This article starts by exploring the meaning of ‘the wider environment’: the internal environment, the near (or competitive) environment and the far environment.
The competitive environment
The competitive, or near, environment is partly to do with the contests for market share between, for instance, a couple of banks or ice cream manufacturers. However, the term means more than that; many organisations compete for staff, for reputation, for funding or for suppliers, as well as for customers. A charity and a community service might compete for funds to run a drug rehabilitation service; schools and colleges might compete for students; campaigning organisations might compete for government and media attention.
We can envisage competitors in a number of ways beyond companies competing for your customers:
An organisation may be one of a few similar service providers or product manufacturers — there are not many passenger jet manufacturers in the world, let alone in one country. Another may be one of thousands of comparable organisations — small shops or schools, for instance — which may or may not have strong local competition from other shops or schools.
You should think of the competitive environment as comprising the other organisations whose actions influence yours, and which your organisation in by its actions. Thus it includes organisations that supply you with services and materials, professional groups that are strongly represented in your organisation, organisations that you collaborate with to provide services or products, and other organisations that provide similar services.
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