The Competitive Environment is, perhaps, the most important of the 6 Environments that influence a company involved in marketing, business, International Business or e-commerce.
The degree to which one attends to the “other” environments is a consequence of the intensity of the Competitive Environment.
If the Competitive Environment is intense, meaning, you have a lot of companies trying to - copy your product and knock off your designs,- sell below your price, - use your same themes for advertising,- paying better wages to employees,- sell a slightly different product that can be substituted for your’s, it will be necessary to:
- utilize every resource in the technological environment,
- attend to all the considerations of the social/cultural environment
- carefully analyze trends in the economic environment
- monitor political movements and upcoming changes in the regulatory environment
- prepare contingencies for threats from weather extremes and the geographic environment.
If the Competitive Environment is NOT intense, then you don’t have to use the latest technology, because your customers will not be drawn to anybody else, you do not have to worry about the language considerations of the Social/Cultural Environment, because you have no competition who will provide better service, etc.,
While the Competitive Environment is perhaps the most powerful environment in terms of influencing whether we do, or don’t do certain things, it should be understood that the Geographic environment is also powerful in the sense that negative things effecting the planet can have long term negative consequences for the ability of companies to sustain their activity - examples include New Orleans and the time spent recovering from the hurricane and as well as regions in South Asia effected by the massive tsunami in December 2004