Competitive Advantage Requires Awareness Of Internal And External Factors

973 Words Nov 23rd, 2016 4 Pages
For an organization to achieve competitive advantage requires awareness of internal and external factors in a relational context. Categorically, external factors are political, economic, sociocultural, technological, ecological, and legal in nature. After the Brexit Referendum passed, the value of the pound decreased dramatically impacting consumer confidence (bbc.com, 2016). This single event encompassed political, economic, sociocultural, and legal (PESTEL) factors that caused upheaval for businesses in the United Kingdom and abroad. Rothaermel defined the organization’s external environment as all factors with the potential to alter the competitive advantage creating opportunities and threats; considering the global nature of trade and economies, this potential is amplified.
Osterwalder and Pigneur (2010) described external factors of demand as the circumstances, with respect to design drivers and constraints, that reveal the position of the business model (BM) and provides a juncture for discerning adjustment; these factors empower the organization to deliberate on the impact of new trends, evaluate how the BM may evolve, and prompt innovation. The role of external factors serves to apprise the BM designer of trends and events significant to the organizational competitive advantage, affording the BM designer the opportunity to evaluate the current BM and determine if changes are necessary. Although it is too soon to determine if there are indelible adverse consequences,…

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