Lecture 3c Business Environment

1) Factors and forces
2) Links between factors
3) Opportunity based on those factors

3 concentric circles:
External Environment , Task (Industry), Internal

StepG
Social/cultural
Technological
Economic
Political/Legal
Global

- Comment was made that in Israel regulations can change in a much smaller time frame than say Europe or USA and that regulations do change. I agree that is part of the culture that in Israel people are not willing to accept the status quo. This has its advantages in terms of flexibility and innovation but disadvantages in terms of stability. In terms of the political peace process (without taking sides) one needs to just look at the changes in political opinion and how this might affect the external analyses.

5 Forces Driving industry
Michal Porter - Harvard Uni - Competition

Industry competitors , potential entrants , buyers , suppliers , substitutes

Dell - JIT Just in time manufacturing , ousource to Fed-Ex

Substitutes - IP phone

Industry competition - ties in with the marketing Product Price Promotion Place

Patents - "You better have money to protect/defend it"

Building company exercise - We showed how you use the STEPG process and then go through the steps Define-Recognise-Analyse-Respond
This is building up to full strategy analysis

Good sources for research might be official sites like LMAS
or the CIA year book

Conclusion from this lecture was that companies usually consider looking at external
factors as a luxury but they should be balancing external scan and Competative inteligence

On SAP and the Enterprise Resource Planning

- My understanding is that ERP is good in theory but that most SAP projects fail (According to Gartner there is a 70% failure rate)