Evaluating a Company's External Environment

In The Name of ALLAH, the Most Beneficent and Merciful

Assalamu’alaikum W.B.T

Peace and Blessings be upon The Prophet Muhammad SAW, His family and friends.

The core concept for this topic is about macro-environment which covers a board environmental context in which the industry is a strategic component related covers where the firm industry is situated and has no direct control. It is includes general economic conditions and immediate industry and competitive environment.

All companies operating in the macro environment formed by influences stemming from general economic conditions; demographic population, community values ​​and lifestyle; laws and regulations, technology, and, closer to home, industry and competitive environment in which the company operates.

PESTEL analysis focuses on the six principal components of strategic significance in the macro-environment:

●     Political

●     Economic,

●     Social

●     Technological,

●     Environmental

●     Legal

Figure 1 The Five-Forces Model of Competition: A Key Analytical Tool

The Six Components of the Macro-Environment

COMPONENT	DESCRIPTION
Political factors	These factors include political policies and processes, including the extent to which a government intervenes in the economy. They include such matters as tax policy, fiscal policy, tariffs, the political climate, and the strength of institutions such as the federal banking system. Some political factors, such as bailouts, are industry-specific. Others, such as energy policy, affect certain types of industries (energy producers and heavy users of energy) more than others.
Economic conditions	Economic conditions include the general economic climate and specific factors such as interest rates, exchange rates, the inflation rate, and the unemployment rate, the rate of economic growth, trade deficits or surpluses, savings rates, and per capita domestic product. Economic factors also include conditions in the markets for stocks and bonds, which can affect consumer confidence and discretionary income. Some industries, such as construction, are particularly vulnerable to economic downturns but are positively affected by factors such as low interest rates. Others, such as discount retailing, may benefit when general economic conditions weaken, as consumers become more price-conscious.
Sociocultural forces	Sociocultural forces include the societal values, attitudes, cultural factors, and lifestyles that impact businesses, as well as demographic factors such as the population size, growth rate and age distribution. Sociocultural forces vary by locale and change over time. An example is the trend toward healthier lifestyles, which can shift spending toward exercise equipment and health clubs and away from alcohol and snack foods. Population demographics can have large implications for industries such as health care, where costs and service needs vary with demographic factors such as age and income distribution.
Technological factors	Technological factors include the pace of technological change and technical developments that have the potential for wide-ranging effects on society, such as genetic engineering and nanotechnology. They include institutions involved in creating new knowledge and controlling the use of technology, such as R&D consortia, university-sponsored technology incubators, patent and copyright laws, and government control over the Internet. Technological change can encourage the birth of new industries, such as those based on nanotechnology, and disrupt others, such as the recording industry.
Environmental factors	This includes ecological and environmental forces such as weather, climate, climate change, and associated factors like water shortages. These factors can directly impact industries such as insurance, farming, energy production, and tourism. They may have an indirect but substantial effect on other industries such as transportation and utilities.
Legal and regulatory factors	These factors include the regulations and laws with which companies must comply such as consumer laws, labor laws, antitrust laws, and occupational health and safety regulation. Some factors, such as banking deregulation, are industry-specific. Others, such as minimum wage legislation, affect certain types of industries (low-wage, labor-intensive industries) more than others.

HOW STRONG ARE THE INDUSTRY’S COMPETITIVE FORCES?

There are five competitive forces, which are competition from rival sellers,  competition from potential new entrants,  competition from producers of substitute products, supplier bargaining power and last is customer bargaining power. Figure 2 below shows the further explanation :)

Figure 2

Last but not least, I want to show one example for five force of Nike, which is as figure 3 below:

Figure 3

Enough for this week, thanks for your good reading :)

Topic for next week- EVALUATING A COMPANY'S RESOURCES, CAPABILITIES, AND COMPETITIVENESS. Wait for me, yeah ;)


Assalamu'alaikum :D

What is Vision and Mission ?

Bismillahirrahmanirrahim

Assalamu’alaikum w.b.t.

Peace and blessings be upon The Prophet Muhammad SAW, His family and friends.

Alhamdulillah,

In this week 2,

We have learned about the business vision and mission.

Not only the business. Every person has their vision and mission, right?

Okay, let’s I tell about what is vision and mission.

Vision statement should answer the basic question, “What do we want to become?” Basically, vision is short, and preferably one sentence. Such as,

“I want to be a businesswoman in the future”

Or perhaps, “I want to become a successful entrepreneurship one day”

 This vision must be achieved neither in short-term, below 1 year, mid-term, 1-3 years or long-term, 3-5 years. 

Whereas, mission statement is a declaration of an organization’s “reason for being”. In other that, mission is what an organizational is and why it exists. And the answers the pivotal question “What is our business? The nature of business it is in, and who are our customers it looks to satisfy”.

It is also called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, and a statement of business principles.

For example, we want to build company which produce product likes hijab for female and other clothes for male. For this product, we will produce quality clothing standard and comfortable to the user. Focus on how to dress according to the Islamic Syariah. And everything we do, we strive to act honestly, trustworthy, and easy to talk. No fraud and interest.

The Important of Vision and Mission Statements

Why need for vision and mission?

1.       To ensure unanimity of purpose within the organization.

2.       To provide a basis, or standard, for allocating organizational resources.

3.       To establish a general tone or organizational climate.

4.       To specify organizational purposes.

5.       5. To facilitate the translation of objectives into a work structure.

There are many benefits having a clear vision and mission, which is:

1.       Achieve clarify of purpose among all managers and employee.

2.       Provide direction.

3.       Achieve higher organizational performance.

4.       Achieve synergy among all managers and employees.

5.       Motivated organization worthy of support.

Once we put our mission, we also should know about mission statement components which important to achieve the goals.

1.       Customers-Who are the firm’s customers?

2.       Products or services-What are the firm’s major products or services?

3.       Markets-Geographically, where does the firm compete?

4.       Technology-Is the firm technologically current?

5.       Concern for survival, growth, and profitability-Is the firm committed to growth and financial soundness?

6.       Philosophy-What are the basis beliefs, values, aspirations, and ethical priorities of the firm?

7.       Self-concept-What is the firm’s distinctive competence or major competitive advantage?

8.       Concern for public image-Is the firm responsive to social, community, and environmental concerns?

9.       Concern for employees-Are employees a valuable asset of the firm?

Here, I want to give an example of mission statement of "Lembaga Tabung Haji (LTH)", Malaysia which is familiar with the organization produce a service to help the Muslim community in the country to fulfill the Fifth pillars of Islam, perform Hajj at Makkah and Madinah.

Vision

Pillar of Ummah’s economic success; excellence Hajj management

Mission

In achieving TH’s vision, they pledge:

1.       To strengthen the ummah’s economy.

2.       To remain active in seeking strategic investments locally and globally to ensure sustainable and continuous growth.

3.       To manage and enrich depositor’s funds.

4.       To continuously give excellent services.

5.       To facilitate and assist pilgrims in achieving mabrur hajj.

6.       To provide competitive, halal and toyyiban returns.

For the conclusion, vision and mission are important to create the framework and give inspiration our organization and its employees need to successful.  An old Japanese proverb eloquently states the important symbiotic relationship between vision and action. 

“Vision without action is a daydream. Action without vision is a nightmare”

Enough for this week. See you again.

Assalamu'alaikum :)

  

First week of lecture...

In The Name of ALLAH, The Most Beneficent and Merciful

Assalaamu'alaikum,

Peace and Blessings be upon the Prophet Muhammad SAW, His family and friends.

***************************************************************************

Alhamdulillah, beginning the first week of this semester :)

As usually, there is no tutorial class for first week and not all the lectures are available, so the students still have their holidays for this week. Hee :D

Basically, before starting the lectures, we always think that who will be teach us? Is it male or female? How they will teach us? And many questions that hover in head. Huhu :/. This is because, there are some people, and they will be more motivated and confident in their studies due to the teaching. It is include me :P. Alhamdulillah, I got the person who gives me support and encourage for me to learn to be more confident. This subject was taught by a beautiful lecturer :) Her name is Dr. Ummi Salwa Ahmad Bustamam, which is on my observations she is very confident and successful to attract us to study harder and one thing that I amazed is she have very much of knowledge. Masya-ALLAH ^_^

I still remember, two of the quotes that give me a spirit. First is "A successful people have great determination and want to change their self". Yes, all peoples need to change. And ALLAH does not change unless they change their self.

ALLAH SWT said in the Holy Quran,

“Surely ALLAH does not change the condition of a people until they change their own condition…”

(Surah Ar-Rad:11)

I still in progress to change myself and I need other people to give me motivation, spirit and advice. May ALLAH ease, Aamin J

And the second is consistence doing the good deeds. Even just smile and spread salam to other people and consistence to do it, it is better that did not do anything. Furthermore, smile and salam are two of the Sunnah Prophet Muhammad SAW and we will get the rewards J

“Which one of the deeds that ALLAH loves?” Rasulullah SAW answered, “The deeds that you always do (consistence) even it’s simple and small”

(HR Muslim)

So, after this let us the first one who smile and spread salam. :D. And at the same time, try to beautify ourselves by improve other religious duties J

First lecture, there is no more learning. Just have introduction for this subject. The assignment which major of the percentage are in the continuous assessment, 60%. And the balance is 40% for final examination. Okay, it’s mean that we must to focus in carry mark which is to make sure not fail in this subject.

One of the task that made me interested is make a vlog/blog. Wow, I like it :D. Since I already have my own blog, so I think this is not a difficult for me. Just, maybe this blog should in English language so I must to try it although my language very weak. Ops, no. I can make it. Yes, I can. In Sha ALLAH :D.

****************************************************************************

Okay, back to Introduction for this subject, the strategic management is the art of science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. It's synonymously with the term strategic planning. Sometimes, this term used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation. Furthermore, strategic management deals with activities that companies take to deal with the possibilities, risks, difficulties, inner & external atmosphere. "Strategic plan is a company's game plan"

In Strategic management, there is have a stages which is level to achieves the goal.

First: Strategy Formulation.

Second: Strategy Implementation (action stage)

Third: Strategy Evaluation.

Each stages have their explanation. In the first stages, it's includes developing a vision and mission, identifying an organization's external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.

Second stages often called the action stage which refers to a firm to establish annual objectives, devise policies, motivate workers, and allocate resources so that formulated strategies can be executed.

Reviewing external and internal factors are explaining of strategy evaluation. In this stage, we will now how to become aware of factors in a company's broad macro-environment that may have strategic significance. Other than that, learn how to use multiple frameworks to determine whether an industry's outlook presents a company with sufficiently attractive opportunities  for growth and profitability.



Em, I think enough for this week. In Sha ALLAH, for next week I will explain further about the vision and mission which in Chapter 2. Thank you :)

Alhamdulillah ;)

In The Name of ALLAH, The Most Beneficent and The Merciful

Assalamu'alaikum w.b.t.

There is no words that I want to say except Alhamdulillah, all praises to my Lord, ALLAH SWT for gave me all kinds of countless blessings.

Peace and blessings be upon the Prophet Muhammad SAW, all His family and friends.

A lot of thanks for my :

beloved mom and dad, and family for their sacrifice and deeds before my birth until now ^_^,

 my great and sporting lecturer, Dr. Ummi Salwa Ahmad Bustamam who have given me and my friends encourage and support to create this blog. ;D,

and my friends and also for those who know myself  ;)

May ALLAH Bless you all live in this world and the hereafter. In Sha ALLAH, Amiin :D

♥

 With love 

♥