This document discusses the technological and competitive environment faced by businesses. It defines technological environment and outlines key features like continuous growth and reliance on R&D. It then analyzes how technology impacts businesses through increased productivity, need for skilled labor, and creation of substitutes. The document also defines competitive environment using Porter's Five Forces model examining rivalry, threat of new entrants and substitutes, and bargaining power of buyers and suppliers. It concludes by outlining common competitive strategies like cost leadership, differentiation, low-cost focus, and differentiation focus.

2. TECHNOLOGICAL
AND
COMPETITIVE
ENVIRONMENT

3. TECHNOLOGICAL
ENVIRONMENT

4. TECHNOLOGICAL
ENVIRONMENT
• According to J.K Galbraith
“ Technology is a systematic application
of scientific or other organized knowledge
to practical tasks”

5. FEATURES OF TECHNOLOGICAL
ENVIRONMENT
• Growth.
• Technology makes more technology possible.
• It requires research and development.
• Helps promote business using Technology.
• Shows not only the success of the firm but also of the
country.

6. IMPACT OF
TECHNOLOGY ON BUSINESS
• Increased Productivity.
• Need For Professional Managers And Skilled
Employers.
• Technology Creates Substitutes.
• Technology Results In Opposition.
• It Has Increased Business Mobility.

7. COMPETITIVE
ENVIRONMENT

8. COMPETITIVE
ENVIRONMENT
• Means the immediate competitive factors in
which an organization conducts its activities.
• Michael Porter’s Five forces of competitive
positions analysis is a framework for
assessing and evaluating the competitive
strength and position of an organization.

10. RIVALRY AMONG
EXISTING COMPETITORS
• Organizations in an industry are affected by the number
of competitors and capability of the competitors.
• Competitive strategies of an organization make use of
techniques like rigorous promotion of products, providing
good customer service, reducing the price of the
product etc.
• When the fixed costs are high the rivalry among the firms
increases because of economies of scale.

11. THREAT OF NEW ENTRANTS
• Second force that creates competition is new Firms
entering the industry.
• Threat of new entry depends on the entry and exit
barriers.
• When entry and exit barriers are low, the firms easily
enter and exit the industry, the profit is low and vice
versa.
• Government controls entry of new firms with policies and
laws.

12. THREAT OF SUBSTITUTES
• Substitutes means the products of
other firms.
• Threat of substitutes means the threat
when the demand for product of firm
gets affected because the price of the
substitute product of other firm gets
changed.
• Price of substitute commodities.

13. BARGAINING POWER
OF BUYERS
• Powerful buyers are able to force the
industry to reduce the prices of the products.
• The smaller the number of buyers the greater
is the bargaining power of the buyers.
• The greater the size of the order; greater is
the bargaining power of the buyers.
• Cost of switching.

14. BARGAINING POWER
OF SUPPLIERS
• When suppliers have bargaining power,
they sell their products at higher prices and
exercise power on the firm.
• When supplier demands for more share in
profits, the profits of the firm get reduced.
• If the product supplied has unique features
and has no substitutes, supplier is powerful;
he can demand more price.

15. Competitive
Strategies
Cost
Leadership
Strategy
Differentiation
Strategy
Low-Cost
Focus
Strategy
Differentiation
focus strategy

16. COST LEADERSHIP
STRATEGY
• Goods are produced for broad customer base.
• Strict attention is given to product controls and budgets.
• There is little product differentiation.
• More importance is given on improving the productivity.
• Tries to understand the need of the specific market of
consumers and creates a product that will attract the
customers.

17. DIFFERENTIATION
STRATEGY
• It is adopted to offer products which are
unique.
• The organization makes effort to create
brand loyalty.
• Gives organization advantage over its
competitors .
• Offers products that create value to
customers.

18. LOW-COST FOCUS
STRATEGY
• Similar to Cost Leadership Strategy except
that it focuses on niche market.
• Product is not marketed to the entire market
but to a particular segment of consumers.
• The focus is to provide goods at lower rate
to that particular segment.

19. DIFFERENTIAL FOCUS
STRATEGY
• Also focuses on a particular segment of
consumers like the low-cost strategy.
• The product is marketed as being unique in
some way, to a particular segment.
• In this strategy, the organization offers
something unique to the customers in the
niche market.