Analyzing the external environment of the firm

Resumen Capitulo 2 ANALYZING THE EXTERNAL ENVIRONMENT OF THE FIRM

este resumen estará en inglés.

Learning From mistakes

In china a big company of new cellphones, Razr was dominating the asian market, By this grow many enterprises begun top put his eyes on this emerging market. Big enterprises like Sony-ericcson, Nokia, Samsung, Motorola and LG decided to enter in the chinese markets. Theresult was awful, his grows was very low except by Motorola and Razr, the reason was that many customers love the good locking design of the LG cells, and that was an very important point. In china there was an fashion bout the cells with a futurist design. Those design were present in the Motorola and Razr cells. By many surveys the other enterprises begun to realize the problem and quicklystarted to develop his design in order to compete in the Chinese market.

With this example we realize how important it’s to be aware of the changes in the market, we have to know (as an organization) all the factors and tendencies related with our organization,

To do this it´s necessary to : CREATE AN ENVIRONMENTALY AWARE ORGANIZATION

This process of creation implies three roles inside theenvironmentally aware organization, all of these three have the objective of gather enough information to make a good forecast.

- Scanning

- Monitoring FORECASTING

- Competitive intelligence

SCANNING or ENVIRONMENTAL SCANNING

It’s make an surveillance of the external environment in order to Identify trends and his changes and predict his behaviors.

For an organization it’sexpensive to set up a scanning system so the most efficient way to do these tasks it’s to outsource this task to another enterprise. This will provide high quality information and at a low cost. As an example we take A.T. Kearney an consultant enterprise who identify that the trends like:

- Globalization.- that offers new opportunities, emerging markets etc. Similarities between markets, wayof makes business, economy dynamics etc.

- Time to the market.- this is how a product gets to the international markets and the time of obtain a feedback from it.

To be aware and scan some changes in the external environment you can:

Listen.- ask to the customers about suggestions and what they expect for next.

Pay attention.- read publications related to your industry or business,this in order to be aware of the changes in technology, customers preferences, ideal market etc.

Follow trends on-line. Pages like trenhunter.com or jwtintellingence.com are pages that can offer the latest information related with trends, fashion and other tendencies related with your customers

Go old school.- make surveys, ask to your customers what they think about your product, make focusgroups and use other traditional ways to gather information.

ENVIRONMENTAL MONITORING

Once that you have identified the trends you have to monitor the changes of it. You have to track the changes and the evolution of the trends, for example jhonson & Jhonson Medical Products keeps an intense track of the growing of the GDP percentage invested in hospitals, numbers of active beds in hospitaletc. This in order to be one step forward ahead the changes in this areas.

COMPETITIVE INTELLIGENCE

Develop an competitive intelligence its collecting information of the industry and competitors, then we have to analyze this information, identify our strengths and weaknesses in order to develop an strategy.

Those roles are very important, if an company doesn’t take advantage of them, theresults can be very costful. For example the “encyclopedia Britannica”, many years ago one example of this encyclopedia cost 2000 USD, three years ago you could buy the Encarta Encyclopedia in 15 USD, now you got all the information of the world in internet. This changes in technology meant the bankrupt of many business. And the anticipation to them are vital for the success of the company....