Firms operate in environments that are always changing. To make informed decisions, managers need to understand the forces affecting their organizations, including factors within the firm and forces in the wider world. This lesson introduces strategic analysis and environmental scanning, then explains how internal and external factors shape a firm's competitive environment.
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What is strategic analysis?
The process a firm uses to study and understand its competitive environment.
What is environmental scanning?
Systematic, intentional analysis of a firm's internal state and external competitive environment.
How do external factors differ from internal factors?
External factors arise in the broader environment and are generally outside the firm's control; internal factors include the firm's resources, capabilities, and organization.
How can unemployment affect hiring?
High unemployment may enlarge the applicant pool; low unemployment may make hiring harder and prompt firms to offer higher pay or consider candidates with different qualifications.
How can an inventory system that tracks sales and delivery times support a firm's operations?
It can order replacements as shelf stock runs low, reducing storage and manual tracking costs while helping keep products available.
Quiz questions
What is strategic analysis?Answer: The process of studying and understanding a firm's competitive environment.
What does environmental scanning systematically examine?Answer: A firm's internal state and its external, competitive environment.
Why can strategic analysis help a firm respond to a changing environment?Answer: It helps the firm anticipate possible effects of change and prepare or adapt.
How might low unemployment affect a firm's hiring?Answer: Fewer job seekers may be available, so the firm may offer higher pay or consider candidates with different qualifications.
What is one possible operational benefit of an inventory system that replenishes products as shelf stock runs low?Answer: It can help keep products available while reducing storage needs and manual tracking work.
Based on Principles of Management by David S. Bright, Anastasia H. Cortes, Eva Hartmann, K. Praveen Parboteeah, Jon L. Pierce, Monique Reece, Amit Shah, Siri Terjesen, Joseph Weiss, Margaret A. White, Donald G. Gardner, Jason Lambert et al. (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.