ENVIRONMENTAL SCANNING

Environmental
Scanning

It is a process that takes into account both external and internal environment.

Environmental
Scanning

It is a process that takes into consideration the macro and micro environment
in light of a variety of factors external to the firm or those parameters outside
the business organizations that will directly and indirectly affect the conduct
of the business.

Macro environment

It essentially refers to all forms of direct or indirect factors of over-all

environmental conditions at large considered external or outside the business
organization.

SWOT Analysis

Is a popular tool for doing qualitative analysis of the potentials of business

organizations particularly in the context of assessing their competitiveness

Strength

Is something a firm does well or a characteristic that enhances its

competitiveness

Weakness

Is something a firm lacks, does poorly, or a condition placing it at a

disadvantage.

Weaknesses

They are deficiencies of the firm which are considered competitive liabilities.

Opportunities

Refer to situations where there are potentials from developing into products
or services or other business opportunities.

Opportunities

They are considered options by which the business organizations can explore
or venture into to enhance its competitive advantage or pursue the agenda of
growth and expansion.

threats

They usually come in a form of internal and external factors that may put the
firm in uncompromising situation.

SWOT Analysis

It is a handy tool for putting forward a simplistic approach to strategizing or

strategic planning in particular.

Micro environment

It refers to internal environment or the environment within the business

organization itself.

Strength

The ______ of the firm can be CAPITALIZED, APPLIED and SUSTAINED to

maintain or enhance the competitive advantage of the firm.

Weakness

The ______ of the firm have to be ACKNOWLEDGED but efforts have to be

made to OVERCOME these in the hope that they can be transformed into
assets or strengths sooner or later.

Organizational
Competency

This is one of the reasons why investors engage in business simply because
they have it which can be capitalized as a competitive advantage.

Competency

It is viewed as the product or organizational experience and represents the

real proficiency in performing an internal activity

Core competency

It refers to a well-performed internal activity that is central (not peripheral or

incidental) to a companys competitiveness and profitability.

Distinctive competency

It is a competitively valuable activity that a company performs better than its

rivals.

Distinctive competency

It is something unique to a company that makes it different from the rest of

the business organizations within its industry or sector that enables to outdo
or outcompete its rivals.

BCG Matrix

It is a four-quadrant diagram showing the categorization of products or

services handled by the firm.

Question marks

Sometimes called the problem children or wild cats, they are new
products with the potential for success, but they need a lot of cash for
development.

Stars

The products and services in this category are market leaders typically at the
peak of their product life cycle.

Cash cows

They include products or services that typically bring in far more money than
is needed to maintain their market share.

Dogs

This category of products has low market share and does not have the
potential (because they are in an unattractive industry) to bring in cash.

Porters Five Forces of

Competitive Position
Analysis

It is a simple framework for assessing and evaluating the competitive strength

and position of a business organization.

Supplier power

An assessment of how easy it is for suppliers to drive up prices.

Buyer power

An assessment of how easy it is for the buyers to drive prices down.

Competitive rivalry

The main driver is the number ad capability of competitors in the market.

The threat of
substitution

Where close substitute products exist in the market, it increases the

likelihood of customers switching to alternatives in response to price increase.

Threat of new entry

Profitable markets attract new entrants, which erodes profitability.

Bruce Henderson

He created the BCG Matrix Chart.

VALUE CHAIN
Value chain system

A series of activities and process as well as he supply of raw materials or

needed inputs involved in producing a product or delivering a service.

Value chain system

The series of activities involved in the production or processing of a product

or rendering of a service.

Supply chain

It consists of a set of activities involved before the creation or production of a

product or the kind of product and services to be rendered by the business
firm to the public at large or the specific market it wants to serve.

Supply chain

The term that describes how organizations (supplier, manufacturer,

distributors and customers) are linked together.

Supply-chain
management

A total system approach to managing the entire flow of information, materials

and services from raw-materials suppliers through factories and warehouses
and end customers.

Upstream activities

Delivering or causing the creation of product or services within the confines of

the business organizations.

Downstream activities

Moving the products from the confines or perimeters of business producing

the product

Distribution chain

It is not limited only to distribution organizations but it covers all the other
parties with direct and indirect roles in moving or causing the transfer of the
product from its origin to various places or countries and all the way to the
final consumption or user stage.

Value chain

It refers to the processes involved in converting a product from raw material

to its finished, saleable and consumable stage.

Value chain

It involves a way of organizing the activities of a business so that each activity

adds value or productivity to the total operation of the business

Value chain

It can be viewed as the sum total of the supply and distribution chain.

Value chain

Specifically defined as linked set of value-creating activities beginning with

basic raw materials coming from suppliers, moving on to a series of value
added activities involved in producing and marketing product or service, and
ending with distributors getting the final goods into the hands of the ultimate
consumers.

Center of activity

Its concept is that a component or a process is considered the most important

to the company or the activity central to the existence of the business itself.

Center of activity

It is usually the point at which the company started.

Raison detre

It means the reason for being so to speak.

Center of activity

It is also the area where the so-called trade secrets of the company lie upon.

Primary activities

Refers to activities or operations in the business organization where the most

of the value creation efforts are made or done.

Secondary activities

Refer to support activities that are undertaken to support the value creation
activities both at the level of supply and distribution chain or the entire value
chain system

Inbound logistics

These activities are associated with raw materials or inputs procurement

activities covering vendor or selection, comparative shopping, negotiating
supply contracts, and just-in-time arrival of goods.

Inbound logistics

They form part of the backward channel of supply side of the business.

Operations

These activities generally involve the actual conversion of raw materials into
finished product.

Operational activities

Are the point in the value chain where actual activities is added on account of
the processes involved in realizing the finished product of the business.

Outbound logistics

This activity is a sequel to the inbound and processing activities particularly

such aspects as storage, distribution and shipping of the finished product.

Marketing and sales

This activity deals with the interactions with prospective clients including the
ultimate customers or end-users.

Marketing and sales

Essentially, it includes advertising, product promotion, sales management,

identifying the products customer base and distribution channels.

Services

This activity focuses on after-sales services to the customer whether end-user,

a processor or secondary producers.

Services

It includes testing, maintenance, repairs, warranty, work and replacement

parts.

Services

The output of this activity means monitoring satisfied customers and

downstream activities meant to improve the image of the product and the
business.

Corporate
infrastructure

This activity is the support backbone of the business operation.

Corporate
infrastructure

It includes general management, accounting, finance, planning and legal

services.

Corporate
infrastructure

It is most often pictured in the organization chart showing the relationships

among different positions, the communication network, and the authority
structure.

Human resources

This is the unique activity of matching the right people to the job expected.

Human resources

It involves recruitment, retention, career path development, compensation,

training and development, and benefits administration.

Research and
technology
development

This activity adds value in the way it improves the product and the business
processes in the primary activities.

Research and
technology
development

The output of this activity contributes to the product quality, integrity, and
reliability, which make life easier for the sales force and for customer
relations.

Backward channel

Is composed of the companies or organization providing raw materials or

other forms of inputs for the company to undertake its value creation
process.

Backward channel

Generally this channel refers to the suppliers of the business concern

Forward channel

Refers to the distribution side of the business or parties involved beyond the
production and storage line.

Forward channel

This channel includes organizations acting as distributors, dealers, agents,

indentors, importers, transport/delivery firms and other organizations closing
in to the ultimate users or consumers of the business organizations involved
in the value creation process.

Forward channel

These groups of business organization are considered allies working for the
business and they bridge the gap between the business and the ultimate
consumers of their products.