This chapter explains several considerations for examining the external environment that executives must monitor to lead their organizations strategically. Executives must be aware of trends and changes in the general environment, as well as the condition of their specific industry, as elements of both have the potential to change considerably over time. While PESTEL analysis provides a useful framework to understand the general environment, Porter’s five forces analysis is helpful to make sense of an industry’s profit potential. Strategic groups are valuable for understanding close competitors that affect a firm more than other industry members. When executives carefully monitor their organization’s environment using these tools, they greatly increase the chances of their organization being successful.

Attributions

Figure  3.3:
Money by Ervins Strauhmanis is used under CC BY 2.0 Licence  (first);

Stock market quotes in newspaper by Andreas Polke is used under CC BY 2.0 Licence  (second);

Children reading on the couch by San José Library is used under CC BY-SA 3.0 Licence(third);

Sony Tablet S by Caesar Wong is used under CC BY-SA 3.0 Licence  (fourth);

Snohomish River 26715 by Walter Siegmund is used under CC BY-SA 2.0 Licence (fifth);

3D Judges Gavel by StockMonkeys is used under CC BY 2.0 Licence (sixth)

Figure 3.4:
Greenpark wind turbine arp by Blast is in the Public Domain (first);

Abolish child slavery by Bain News Service photograph is in the Public Domain (second);

Flag of Canada by E Pluribus Anthony is in the Public Domain (third);

Centre Block of the Canadian Parliament August 2005 by Michael Barera is used under CC BY-SA 3.0 Licence (fourth);

pocketchange by Cheryl DeWolfe is used under CC BY license (fifth)

Figure 3.5:
housing by Ben Salter is used under CC BY 2.0 Licence(first);

Lange-MigrantMother02 by Dorothea Lange is in the Public Domain (second);

GDP by LendingMemo.com is used under CC BY 2.0 Licence (third);

a Loonie by S. Rae is used under CC BY 2.0 Licence  (fourth);

Boutique de la rue des Frances Bourgeois 2010 by Francisco Gonzalez is used under CC BY license (fifth)

Figure 3.6:
Cupcakes by Joel Olives is used under CC BY 2.0 Licence (first);

Hunter and hunter’s rifle by Cano58 is used under CC BY-SA 3.0 Licence (second);

Family Photo by James Thompson is used under CC BY 2.0 Licence (third);

Bathroom scale by Magnus D is used under a CC BY 2.0 Licence (fourth);

Hemline (skirt height) overview chart 1805-2005 by H. Churchyard is in the Public Domain (fifth);

ray and my stuff, storage locker, dufferin by Anthony Easton is used under CC BY 2.0 Licence (sixth)

Figure 3.8:
Popcorn by Alan Cleaver is used under CC BY 2.0 Licence  (first);

Television by Wikiwoohoo is used under CC BY-SA 3.0 Licence  (second);

Atari 2600 Wood 4Sw Set by Evan-Amos is in the Public Domain (third);

MSI 865PE Neo2-P Motherboard by ProjectManhattan is used under CC BY-SA 3.0 Licence (fourth);

3PAR SAN in the server room by Alexis Lê-Quôc is used under CC BY-SA 3.0 Licence (fifth)

Figure 3.10:
Landfill face by Ashley Felton is in the Public Domain (first);

MD Climate Change Summit by Maryland GovPics is used under CC BY 2.0 Licence (https://creativecommons.org/licenses/by/2.0/) (second);

recycling by John Lambert Pearson is used under CC BY 2.0 Licence (https://creativecommons.org/licenses/by/2.0/) (third);

City cut out by Cowboydave 1 is in the Public Domain (fourth);

Organic Produce by Alanthebox is in the Public Domain(fifth)

Figure 3.11:
Re-computer by Jakub Jankiewicz is in the Public Domain (first);

Competition and Antitrust Law by LexisNexis Canada is used under a CC BY 2.0 Licence (second);

Not Wheelchair Accessible by Carlos Martinez is used under CC BY 2.0 Licence  (third);

Hard hat 20111111 by Batholith is in the Public Domain (fourth);

Nutrition facts for the Mega Kat by Brian Moore is used under CC BY-SA 2.0 Licence  (fifth)

Figure 3.13:
Electric car charging Amsterdam by Ludovic Hirlimann is used under CC BY-SA 2.0 Licence(top);

Mazda Mazda3 2014 by Karlis Dambrans is used under CC BY 2.0 Licence (left);

2011 Ford F-150 crew cab — NHTSA 2 by US National Highway Traffic Safety Administration is in the Public Domain (middle);

Car dealership in Rockville Maryland Jeep by Christopher Ziemnowicz is in the Public Domain (right);

Airbus A380 blue sky by Axwel is used under CC BY 2.0 Licence (http://creativecommons.org/licenses/by/2.0/) (bottom)

Figure 3.16:
Shrine 93rd circus 2014 by Paula Lively is used under CC BY 2.0 Licence (first);

Rolled oats by Hankwang is in the Public Domain (second);

Airbus A380 blue sky by Axwel is used under CC BY license (third);

Sugar White by Donovan Govan is used under CC BY-SA 3.0 Licence (fourth);

Harry the K’s Restaurant Menu Board, Citizens Bank Park by Go Phightins! is used under CC BY-SA 3.0 Licence (fifth);

Encyclopedia Beliana 1 by Pepo13 is used under CC BY-SA 3.0 Licence (sixth);

Volvo bobtail semi-truck (LandSpan) by Fourthords is used under CC BY-SA 3.0 Licence (seventh);

Callcentre by Petiatil is in the Public Domain (eighth)

Figure 3.19:
Bacon Hegenburger by pointnshoot is used under CC BY 2.0 Licence (first);

A surfeit, nay panoply, of meat by rjp is used under CC BY-SA 3.0 Licence (second);

Turkey Mailman by Eric is used under CC BY 2.0 Licence (third);

Smith Premier Typewriter by Jon Sullivan is in the Public Domain (fourth);

Alumínium házas Apple MacBook by Shelf  is in the Public Domain (fifth);

CN Class M-3-d No 2141 (6840561316) by Peter Broster is used under CC BY 2.0 Licence (sixth);

Europa flyer truck by Jonnie Nord is used under CC BY-SA 3.0 Licence (seventh);

Satellite-dish cropped by ZeiP is used under CC BY-SA 3.0 Licence (eighth);

Harmony 659 by Henrychan2000 is in the Public Domain (tenth)

Figure 3.21:
South Africa-Money-Old01 by NJR ZA is used under CC BY-SA 3.0 Licence (first);

Diamond ring by Koshyk by Koshy Koshy is used under CC BY 2.0 Licence(second);

Microchips by Zephyris is used under CC BY-SA 3.0 Licence (third);

Acer Aspire 8920 Gemstone (almost) by Georgy by Georgy90 is used under CC BY-SA 3.0 Licence (fourth);

Big Box by Huhu is in the Public Domain (fifth);

Hertz car rental office Livonia Michigan by Dwight Burdette is used under CC BY 2.0 Licence (sixth)

Figure 3.25:
Chef Geovanis by Chef Giovanis is used under CC BY-SA 3.0 Licence (top);

Arby’s turkey bacon sub by ChildofMidnight is used under CC BY 2.0 Licence  (middle left);

Swiss Chalet quarter chicken by Tabercil is used under CC BY-SA 3.0 Licence  (middle right);

CFC fried chicken Bandung by Midori is used under CC BY 2.0 Licence (bottom left);

Burger King Whopper Combo by Newsflash is in the Public Domain (bottom centre);

Crispy Waffle’s Crispy Waffle – Arnold Gatilao by Arnold Gatilao is used under CC BY 2.0 Licence  (bottom right)