External Remote Environment Analysis
As mentioned in the previous papers that I submitted, this papers are all connected and the same
company will be use throughout the entire course . The writer must pay attention to that and continue to
note that some of the information will also be carry forward to the next paper. For this paper, the writer will
have to follow the instructions included hear below to respond to the questions raise at the end of the
instructions. the writer will use pear-review articles to support the facts in the paper.
When planning a vacation, you may do research on a variety of external factors that can impact the
quality of your trip. Some of these factors, such as transportation costs and flight delays or road
construction, will have a similar impact on the plans of a large number of travelers. Others, such as the
expected weather conditions and location of attractions, are related to the specific area in which you plan
to vacation.
Like travelers planning for a trip, organizations must carefully monitor the external environment in which
they plan to operate. Organizations have a number of tools to aid them in doing this successfully. A
General Forces Analysis encourages organizations to examine broad trends and forecasts that could
potentially impact a broad range of organizations. Porter�s Five Forces Analysis allows organizations to
more closely examine external forces that may impact profitability, which are closer to the specific
organization. Taken together, the results of these analyses provide a comprehensive picture of the
external environment of a specific organization.
EXTERNAL REMOTE ENVIRONMENT ANALYSIS 2
To prepare, review this Learning Resources at the bottom of the page. Begin searching for scholarly
peer-reviewed resources on General Forces Analysis.
(Note: You will also use the General Forces Analysis and Porter�s Five Forces Analysis in Part I of your
SSP.)
External Remote Environment Analysis
General Forces and Porter’s Five Forces analysis is a tool designed to help evaluate
competitive forces and the business strategy suitable for a firm in an industry it operates (Porter,
2008). If the forces in the industry operate wholesomely then it means that the industry is not
attractive. The industry becomes more vulnerable if the level of competition is higher. The paper
therefore uses Porters five forces to evaluate the industry Apple Inc., operates and not the firm
EXTERNAL REMOTE ENVIRONMENT ANALYSIS 3
itself. Therefore, on that premise, the assessment as well will apply to other firms in this
industry such as IBM, Nokia and others.
Computer and Smartphone manufacturing has become a key sector as the world adapt to
new forms of technology. The players therefore, must define their business before there analyze
them using the porters five forces (Harvard Business School Press, 2005). The threats and forces
in this market will not be similar to those in other markets outside such as Japan and China. The
five forces has horizontal and vertical forces that affect and industry and therefore require
analysis. Horizontal forces include threat of new entrants, competition in the same industry, and
threat of established rivals and substitute products. On the other hand, vertical forces are those
that originate from supply-chain or the vertical competition and include bargaining power of
suppliers and bargaining power of customers. In summary using General Forces and Porter’s
Five Forces analysis, it can be concluded that; the industry has low threats on new entrants,
bargaining power of the customers/buyers is low, there is a threat of substitute products,
suppliers have much bargaining powers and there is a significant level of rivalry among
competitors. Based on this analysis, the industry is open to greater opportunities in future. The
fact that the threat to new entrant is low; the company can use this opportunity to increase its
sales in future. Bargaining power of buyers is low and therefore, the industry can have an upper
hand hence will continue to reap handsomely. Threat to substitutes exists as different companies
have products that offer alternative products. The bargaining power of suppliers is high and this
is likely to increase the costs of supplies. The level of rivalry is significant hence, the industry is
expected to adapt to appropriate strategies to reach to the customers and win over them. As
discussed, these trends and forecasts have ramifications on the industry. To ensure that the
industry remains competitive, the firms must continue to invest in quality and increase
EXTERNAL REMOTE ENVIRONMENT ANALYSIS 4
marketing. The industry as well may face an increase number of new entrants if the industry is
perceived to be profitable.
Based on Porter’s five analysis, a number of factors may impact on the Apple Inc.,
profitability. One of the external forces that may affect profitability of the industry is the
increased level of competition and rivalry. This will push the company profitability low as the
firm adopts strategies to attract more customers. Higher level of bargaining power of suppliers
will also reduce profitability on the industry (Narayanan & Fahey, 2005). Other forces include
higher bargaining power, and increased number of substitutes. Other forces may include, stiff
government regulations among others. Potential opportunities created by the five forces include
increased number of customers through increased advertising. The industry is open to
opportunity as the market share is yet to be exploited as is low. Threats includes, increase threats
of new investors due to the perception that it is profitable. General Forces Analysis and Porter’s
Five Forces analyses is used to developing organizational strategy because it provides vital
information about the industry. Through this analysis, a firm like Apple gets insights on the
industry at large hence can adopt suitable strategies to enable it gain a competitive edge (Apple
Case Study, 2012).
The opportunities of these tools include, it is easy to use, and it provides insights about
the industry and allows a firm to understand the competiveness of the industry. The limitations of
the tool are that it may not provide accurate result because firms in an industry may vary due to
circumstances. The tool requires good analysis and it may take considerable time to understand
the industry as a whole because of the size. Therefore, this analysis is important and has
implication for practice. Apple Inc., can use this information to understand the industry and
adopt suitable strategies that can enable it achieve its goals. In such industry, it is expected that
EXTERNAL REMOTE ENVIRONMENT ANALYSIS 5
the company remains creative and innovative to remain competitive. The two questions that
should be considered in this analysis are; does the size of the industry affect analysis using
Porters Five forces? How can a firm use the tool to change its weakness into strengths?
References
Apple Case Study (2012). Apple Inc.: The Steve Jobs Effect. The Steve Jobs Effect, 1-16
Harvard Business School Press. (2005). Strategy: Create and implement the best strategy for
your business. Boston, MA: Author.
EXTERNAL REMOTE ENVIRONMENT ANALYSIS 6
Narayanan, V., & Fahey, L. (2005). The Relevance of the Institutional Underpinnings of Porter’s
Five Forces Framework to Emerging Economies: An Epistemological Analysis. Journal
of Management Studies, 42(1): 207-223.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review,
86(1), 78–93.
