STRATEGIC REVIEW

Strategic Review

Strategic review

IDENTIFY THE IMPORTANCE OF ENVIRONMENTAL FACTORS AFFECTING THE ORGANISATION OR SECTOR

Many leaders have catchy slogans on their desks, many have learned to believe in them (Giuliani, 2002, p 69). Organizations that promote learning are better equipped to handle the ever-changing business environment. Retailers are no different. When an organization's leadership plans for the future it must take into account principle environmental factors. A company's ability to compete will be affected by how well the leaders have learned to identify those factors, to demonstrate their company's significance, and to estimate the extent or magnitude of each of the factor's impact on the corporate strategy. In this paper, I discuss the five principle environmental factors as cited by Pearce and Robinson (2002). Further, I indicate the significance of environmental factors on the overall business strategy, discuss the two factors that enable leadership to understand the extent of the overall strategy on their company's market position and lastly I discuss the impact of four external factors on the internal environment. Principle Environmental Factors and Their Significance Competitors Every business has external peers that perform similar functions within their professional discipline.

These peers are considered competitors and they are rival producers of goods or services. These competitors contribute to the overall industry by their ability to deliver goods and services of high caliber at competitive prices. Competition is good from a market perspective as it gives consumers choices and provides the businesses and opportunity to create a niche. In Ellis' Fast Company article (2002), he cites six strategies to apply in strategy formulation. Number 4, is understanding your competition's weakness and then exploits it. He cites Blockbusters late fee drill as an example of how a new competitor, Netflix, could influence customers to try their product over Blockbuster. With Netflix, there are no late fees, and you can keep a movie for as long as you like. Competitors are purchased as a strategic move to gain market share for example in Chainstoreage.com article (2004) “Whole Foods Market, inc is cited spending $38 million in stock to acquire Fresh and Wild Holdings Ltd, a U.K. natural and organic food chain.”

ANALYSE THE EXPECTATIONS OF ALL STAKEHOLDERS INVOLVED

Proponents of this framework emphasize the importance of a dynamic strategy in today's more dynamic business environment.  They argue that a strategy based on a "war of position" in industry structure works only when markets, regions, products, and customer needs are well defined and durable.  As markets fragment and proliferate, and product life cycles accelerate, "owning" any particular market segment becomes more difficult and less valuable.  In such an environment, the essence of strategy is not the structure of a company's products and markets but the dynamics of its behavior. 

A successful company will move quickly in and out of products, markets, and sometimes even business segments.  Underlying it all, though, is a set of core competencies or capabilities that are hard to imitate and distinguish the company from ...