Management Models and Micro/Macro Environment

(Spotlight- Innovation and Entrepreneurship)
organisational context (environment)

All of business would get effect from the inside and outside.


This week my lecturer explain to us about Internal and Competitive(micro) environment layers.

 Especially, UK has a lot of supermarket such as M&S, ASDA, Waitrose, Sainsbury's, Morrisons and Tesco. They have a lot of competitors and effect from other ways. These reasons why they most care about business environments and management models.













Do you know the companies? This companies had high position in their own markets but they could not followed trends and business environments. As a result, they values were decreased and some companies sold to other company such as Microsoft bought NOKIA for hard-wear market. So, business environment is important to companies even a market leader.




The Internal environment consists to business with structure, objectives, culture,technology,leadership, finance and people which means, it is kind of strategy and managements about the inside for business. For example, companies would choice their structure such as centralization or decentralization, tall structure or flat structure and management and hierarchies. Also, leadership is important to business because we can see Apple and Samsung. Steve jobs was leader in empire of Apple. He did autocratic and innovation leaderships and he directed all of Apple products. On the other hand, Samsung president 'Lee gen hee' also one of autocratic leader but he is not concerned the all of business and giving work to employees.











Competitive(micro) Environment

We can use a tool about this section. This is Porters 5 forces by Harvard professor 'Porter'.




This tool has 5 factors.
  • Competition    is most important point in the factors (my own opinion). Because, today a lot of companies have a lot of people of talent and knowledge and roll-models but success factor is how better than competitors and innovation in modern society such as Samsung and Apple because Apple was leader of IT market but today Samsung got high position than them(Samsung 39% vs Apple 19%). So companies must ensure to customers about 'why the company is better than competitor'(preference and strong points). 



  • New Entrants is potential ingredient of new firms (in to the market). If some company has market leader but new company can change the position. As a result, companies make patents, barriers to entry, brand image and getting economy of scale. For instance, many companies cannot inside the smart phone market since the market needs lots of money and employee and know-how so it is positive point to global competencies (Samsung, Goggle and Apple etc..).

  • Bargaining power of suppliers 
This factor is suppliers could dictate to businesses such as Ikea. Ikea choose direct distribution structure system and price down than other furniture companies. Also global companies would get backward integration and try monopoly in their market. For example, Coca-cola is one of strong leader and has too much bargaining power of suppliers with economy of scale.

  • Bargaining power of buyers
The factor is a buyer would affect to price. Buyers of bulk products could change prices such as supermarket and McDonald and KFC. Because, they buy a lot of products than other small shop and business so they have much power than suppliers which mean forward integration. Super buyer always want to deal about price goes down and control.
  • Substitutes 
It is must be aware that consumers have a choice as buyers have a lot of alternative products. For example, if a company sell in the computer market, they should care about Table PC. These days, Table PC is substitute of personal computer(desktop). 

















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