The External Environment

The External EnvironmentThe Broad EnvironmentSocio-cultural ForcesGlobal Economic ForcesGlobal Technological ForcesGlobal Political/Legal ForcesThe Task EnvironmentCompetitive ForcesExternal Stakeholders and Environmental UncertaintyPartnering with External StakeholdersStrategic GroupsKey Points SummaryEnd Notes2 CHAPTERJust like the steel and auto in-dustries during earlierdecades, the music industry isunder siege. In recent years,the technological, economic,legal, and competitive forceshave conspired to alter adecades-old business traditional music recordingand production companies inthe $40 billion music industryare being forced to evolvefrom selling products to simplyproviding a CDs each cost about$.50 to make, but retail for$ or more. The $ price covers the cost ofproduction, marketing, distribu-tion, royalties to the artists, andpercentages for the record com-panies and the retailers. In amajor settlement with recordcompanies, the Federal TradeCommission recently concludedthat consumers may have over-paid more than $450 million forCDs in the past three years.

broad environment to some degree, the emphasis in this book generally will be on analyzing and responding to this segment of the environment. The most im-portant elements in the broad environment, as it relates to a business organization and its task environment, are global socio-cultural, economic, technological, and political/legal forces.

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