Chapter Three : EVALUATING A COMPANY'S EXTERNAL ENVIRONMENT

Assalamualaikum ^_^

Okay, in this week we learnt about the evaluating a company’s external environment. This topic describes about the PESTEL and the Porter's Five - Forces .

PESTEL

Here, I'm explain detail about the PESTEL analysis.

• P ( Political )  factors are basically to what degree the government  intervenes in the economy. Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability.

• E ( Economic ) factors include economic growth, interest rates, exchange rates and the inflation rate.These factors have major impacts on how businesses operate and make decisions.

• S ( Social ) factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. 

• T ( Technological )  factors include technological aspects such as R&D  activity, automation, technology incentives and the rate of technological change.They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. 

• E ( Environmental )  factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance.

• L ( Legal ) factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.

Porter's Five - Forces

Porter five forces analysis is a framework for industry analysis and business strategy development. It draws upon industrial organization ( IO ) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit.

Three of Porter's five forces refer to competition from external sources. The remainder are internal threats.

Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. As an industry, profitability is low and yet individual companies, by applying unique business models, have been able to make a return in excess of the industry average.

Porter's five forces include :

 Three forces from 'horizontal' competition,

1. The threat of substitute products or services
2.  The threat of established rivals
3. The threat of new entrants

 Two forces from 'vertical' competition,

1. The bargaining power of suppliers
2.  The bargaining power of customers.

Hope with my explanation about the PESTEL and Porter's Five-Forces can help all of you to understand about them. Thank you for reading :D

Chapter Two : NATURE & VISSION AND MISSION

Hye everyone ! :)
We meet again in this entry. So, this week we are not learned only one topic, but TWO topic okay. So nice :)
First topic is about The Nature Of Strategic Management and the second topic is about The Business Vission and Mission. 

Okay, for the first topic we have learned about the stages of strategic management. It have three stages which is :

• Strategy Formulation - developing a vision and mission and also determining internal strengths and weaknesess, external opportunities and threats ( SWOT Analysis )

•  Strategy Implementation - establish annual objectives, devise policies, motivate employees, and allocate resources.
• Strategy Evaluation -  external and internal factors, measuring performance, and taking corrective actions.

For the second topic, we have learned about the vission and mission. 

• Vision should be short, one sentence and should have input into developing the statement.
• Mission is an essential for effectively establishing objectives and formulating strategies. 

So, this is all in week 2. Hope you all will enjoy when reading this entry. Thank you :)

FIRST WEEK :)

Assalamualaikum

Hye guys ! :) Ok, this is first time I join the blog. So I dont know how to handle it. But, it's okay. I will improve it and learn from the blogger, maybe :)

First of all, I want to tell you guys about my first class in new semester. Yeahhh !! Class STRATEGIC MANAGEMENT ! :) I feel this class is very exciting because the lecturer is good in teaching. I feel it. Alhamdulillah.

So, for the first class, she do the game which is  build the tower within 10 minutes. She give us only 10 minutes to built the tower.The longest tower is the winner. Andddd finally, only 1 group succeed in this game. 

As I can conclude in this game, the lessons that I get are it can foster the spirit of cooperation in

group. Other than that is can uncovering the creativity of each member of the group. Last but not least, with do this game, it can embedding the nature of compromise and helping among members.

Lastly, I hope the class of strategic management will be the best in this semester. And Inshaallah I want to get A in this subject ! :'D Miss ummi, please help us. Thank you for reading this entry guys.

My Miss Ummi  <3

* Sorry if my language is not fluently. So bad. Forgive me. Hehe :D

SAYANG MISS UMMI

Hye! Hope this blog can help me to make me good in writing. *Eh kena mengena ke dgn subjek ni? Haha takpe. Bye!  :'D