What are the six segments of the general environment affecting an industry and its firms?

  

“Union Pacific Corporation”Please respond to the following:Perform an analysis of the social / demographic, technological, economic, environmental / geographic, and political/legal / governmental segments to understand the general environment facing Union Pacific.Describe how Union Pacific will be affected by each of these external factors.
Business Administration Capstone
BUS499
The External Environment: Opportunities, Threats,
Industry Competition, and Competitor Analysis
Objectives
Upon completion of this lesson, you will be
able to:
Identify how the six segments of the general
environment affects an industry and its firms
Identify the five forces of competition that
impacts an industry
Analyze the external environment for
opportunities and threats that impact the firm
Supporting Topics
The General, Industry, and Competitive
Environments
External Environment Analysis
Segments of the General Environment
Industry Environment Analysis
Interpreting Industry Analysis
Strategic Groups
Competitor Analysis
Ethical Considerations
General, Industry, and Competitor
Environments
Six Dimensions of Environmental Segments
External Environmental Analysis

Opportunities
Threats
Scanning
Monitoring
Forecasting
Assessing
PROPERTIES
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Segments of the General Environment

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Demographic Segment
Economic Environment
Political/Legal Segment
Sociocultural Segment
Technological Segment
Global Segment
Segments of the General Environment,
continued
Physical Environment Segment
Deals with potential and actual changes in the
physical environment
Business Practices
Environmental sustainability
Energy Consumption
Reduction of Environmental Footprints
Industry Environment Analysis
Industry
Group of firms producing products that are close
substitutes
Five Forces of Competition
Interpreting Industry Analyses
Effective Industry Analyses
End result of careful studying and
interpretation of data
Multiple sources
Unattractive Industry Characteristics
Attractive Industry Characteristics
Strategic Groups
What is a Strategic Group
A set firms that emphasize similar strategic
dimensions
Use similar strategies
Strategic Dimensions in a Strategic Group
Limitations of Forming Strategic Groups
Strategic Groups Implications
Threat of New Entrants
Barriers to Entry
Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages independent of scale
Government policy
Expected Retaliation
Bargaining Power of Suppliers
Supplier Group Powerful
Dominated by a few large companies
Substitutes not available
Industry firms not a significant customer
Suppliers goods are critical to success
High switching costs
Credible threat to integrate forward
Bargaining Power of Buyers
Customers Powerful
Large portion of industrys total output
Sales account for significant portion
Switch to another product
Products are standardized
Threat of Substitute Products
Perform similar or the same functions as a
product that the industry produces
Strong Threat
Prices may be lower
Performance capabilities are equal or greater
Intensity of Rivalry Among Competitors
Factors to Affect Intensity
Numerous or equally balanced competitors
Slow industry growth
High fixed costs or high storage costs
Lack of differentiation or low switching costs
High strategic stakes
High exit barriers
Competitor Analysis

Future Objectives
Current Strategy
Assumptions
Strengths and Weaknesses
Ethical Considerations
Following Laws and Regulations
The line between legal and ethical practices
can be difficult to determine
Practices Considered Legal and Ethical
Respect the principles of common morality
and the right of competitors
Appropriate Guidelines
Summary
The General, Industry, and Competitive
Environments
External Environment Analysis
Segments of the General Environment
Industry Environment Analysis
Interpreting Industry Analysis
Strategic Groups
Competitor Analysis
Ethical Considerations

Introduction:

Union Pacific Corporation is a leading transportation company that provides rail transportation services in the United States, serving a diverse group of markets including agriculture, automotive, chemicals, and energy. With the vast changes happening in the external environment, it is important to analyze the social/demographic, technological, economic, environmental/geographic, and political/legal/governmental segments to understand the general environment facing Union Pacific.

Description:

Union Pacific’s business environment is one that is influenced by several external factors. A detailed analysis of the social/demographic, technological, economic, environmental/geographic, and political/legal/governmental segments provides an understanding of how these factors affect Union Pacific. The demographic segment influences Union Pacific through the size, distribution, and growth rate of the population, which affects the demand for transportation services. The technological segment affects Union Pacific through advancements in transportation technology, which leads to efficiency and cost reduction. The economic segment influences Union Pacific through factors such as interest rates, inflation, and employment, which affect demand for transportation services. The environmental/geographic segment affects Union Pacific through issues such as climate change, environmental sustainability, and energy consumption. The political/legal/governmental segment influences Union Pacific through regulations, policies, and government initiatives on transportation infrastructure.

In summary, the external environment of Union Pacific Corporation needs continuous scanning, monitoring, and forecasting to assess the opportunities and threats that impact the firm. An understanding of the general environment will help the company make informed strategic decisions that positively affect its performance within the industry.

Objectives:

1. Understand the importance of analyzing the external environment for a business.
2. Identify the six segments of the general environment and their impact on the industry and firms.
3. Describe the five forces of competition that affect an industry.
4. Analyze the external environment for opportunities and threats that affect a firm.

Learning Outcomes:

By the end of this lesson, learners will be able to:

1. Conduct an analysis of the social/demographic, technological, economic, environmental/geographic, and political/legal/governmental segments to gain a thorough understanding of the general environment facing Union Pacific.
2. Explain how each of these external factors will affect Union Pacific and its operations.
3. Identify and evaluate the five forces of competition that Union Pacific must contend with in its industry.
4. Interpret industry analysis data effectively to identify both attractive and unattractive characteristics of Union Pacific’s industry.
5. Recognize the importance of ethical considerations when analyzing and responding to the external environment.
6. Apply strategies for monitoring, scanning, and assessing opportunities and threats in the external environment.

Solution 1: Analysis of Union Pacific’s General Environment

Demographic Segment: Union Pacific will be affected by changes in population size, age distribution, and education level. As the population grows, there will be an increased need for transportation services. An aging population may require specialized transportation services. If there is an increase in the education level of the population, it may lead to increased demand for high-tech solutions that facilitate better supply chain management.

Technological Segment: Technological advancements in transportation, data management, and analytics can affect Union Pacific’s operations. For instance, big data analytics can be used to optimize operations, predict failures, and improve supply chain visibility.

Economic Environment: Changes in economic conditions can affect Union Pacific’s operations. For example, inflation can increase costs of raw materials, wages, and fuel expenses. Economic recessions or downturns can lead to reduced demand for transportation services.

Environmental/Geographic Segment: Union Pacific may be affected by extreme weather events, particularly due to flood-prone areas. The company can also be impacted by environmental regulations.

Political/Legal/Governmental Segment: Government regulations, policies, and political issues can affect Union Pacific’s operations. For example, changes in the government’s approach to issues such as trade agreements, tariffs, and transportation regulations can have significant effects.

Global Segment: International factors that can affect Union Pacific include government regulations, changes in customer preferences, and supply chain disruptions.

Solution 2: Opportunities and Threats for Union Pacific

Opportunities: Union Pacific can leverage technological advancements to optimize operations and improve service delivery. There is also an opportunity to benefit from increased demand due to population growth and urbanization. Union Pacific can improve its sustainability and reduce its carbon footprint, thereby attracting environmentally conscious customers.

Threats: Union Pacific faces several threats, such as shortages of skilled workers and increased competition from other companies that offer similar services. The company may be impacted by changes in government regulations, trade agreements, and political instability. Extreme weather events and natural disasters can also pose threats to Union Pacific’s operations.

Suggested Resources/Books:
1. “Strategic Management: Concepts and Cases: Competitiveness and Globalization” by Michael A. Hitt, R. Duane Ireland, and Robert E. Hoskisson
2. “Business and Society: Ethics, Sustainability, and Stakeholder Management” by Archie B. Carroll and Jill Brown
3. “Competitive Strategy: Techniques for Analyzing Industries and Competitors” by Michael E. Porter

Similar Asked Questions:
1. How does the physical environment segment of the general environment impact companies like Union Pacific?
2. What strategies do firms in a strategic group typically use in order to remain competitive?
3. How do large suppliers, like those in the railway industry, impact the bargaining power of buyers?
4. How can companies like Union Pacific effectively monitor and analyze potential threats in the external environment?
5. What ethical considerations should companies like Union Pacific keep in mind when making business decisions?

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