Case Study, Stage 1: Business Environment Analysis

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An environmental analysis evaluates internal and external factors affecting an organization's performance, especially its marketing effort. Internal factors are referred to as the strengths and weaknesses of the organization. External factors are opportunities and threats presented by forces outside of the company. In general, this information is used by strategic planners in forecasting trends a year or more in advance. This method is distinct from surveillance, which focuses on a specific area or time. A common synonym for environmental analysis isSWOT analysis, an acronym for strengths, weaknesses, opportunities, and threats. Another equivalent term isenvironmental scanning, referring to the ongoing nature of evaluating trends. In this type of analysis, internal strengths may include a stable workforce, proprietary systems and methods, and other factors. Internal weaknesses may include labor-union problems, obsolete equipment, or aging facilities. External opportunities can include new-market creation, beneficial alliances, and positive trade agreements. External threats may be comprised in part of negative governmental regulations, international conflict, or natural disasters. Using environmental analysis, strategic planners evaluate the operating environment and establish organizational goals. They determine whether or not the goals are obtainable with existing strategies. If they are not, new strategies must be developed or old ones must be adjusted. Several sources of information guide their strategic decisions. 3. THE STRATEGIC FRAMEWORK 3.1 An effective strategy to improve business performance must: • focus on providing services which meet the changing needs of customers; . challenge and improve the effectiveness of structures and processes andmaximise the return on the use of resources; and • ensure that policies achieve the purposes for which they
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