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ENVIRONMENTAL SCANNING

Environmental

ScanningIt is a process that takes into account both external and internal environment.

Environmental

Scanning

It is a process that takes into consideration the macro and micro environment

in light of a variety of factors external to the firm or those parameters outside

the business organizations that will directly and indirectly affect the conduct

of the business.

Macro environment

It essentially refers to all forms of direct or indirect factors of over-all

environmental conditions at large considered external or outside the business

organization.

SWOT AnalysisIs a popular tool for doing qualitative analysis of the potentials of business

organizations particularly in the context of assessing their competitiveness

StrengthIs something a firm does well or a characteristic that enhances its

competitiveness

WeaknessIs something a firm lacks, does poorly, or a condition placing it at a

disadvantage.

Weaknesses They are deficiencies of the firm which are considered competitive liabilities.

OpportunitiesRefer to situations where there are potentials from developing into products

or services or other business opportunities.

Opportunities

They are considered options by which the business organizations can explore

or venture into to enhance its competitive advantage or pursue the agenda of

growth and expansion.

threatsThey usually come in a form of internal and external factors that may put the

firm in uncompromising situation.

SWOT AnalysisIt is a handy tool for putting forward a simplistic approach to strategizing or

strategic planning in particular.

Micro environmentIt refers to internal environment or the environment within the business

organization itself.

StrengthThe ______ of the firm can be CAPITALIZED, APPLIED and SUSTAINED to

maintain or enhance the competitive advantage of the firm.

Weakness

The ______ of the firm have to be ACKNOWLEDGED but efforts have to be

made to OVERCOME these in the hope that they can be transformed into

assets or strengths sooner or later.

Organizational

Competency

This is one of the reasons why investors engage in business simply because

they have it which can be capitalized as a competitive advantage.

CompetencyIt is viewed as the product or organizational experience and represents the

real proficiency in performing an internal activity

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Core competencyIt refers to a well-performed internal activity that is central (not peripheral or

incidental) to a companys competitiveness and profitability.

Distinctive competencyIt is a competitively valuable activity that a company performs better than its

rivals.

Distinctive competency

It is something unique to a company that makes it different from the rest of

the business organizations within its industry or sector that enables to outdo

or outcompete its rivals.

BCG MatrixIt is a four-quadrant diagram showing the categorization of products or

services handled by the firm.

Question marks

Sometimes called the problem children or wild cats, they are new

products with the potential for success, but they need a lot of cash for

development.

StarsThe products and services in this category are market leaders typically at the

peak of their product life cycle.

Cash cowsThey include products or services that typically bring in far more money than

is needed to maintain their market share.

DogsThis category of products has low market share and does not have the

potential (because they are in an unattractive industry) to bring in cash.

Porters Five Forces of

Competitive Position

Analysis

It is a simple framework for assessing and evaluating the competitive strength

and position of a business organization.

Supplier power An assessment of how easy it is for suppliers to drive up prices.

Buyer power An assessment of how easy it is for the buyers to drive prices down.

Competitive rivalry The main driver is the number ad capability of competitors in the market.

The threat of

substitution

Where close substitute products exist in the market, it increases the

likelihood of customers switching to alternatives in response to price increase.

Threat of new entry Profitable markets attract new entrants, which erodes profitability.

Bruce Henderson He created the BCG Matrix Chart.

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VALUE CHAIN

Value chain systemA series of activities and process as well as he supply of raw materials or

needed inputs involved in producing a product or delivering a service.

Value chain systemThe series of activities involved in the production or processing of a product

or rendering of a service.

Supply chainIt consists of a set of activities involved before the creation or production of aproduct or the kind of product and services to be rendered by the business

firm to the public at large or the specific market it wants to serve.

Supply chainThe term that describes how organizations (supplier, manufacturer,

distributors and customers) are linked together.

Supply-chain

management

A total system approach to managing the entire flow of information, materials

and services from raw-materials suppliers through factories and warehouses

and end customers.

Upstream activities

Delivering or causing the creation of product or services within the confines of

the business organizations.

Downstream activitiesMoving the products from the confines or perimeters of business producing

the product

Distribution chain

It is not limited only to distribution organizations but it covers all the other

parties with direct and indirect roles in moving or causing the transfer of the

product from its origin to various places or countries and all the way to the

final consumption or user stage.

Value chainIt refers to the processes involved in converting a product from raw material

to its finished, saleable and consumable stage.

Value chainIt involves a way of organizing the activities of a business so that each activity

adds value or productivity to the total operation of the business

Value chain It can be viewed as the sum total of the supply and distribution chain.

Value chain

Specifically defined as linked set of value-creating activities beginning with

basic raw materials coming from suppliers, moving on to a series of value

added activities involved in producing and marketing product or service, and

ending with distributors getting the final goods into the hands of the ultimate

consumers.

Center of activityIts concept is that a component or a process is considered the most important

to the company or the activity central to the existence of the business itself.

Center of activity It is usually the point at which the company started.

Raison detre It means the reason for being so to speak.

Center of activity It is also the area where the so-called trade secrets of the company lie upon.

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Primary activitiesRefers to activities or operations in the business organization where the most

of the value creation efforts are made or done.

Secondary activities

Refer to support activities that are undertaken to support the value creation

activities both at the level of supply and distribution chain or the entire value

chain system

Inbound logistics

These activities are associated with raw materials or inputs procurement

activities covering vendor or selection, comparative shopping, negotiatingsupply contracts, and just-in-time arrival of goods.

Inbound logistics They form part of the backward channel of supply side of the business.

OperationsThese activities generally involve the actual conversion of raw materials into

finished product.

Operational activitiesAre the point in the value chain where actual activities is added on account of

the processes involved in realizing the finished product of the business.

Outbound logisticsThis activity is a sequel to the inbound and processing activities particularly

such aspects as storage, distribution and shipping of the finished product.

Marketing and salesThis activity deals with the interactions with prospective clients including the

ultimate customers or end-users.

Marketing and salesEssentially, it includes advertising, product promotion, sales management,

identifying the products customer base and distribution channels.

ServicesThis activity focuses on after-sales services to the customer whether end-user,

a processor or secondary producers.

Services It includes testing, maintenance, repairs, warranty, work and replacementparts.

Services

The output of this activity means monitoring satisfied customers and

downstream activities meant to improve the image of the product and the

business.

Corporate

infrastructureThis activity is the support backbone of the business operation.

Corporate

infrastructure

It includes general management, accounting, finance, planning and legal

services.

Corporate

infrastructure

It is most often pictured in the organization chart showing the relationships

among different positions, the communication network, and the authority

structure.

Human resources This is the unique activity of matching the right people to the job expected.

Human resourcesIt involves recruitment, retention, career path development, compensation,

training and development, and benefits administration.

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Research and

technology

development

This activity adds value in the way it improves the product and the business

processes in the primary activities.

Research and

technology

development

The output of this activity contributes to the product quality, integrity, and

reliability, which make life easier for the sales force and for customer

relations.

Backward channelIs composed of the companies or organization providing raw materials orother forms of inputs for the company to undertake its value creation

process.

Backward channel Generally this channel refers to the suppliers of the business concern

Forward channelRefers to the distribution side of the business or parties involved beyond the

production and storage line.

Forward channel

This channel includes organizations acting as distributors, dealers, agents,

indentors, importers, transport/delivery firms and other organizations closing

in to the ultimate users or consumers of the business organizations involved

in the value creation process.

Forward channel

These groups of business organization are considered allies working for the

business and they bridge the gap between the business and the ultimate

consumers of their products.