Bpp learning Media is an acca approved Content Provider

 
21 
Study Guide 
Intellectual level
(d) Describe the activities of an organisation that affect its 
competitiveness: 
K 
(i) Purchasing 
(ii) Production 
(iii) Marketing 
(iv) Service 
 
1
Analysing the business environment 
Whatever the overall strategic management method used, no organisation is likely to achieve its aims if 
it fails to take into account the 
characteristics of the environment
in which it operates.
The environment is everything that surrounds an organisation, physically and socially. 
Environmental analysis is one of the inputs to the strategy-making process. Johnson and Scholes
 
suggest 
the following procedure: 
Step 1 
Assess the nature of the environment (eg is it changing?). 
Step 2 
Identify those influences which have affected the organisation in the past or which are 
likely to do so in future. 
Step 3 
Prepare a structural analysis identifying the 'key forces at work in the immediate or 
competitive environment'. 

These steps should identify important developments. Then the following questions should be asked. 

Step 4 
What is the organisation's position in relation to other organisations? 
Step 5 
What threats and/or opportunities are posed by the environment? 
An organisation's environment may be examined in a number of ways. 
(a) 
Global/local
. Some organisations operate worldwide. However, they still have to be sensitive to 
the local requirements of the countries or markets they operate in or export to. Some companies 
are much more exposed to global competition than others. 
 EXAM FOCUS POINT 
The topics covered in this large chapter are very important areas. Note that exam questions will 
not 
be 
country specific. 
BPP Tutor Toolkit Copy

---