Identifying External Factors Influencing Performance

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Rapid technological changes create a dynamic business environment that could influence companies' performance in the near or medium term, and sometimes even their survival. Some large companies

Factors Influencing Business Performance
Figure 6.5 Searching actively for external factors influencing business performance

operating globally already have in place their own systems for the continuous scanning of the business environment and the identification of changes that would require preparing strategic responses.

Identifying these changes requires forward focused and lateral thinking which looks consistently at the alternative possible outcomes of technological changes whichmay confrontthe company's objectives and position. This forward focused thinking starts from the present and explores possible future developments and changes that can impact upon company performance (Fig. 6.5).

It begins with the identification and monitoring of trends of changes and emerging technological issues. Ensuring that we are considering all possible sources of change requires scanning the 'horizon' and beyond it (see Fig. 6.5), across related areas of the business environment. Even though our focus may be on technologies, we should not observe only upcoming technologies, but also developing trends in accepting new technologies, like for instance solar powered or electric cars, new political directions or regulations favoring renewable energy or putting an ever increasing price on carbon, that can affect a company's performance, thus threatening the company's market position, or opening new opportunities. These factors or the related changes thereof would come broadly from the areas summarized in Table 6.1.

Figure 6.5 shows that the impact of these factors, other trends and emerging changes also move inwards towards a company's operations, thus affecting critical decisions on operational issues and performance.

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