales volume, often increases unit costs (C)Building a bigger, better dealer networkBroadens access to buyers, boosts total sales volume and market share, may increase unit costs (C)Improving warranties, offering low-interest financingIncreases product differentiation and value (V), increases unit costs (C), increases buyer switching costs, boosts total sales volume and market share
Table 4.2 Types of Company Resources
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