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Understanding Strategic Management: Chapter Synthesis
Lorena O. Goneda
College of Business Administration, Notre Dame of Marbel University
CBME 101: Strategic Management
Krystianne Paul A. de Pedro, MBA, CPA
February 27, 2024
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Understanding Strategic Management: Chapter Synthesis
I learned that I learned that businesses operate in a constantly changing environment
influenced by external factors, categorized into three layers: physical, societal, and industry
environments. The physical environment includes natural resources, climate conditions, and
sustainability, requiring businesses to consider raw material availability, climate change, and
environmental regulations. Environmental scanning helps identify trends and risks that may
impact operations. The societal environment consists of political, economic, socio-cultural,
technological, demographic, and global factors. Government regulations, economic conditions,
and technological advancements shape business strategies, while population growth, education,
and lifestyle changes influence consumer preferences. Global trade agreements and
international relations also impact business expansion and competitiveness. The industry
environment includes customers, suppliers, competitors, creditors, employees, and government
agencies, all of which directly affect business operations, requiring strong relationships and
strategic planning.
To navigate these external influences, businesses must conduct environmental scanning,
monitoring, and competitive intelligence. These processes help track trends, assess risks, and
understand competitor strategies, allowing companies to adapt and make informed decisions.
Staying updated on external factors ensures businesses remain competitive, sustainable, and
responsive to changes in their environment.
I realized that businesses cannot control external environmental factors, but they can
prepare and adapt to them. For example, climate change is an ongoing concern, and companies
must find ways to reduce their carbon footprint and manage resource scarcity. Economic
fluctuations, such as inflation or recession, can affect consumer purchasing power, requiring
businesses to adjust pricing strategies and cost management. Technological advancements can
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make some industries obsolete while creating opportunities in others, so businesses must stay
innovative and invest in new technologies. Competition is inevitable in any industry, and
companies that fail to analyze their competitors risk losing their market position.
I also realized that successful businesses do not just react to external changes; they
anticipate and prepare for them. Companies that conduct regular external analyses are more
likely to identify risks early and create solutions before problems arise. Businesses that
understand societal trends can better meet customer demands and develop products or
services that align with changing lifestyles. Additionally, being aware of global developments,
such as trade agreements and emerging markets, can help businesses expand their reach and
increase profitability.
Application
I intend to intend to apply this knowledge by being more aware of how external factors
affect businesses and industries. As a student, I will observe how companies adapt to changes in
the economy, technology, and society. This will help me develop a strategic mindset and
understand how businesses make decisions. I will also stay updated on trends and current
events that impact industries, such as new technologies, environmental issues, and government
policies. This will allow me to analyze business challenges and opportunities in real-world
situations.
Furthermore, I will use this understanding in my studies and future career by developing
problem-solving skills and critical thinking. By learning how businesses respond to external
factors, I can prepare for future roles in management or entrepreneurship, making informed
and strategic decisions.
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References
LibGuides: Industry Research: PESTEL Analysis. (n.d.).
https://libguides.libraries.wsu.edu/c.php?g=294263&p=4358409
Loganathan, P. (2024, December 21). External Environment, Opportunities, Threats, Industry
competition and Competitor analysis. Pradeep Loganathan’s Blog.
https://pradeepl.com/blog/external-environment-opportunities-threats-industry-
competition-and-competitor-
analysis/#:~:text=The%20industry%20environment%20is%20a,gather%20and%20interp
ret%20competitor%20information.
Faldas, R. C. (2025). Industry environment analysis (Chapter 4). CBME 101: Strategic
Management.
Faldas, R. C. (2025). Societal environment analysis (Chapter 3).CBME 101: Strategic
Management.
Faldas, R. C. (2025). The physical environment analysis (Chapter 2). CBME 101: Strategic
Management.
