The Strategic Manager - Assignment Example

This is the three aspects that can be described as ‘layers’ of the business environment, which surrounds the organization. Macro-environment is said to be the most influential aspect of the environment that surrounds any organization. It comprises of the factors that impact to a greater or lesser extent on almost all organizations. Changes in macro-environment can have a negative or positive influence on an individual organization. The most commonly used framework that is used to analyze the macro-environment of an organization is referred to as PESTEL, which identifies the future trends of an organization in terms of political, economic, social, technological, environmental and legal environment.

Strategies will have to change depending on how a business organization adopts to certain changes in macro-environment. A strategic manager will have to alter a strategy if a factor in macro-environment such as technology changes in the future. The other ‘layer’ within the broad environment of business organization after macro-environment is the industry or a sector. An industry is a group of organization producing the same products or services. A strategic manager can use Porter’s five forces framework and cycle of competition concept to understand how the competitive dynamic around and within an industry are changing from time to time.

Porter’s five forces framework was established to assess the attractiveness (profit potential) of different industries. A strategic manager can use this framework to identify the source competition in an industry or sector. These forces are very important to analyze the competitive environment that surrounds a business organization, it should be however be noted that the five forces are not independent since pressure in one direction can trigger off changes in a dynamic process of shifting source of competition.

Competitors and market are the next immediate layer