External Environment

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates. Two of the five forces that are the most significant for Capital One would be rivalry among competitors and threat of new entrants. Capital One has addressed rivalry among competitors in the past by getting new customers to keep their percentage level low for the new and existing customers. Also they have credibility among investor to find individual who are at high risk but will have a good potential with handling their credit card. Capital One threat of new entrants was a major concern in the first two to three years of their business. These concerns are now less intense as it has led to a cost advantage that would be impossible for new entrants to replicate. Capital One can approve these two forces going into the future by keeping up with the latest technology, catering to the community so they can continue to get new customers, and continue to come out with other products that will allow the company to grow in other fields.

There are two types of business environment - internal and external environment. As for internal environment, it includes some factors within the boundaries of the organization or specific decision unit that are taken directly into consideration in the decision-making behavior of individuals in that system.

External environment consists of forces that directly or indirectly influence organization’s business activities. The actors and forces outside marketing that affect management’s ability to build and maintain successful relationship with target customers.

Every organization has to analyze its business environment before making policies and strategies for its day to day operations, marketing and promotional efforts, and competing with the industry rivals (Loudon, Stevens, & Wrenn 2004). The key factors of the business environment that affect the business operations of a company include political, economic, technological, environmental, cultural, and demographical factors. In addition to these factors, an analysis of the competitive forces is also essential in order to assess the potential threats and intensity of rivalry present in the industry (Ritchie & Crouch 2003). If an organization does not give importance to the analysis of its business environment, it may not be able to compete in the industry for a long period of time (Hill & Jones 2007).

A business organization cannot survive in its industry if it does not keep an eye on what is happening in its internal and external business environment. The analysis of business sector or environment acquaints an organization with the issues, challenges, and external factors that have a direct or indirect impact on its business operations and profitability. On the basis of this analysis, the organization can formulate its future strategies and compete in the industry in a more effective and vigilant manner (Cadle, Paul & Turner 2010).

Business environment is the sum total of all external and internal factors that influence a business. External factors and internal factors can influence each other and work together to affect a business.

Vroom Vroom! This is the welcomed sound that automobile owners and manufacturers like to hear. It is the sound of completion, success, and satisfaction. But what happens when this sound is drowned out by weakened profits, customer dissatisfaction, and industry weakness? In comes the government bailout of the automobile industry. In recent years, 2008-2010, Ford, GM, and Chrysler had to be saved from self-destruction and bankruptcy through government incentives, loans, and emergency funding. In December of 2008 these 3 automakers asked the government for monetary assistance that totaled approximately 34 billion dollars

     A businesses environment creates many opportunities as well as problems for prospering businesses. The environment determines what a business can do by shaping and channeling its development. Businesses function within an environment by allowing entrepreneurs to raise capital and create profits freely. The supply of money available within a business as well as the economic stability through times of growth and recession have strong effects on businesses. Not only is the physical environment, including natural resources, pollution and energy as discussed previously, important, but many other

PepsiCo Inc. is one of the leading brands in the world's food and beverage industry. It operates globally with a strong customer base and a wide array of products. This paper analyzes the general business environment for this leading food and beverage brand in order to assess what strategies it has been pursuing to operate in this challenging and complex environment. The analysis of internal and external environment has also been done in a view to figure out the biggest strengths, weaknesses, opportunities, and threats for the company. The final section gives an overview of the company's resources, capabilities, core competencies, and value chain which can help it to achieve a competitive advantage in its industry.

In this term of our discussion we’re talking about business environment. It’s like an overview of the whole business environment. Simply environment of a business means the external forces including the business decisions. They can be forces of economic, social, political and technological factors.

The external environment covers many aspects for the company. They both are considered under two factors the macro-environment and the micro-environment.

The environment is a mix between the internal and external forces which has a major of influences positively or negatively on the organizations, especially on their ability to build and maintain successfully.

The external environment have lots of factors outside the company where you don’t have much control over. The internal environment business includes all the factors with in the organisation that impact the approach and success of your operations.

On one hand, in order to understand a management situation of a company, the organization structure is the key issues which should be involved. Xin hua bookstore is being a traditional organization has the traditional structure that functional organization structure. This type of organization always has many layers including senior management, middle management and base management level in the pyramid. Similarly as the IBM, the management layers up to 18. Xin hua bookstore used this type of organization structure have found much more problems. The information transition is appeared too slowly and the manager’s decision always being distortion.

The internal business environment includes factors within the organisation that impact the approach and success of the business operations. Formerly presented as core competencies, capabilities, leadership style and culture of an organisation. To understand its sources of competitive advantage from within a firm or an organisation will implement specific tools such as SWOT analysis (Strength, Weaknesses Opportunities and Threats), Value chain analysis, Resource based view, VRIO framework and BCG Matrix for instance.