When I was in university, this was one of my favorite examples, which still remained in my head and I always like pierced ears. What is this syndrome?
“In a pot full of water, put a frog. Gradually, scientists began to warm water. The frog is granted, it becomes a nice, water is warming while, imperceptibly boiled frog. Made the same experiment with another frog, but this time the water is in a state of boiling, dropping it into this hot water, the frog jumps and saved from cooking. “
This experiment was designed to demonstrate what could be the consequences if not carefully monitor changes occurring in the surrounding external environment.
This experiment is a proof, so that if a company feels at home and not paying attention to what is happening, no traces of any changes, thinking that the water there is no way to “warm up”, then at some point you to prove that the water reached its boiling point and is already late rebound – “boiling” is inevitable.
It is the role of the management of a company is constantly wary, using in-depth analysis and research on changes in the external environment.
That is how I would like to sort the main factors influencing changes in the external environment.
Competition – This is the first factor that has a major impact on the external environment. Management must constantly monitor: new companies in the same business and monitor existing ones.
I would like to mention one example from my work as a sales representative at a large company.
“On a teambuilding that our company organized after commercial director told us, what are our goals, mission, how he sees the future of the company, he said:
Recently on the market, we faced a new “enemy”, we have a new competitor.
In the heads of all of us appeared that perhaps the market has a new company in the same field. But we were all lied. On the wall behind him is a picture of the already known for years all of our product. It is true that this product had a large market share in only one region, and in general in the country, its market share was very low. But the problem was that in the last few years, competitors were invested in this product in order to capture a larger market share. All colleagues we knew that, but surprised us was due to the fact that our guide, only now it was noticed. “
Here for me it is an example, when managers do not monitor what the competition is doing and find themselves in a position of “boiled frog”.
Economic situation – this it is second factor of which should like that turned attention. Here the management should pay particular attention to:
Micro and macroeconomic indicators;
The financial policy of the country;
Banking policy;
Tax and social policy;
Interference of government in the sector;
Demographic policy.
It is important to note that it is essential and the economic situation around the world. An example of this is the global financial crisis, which occurred in the last few years. During this period, many companies were forced to fail. The reason for this to happen was that no company had not expected such an outcome globally. Here, management must focus on ways to assess the risk of playing simulations, how businesses will react if it comes to a crisis. Larger companies were able to keep financial stability, but many others failed.
Impact on the environment – a factor which is not paying much attention. I think this is an important factor, because the management has to monitor natural disasters, Javan polluted air and aqueous s climate change. Depending on what industry you develop a business, there is an option to influence one or more factors. Take, for example, a hotel located in the tourist area. If the area is summer, but in most of the rainy weather, this hotel will have drastic losses. Here management must devise mechanisms to keep a large percentage of the reserved rooms.
Depth analysis of each of these factors individually or collectively, will give management a clear picture of how the company is developing. To plan the future of the company and what risks hiding it. Therefore business must devise mechanisms to prevent “boiling water”. Here are some of them:
Selection of the management team – where vacancy for a senior position, you should carefully check the possible applications;
The use of consulting firms – as and good Specialists that we have of available sometimes it is necessary that to turn to consultancy business in certain sphere. Whether when we have need from appointment of new people that to Sociological study whether that to do analysis of market share and etc;
Use of technological process – in these days when Technology mark great boom, investment in new software, new hardware, new production machines independently from price it is always in plus of business.