Strategic Process and the External Environment Discussion

Strategic Process and the External Environment Discussion
Components of the Task Environment
Task environment components have a major influence on whether the organization succeeds or failures to fulfill its vision and objectives. In a company’s manager should find an appropriate alignment between firm’s objectives and its environment. A company’s environment is composed of both the external and internal factors. Task environment as a component of external environment comprises on factors such as competitors, buyers, suppliers complimentary products and substitute products.
The company’s task environment like any other has been affected by market forces. The five force model by Michael Porter influences the company’s profitability and share prices. Buyer’s bargaining power has forced the company to lower products’ prices while improving their quality. This has affected the product performance in the market. Threat from substitute goods has forced the share prices to drop while the company strives hard to produce quality products at lower prices. The firm operates in an industry with few suppliers; this has affected profitability since the suppliers choose to raise the material costs at their will. Competition rivalry has been influenced by cost structure, competition structure, demand and supply forces and type of products. Unless, the company responds to the influences of such forces, it might lose its market share to the competitors. Other forces that influence the firms operations are economical, social-political, technological, legal, internal forces and demographic

Six characteristics of strategic thinking
To succeed in the competitive market environment that is influenced by internal and external forces, a company should implement strategic thinking. It helps by focusing more on the Company’s strength while minimizing weaknesses. The following constitutes attributes of strategic thinking that contribute to a company’s future success.
Strategic planning should be simple; Simplification of complex activities will make the strategic objectives more understable to all the stakeholders in a firm.
Strategic planning directs to ask right questions; the use of direct questions to solve complex challenges in the organization would help the management to understand the forces in the market. Then formulate efficient solution to the problems.
Prompts Customization; There is need to acknowledge that all the problems cannot be solved using a single strategic planning. Prompting customization states that each problem should be tackled using its own strategic thinking.
Strategic thinking usually provides a way for future planning of the company. As a result, the success of the company will be more defined.
Strategic planning has been characterized by reduction of error margins. This will help to avoid irrational decisions that might cause a company to fail in the industry.
Strategic thinking should offer a direction where the company is heading with its operations. With a good strategic thinking plan, the management will provide directives that can be easily followed by the employees.