1 Running head: Analyzing the External Environment of the Firm Analyzing the External Environment of the Firm 2 Analyzing the External Environment of the Firm BADM 624-20 Competitive Strategy Maham Bilal University of the Cumberlands Discussion 2 – Analyzing the External Environment of the Firm It is important to follow the right strategy to be able to forecast correctly. There are three steps to forecasting which have been identified (Dess et al., 2021). The very first in environmental scanning which involves observation of the external environment to note key changes and the cause for those changes (Dess et al., 2021). The second step is called environmental monitoring which is the following of trends that may occur or other important events such as the introduction of a new technology which may impact the business (Dess et al., 2021). It aids them to spot upcoming threats and opportunities quickly and to remain up to date. The last important aspect is competitive intelligence (Dess et al., 2021). By understanding our competitor’s companies can get essential foresight and may even be able to predict their competitors next strategy. This can help detect unethical or destructive behavior and helps the form avoid surprises. There are certain factors that a business may not be able to control. these include the demographics, political legal structure and the economic environment that all shape the industry (Dess et al., 2021). The porter five forces are a way of understanding the competitive environment of a firm and to determine power they have to make certain changes and what decisions may have a negative impact. This tool looks at the bargaining power of suppliers and customers (Dess et al., 2021). If there is variety of products and a number of competitors, the customers hold greater power. If there is limited supply of resources than the suppliers are able to get a better deal as they have the higher power. Similarly, if our product is something that can be easily substituted it is under threat and in order to stand out differentiation is necessary as well so developing a loyal consumer base. Businesses decide to focus on specific niece products for this reason and they are able to tap into New markets (Dess et al., 2021). Lastly the threat of potential new entrants must be assessed as an industry that is easier to enter will have more and more substitute products which will make competition intense. A trend identified in the education sector is the shift of students from traditional form of study to digital. Universities are starting to see a decline in enrolments for traditional students as the line between in class and virtual study is blurred. People are favoring flexibility and the value for a virtual class is now almost similar (Best Colleges, 2020). As businesses are keen to hire people based on skill students who are able to manage work and study are becoming important. Resources include an ed.

1. 1
Running head: Analyzing the External Environment of the Firm
Analyzing the External Environment of the Firm 2
Analyzing the External Environment of the Firm
BADM 624-20 Competitive Strategy
Maham Bilal
University of the Cumberlands

2. Discussion 2 – Analyzing the External Environment of the Firm
It is important to follow the right strategy to be able to forecast
correctly. There are three steps to forecasting which have been
identified (Dess et al., 2021). The very first in environmental
scanning which involves observation of the external
environment to note key changes and the cause for those
changes (Dess et al., 2021). The second step is called
environmental monitoring which is the following of trends that
may occur or other important events such as the introduction of
a new technology which may impact the business (Dess et al.,
2021). It aids them to spot upcoming threats and opportunities
quickly and to remain up to date. The last important aspect is
competitive intelligence (Dess et al., 2021). By understanding
our competitor’s companies can get essential foresight and may
even be able to predict their competitors next strategy. This can
help detect unethical or destructive behavior and helps the form
avoid surprises. There are certain factors that a business may
not be able to control. these include the demographics, political
legal structure and the economic environment that all shape the
industry (Dess et al., 2021). The porter five forces are a way of
understanding the competitive environment of a firm and to
determine power they have to make certain changes and what
decisions may have a negative impact. This tool looks at the
bargaining power of suppliers and customers (Dess et al., 2021).
If there is variety of products and a number of competitors, the
customers hold greater power. If there is limited supply of
resources than the suppliers are able to get a better deal as they

3. have the higher power. Similarly, if our product is something
that can be easily substituted it is under threat and in order to
stand out differentiation is necessary as well so developing a
loyal consumer base. Businesses decide to focus on specific
niece products for this reason and they are able to tap into New
markets (Dess et al., 2021). Lastly the threat of potential new
entrants must be assessed as an industry that is easier to enter
will have more and more substitute products which will make
competition intense. A trend identified in the education sector
is the shift of students from traditional form of study to digital.
Universities are starting to see a decline in enrolments for
traditional students as the line between in class and virtual
study is blurred. People are favoring flexibility and the value
for a virtual class is now almost similar (Best Colleges, 2020).
As businesses are keen to hire people based on skill students
who are able to manage work and study are becoming important.
Resources include an education and government census that
track how many people are enrolled to a school and what
program which makes it easier to note the change (Best
Colleges, 2020).

4. References
Best colleges. (2020). Retrieved from
https://www.bestcolleges.com/research/annual-trends-in-online-
education/
Dess, G., McNamara, G., Eisner, A., & Lee, S. H. (2021).
Strategic Management: Creating Competitive Advantages (10th
edition). McGraw-Hill Higher Education
Running head: WEEK 2 REFLECTION AND DISCUSSION
1
Week 2 Reflection and Discussion
Ivana Kazic
Dr. Larry Parker
BADM 624 Competitive Strategy
University of the Cumberlands
May 14, 2020

5. After reading this week’s material the term that I found to be
the worthiest of my understanding and useful in my future work
is competitive intelligence. Competitive intelligence refers to
the company’s efforts to collect and interpret the data they can
find on competitors, which then they will use to identify their
strengths and weaknesses, but also the efforts to understand the
industry that they are in (Dess, McNamara, Eisner, & Lee,
2021). The reason I found this particular item to be very
important is because I believe that in order to beat the
competition, you need to understand the competition and their
strategy. Furthermore, knowing the strengths and weaknesses of
the competitors simultaneously creates opportunities for the
company itself (Dess, McNamara, Eisner, & Lee, 2021).
Understanding the segments that the competition is doing poorly
gives us an opportunity to see it from a perspective of an
outsider and act on it to improve our company’s performance.
On the other hand, it is always useful to see the things that the
competition is doing right and is profiting from, as we can use
it to strategize and possibly create a plan that will ensure
beating the competition and staying ahead.
As I imagine myself as the CEO of Netflix, which is a part of
the huge TV industry, the major trend in the general
environment, and more specifically in technology would be the
movies. Over the past several years one of Netflix’ main
focuses has been on producing movies in-house, therefore
allowing them to premiere them on their own schedule and
giving them an advantage over cable television, movie theatres
and putting them at the very top of the TV-industry (Morgan,
2019). The impact of the movie trend on Netflix is obvious,
because Netflix had introduced a whole another level by
offering their own produced movies, which are only available
through their services. In addition to that, there are no
advertisements, consumers can access them on their own
schedule, and the movies are high-budgeted movies that have
done quite well in the market (Morgan, 2019). With the movie

6. industry being so massive nowadays, what a better way to win
the consumers over than to offer them an ad-free content, that is
also quality content only shown on Netflix. In order to continue
monitoring these trends we need to turn to professional movie
critics, as well as analytical reports on views and members, and
with all of this collected data, Netflix would be able to get an
insight on what it is that consumers enjoy the most, what it is
that they need and want, and then use that information to their
advantage. In order to stay in the very top of the TV industry
Netflix has to continue monitoring the trends and accordingly
find ways to incorporate this information into its competitive
strategy.
References:
Dess, G., McNamara, G., Eisner, A., & Lee, S. H. (2021).
Strategic Management: Creating Competitive Advantages (10th
edition). McGraw-Hill Higher Education.
Morgan, B. (2019, June 26). What Is The Netflix Effect?
Retrieved from
https://www.forbes.com/sites/blakemorgan/2019/02/19/what-is-

7. the-netflix-effect/#38b3f5b35640