The European Brewing Industry Case Study
The European Brewing Industry (Case Study)
For many companies in the UK and the United States the period 1950 to 1970 seems in retrospect to have been one of almost uninterrupted straight-line growth in a relatively stable environment. In such a situation managers look effective and perhaps they are effective if they “do the same thing over and over again and appoint successors in their own image”.
Then in the 1970s a big change took place. “Doing the same thing” became almost a recipe for corporate disaster. The reason for this was simple. Instead of being routine and fairly predictable, the business environment had become increasingly volatile; according to many managers the pace of change had accelerated (or so they thought). This process has continued into the 1990s, and at the same time many managers would claim that the complexity of the environment they face has also increased.
As a consequence of these changes, the analysis of the external environment has become a key task within the process of creating strategy. An understanding of the nature of the environment is important, as is a familiarity with the tools and frameworks of analysis. The ability to understand the impact of the external environment upon an organisation will not guarantee strategic success, but to ignore the external environment is highly likely to make failure a distinct possibility.
Approaches to Analysing the External Environment
Monitoring and evaluating the external environment is an important issue for managers because changes in the external environment imply changes in strategy. Johnson and Scholes provide a framework for analysing the business environment.
The framework is a general one so you must remember:
• To take a holistic view;
• To adapt what you read to the circumstances;
• That the most difficult aspect of environment...
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