BUSINESS ENVIRONMENT AND STRATEGY

Business Environment and Strategy

Business Environment and Strategy

Introduction

Organizations today needs to cope with rapid change. The external environments of organizations are becoming increasingly complex, turbulent, and unpredictable (Morris, Kuratco, & Covin, 2008, 59). Some of the factors at work in these environments include the following:

Economic and social factors unpredictable prices, costs, exchange rates, tax incentives, business cycles

Social environment increases in poverty, shrinking middle class, changes in family and community structures, unfamiliar solutions to social problems needed

Resource environment increasing resource scarcity, shifting and decreased government funding, donations flat, increasing number of nonprofit

Customer environment more demanding and complex customers/clients, more competition

Competitive environment boundaries between sectors blurring, increased for-profit involvement in social ventures, new models of service delivery

Legal and regulatory environment more aggressive regulation, growing compliance costs, increased scrutiny from government

Global environment needs, resources and organizations globally interconnected, rapid global changes, communication and partnerships needed

These environments can present significant challenges for organizations, but they also create meaningful opportunities for those that can cope. Several organizational characteristics are crucial for survival in modern environments. Organizations need to be adaptable to adjust to change. They need to be flexible to design strategies, processes, and operational approaches that can meet diverse and evolving requirements. They need to be able to respond quickly to emerging opportunities. In addition, a proactive approach to competition and customers is needed. Finally, they need to be continuously innovative, giving priority to developing and launching new products, services, processes, markets, and technologies. These attributes are all embodied in entrepreneurship. New and existing organizations that adopt an entrepreneurial outlook and structures to support it are better positioned to survive and thrive in 21st-century environments.

Part A

Undertake an analysis of the environment, organization is operating and identify the key economic and social factors within that environment

Many organizations do not engage in business strategy, yet failure to plan effectively is considered a primary contributor to business failure. It is estimated that only 40% of businesses survive beyond six years of operation. Following the worst economic and social factors in the UK in the last 75 years, many businesses appear to be even more vulnerable to failure. Understanding the benefits of using business strategy tools and systems in an "unstable" economic and social factors could lead to adoption of such tools and systems by more organizations, and lead to improvement in the business survival rate.

I have taken an analysis of the environment in organizations that are prevailing in recent years. I make the analysis and find out the economic and social factors within that environment. Many organizations, that use of analytical, business strategy tools associated with early formal planning systems, such as competitive and environmental analysis, lead to improved organizational performance. Their view is consistent with the prescriptive schools of thought on strategy in which strategy is developed based on prescribed formal planning or analytical processes versus the descriptive view in which strategy develops from an owner's vision, emerges over time, or forms as a response to an organization's ...