Strategy and the Strategic Management Essay Example | Topics and Well Written Essays - 1000 words

Strategy and the Strategic Management - Essay Example Knowing the firm’s external environment is important in the strategic management process because it affects how value is generated and how activities could be carried out under the influence of technological change, demographic trends, cultural trends, the economic climate, legal and political conditions, and other global events. Using the structure-conduct-performance (S-C-P) model allows a systematic analysis of the firm and its environment. This model: (1) helps a firm identify the attributes of its industry’s structure that constrains the firm’s strategic alternatives and performance, (2) helps it decide how to conduct itself by crafting the most appropriate strategies, and (3) take into account the performance of the firm, the industry, or the economy. The S-C-P model helps a firm develop the tools it can use to analyze threats in its competitive environment. The â€Å"five forces framework† is a tool that looks at five threats to the firm.These threats affect the firm, its performance, and how its competitors would react, thereby helping the firm determine what strategies it needs to develop and execute to overcome problems arising from each of these forces. Complementors are another important force that a firm has to contend with because these firms add value to the firm’s products. A firm can use compliments as a means of gaining an advantage over other competitors, e.g. Microsoft encouraging software companies to develop games for its X-box game player instead of developing games for its competitors. The S-C-P model can also help firms analyze strategic opportunities by identifying generic industry structures and available strategic opport