Environmental Analysis

University of Phoenix

Morgana Jones

Environmental analysis is a useful technique that could contribute to strategic planning aimed at profitability and growth of a company. The external environment of an organization is composed of three components: the remote macroeconomic environment, the industry environment, and the operating environment within the organization itself. The macroeconomic has an impact on business operations that has many variables. The significant of these variables is the gross domestic product (GDP). Unemployment, inflation. And interest rates. This paper will conduct an environmental analysis on the computer industry in general with the focus on IBM as a specific example.

Industry Analysis

The computer industry has been classified as durable goods. Computers are general replace within 2-4 years depending on name brand. The computer industry tries to avoid this by creating new features as times goes by. Computers overall market in the US have seen a drastic decrease. At this time the computer industry is faces global competition due to new technology. The main contenders in the computer industry are IBM, dell, gateway, apple, and Compaq-HP. IBM has been very active in manufacturing to meet customer requirements. The differences between these companies are simply reputation and prices. IBM sells directly and indirectly to customers which allows them to increase sales. IBM have seen a drastic increase in their profit margin and growth in the recent year.

Operating Environment

IBM has a quality brand at a reasonable price. IBM has been known to rank high with customer satisfaction. IBM computers can be order online making purchasing much easy. IBM software and hardware have become very popular to order online. IBM has developed an excellent transaction with their suppliers with a better communication.

Remote Environment...