The document discusses scanning the competitive environment. It notes that hypercompetition leads to constant change and uncertainty as product life cycles shorten and new technologies emerge. Firms must identify environmental threats that could undermine their position as well as opportunities to leverage competitive advantages. The macro environment encompasses regulatory, economic, political, technological and social factors that shape the overall industry context. Understanding characteristics of these environments like GDP, social values and regulations is important for environmental scanning.

2. ENVIRONMENT SCANNING
•ENVIRONMENT TURBULENCE
Hyper competition - Competitive intensity is
high “In hyper competition, the frequency, boldness &
aggressiveness of dynamic movement by the players
accelerates to create a condition of constant disequilibrium
and change.

3. COMPETITIVE ENVIRONMENT
SCANNING
• Market stability is threatened by short product life
cycles, short product design cycles, new technologies,
frequent entry by unexpected outsiders, repositioning
by incumbents and tactical redefinition market
boundaries as divers industries merge.
• The environment escalates toward higher & higher
levels of uncertainty, dynamism, heterogeneity of
players & hostility”
• eg. Computers - cannibalize their own product

4. COMPETITIVE ENVIRONMENT
SCANNING
•ENVIRONMENTAL THREAT- Challenges posed by
an unfortunate trend - lead to erosion of company’s
position
•ENVIRONMENTAL OPPORTUNITY - an attractive
arena - that company enjoys a competitive advantage

5. INDUSTRIAL ENVIRONMENT
Firm
Relevant
environment
Micro
environment
Macro
Environment
Internal
Environment

6. COMPONENTS OF MEGA
ENVIRONMENT
Regulatory EconomicPolitical
Technological Social
Mega Environment

7. CHARACTERISTICS OF VARIOUS
ENVIRONMENT
TECHNOLOGICAL
• Transportation capability
• Mastery over energy
• Ability to alter character
of material
• Mechanization of
physical activities
• telecommunication
network
SOCIAL
• Population, demographic
data
• Spread of literacy
• Income distribution
• Social Values
• Ethical standards
• Concern for health

8. CHARACTERISTICS OF
VARIOUS ENVIRONMENT
ECONOMIC
• GDP, Growth rate
• Money supply
• BOP
• Policies and regulations
POLITICAL
• Regulatory
• Legal provisions
• Stability of Government

9. Suppliers
Marketing
Intermediaries
Market
Types
Market
demand
Competition
MICRO ENVIRONMENT
Financial
Institutions
Regulatory
Provisions
Industrial
relation
climate
Availability of
skilled
manpower

10. SWOT
•STRENGTH - Inherent capacity which an organization
an use to gain strategic advantage over it competitors
•WEAKNESS - Inherent limitations or constraint which
creates a strategic disadvantage
•OPPORTUNITY - a favorable condition in the
organization’s environment which enables it to
consolidate and strengthen its position
•THREAT - an unfavorable condition in organization’s
environment which creates a risk or causes damage to the
organization