The Texas Military Department defines three environments to operate in: Internal, External, and Future.
John Nash, highlighted in the 2001 film A Beautiful Mind, had a game theory focused on “dominant strategy.” This says that you must consider the industry landscape and your competitors’ behaviors. This Nash equilibrium says that your best guess of a competitor will be a guide to what you are going to do to compete in the industry.
Part of strategic planning is identifying the megatrends (technology advances, demographic shifts) that are altering your business environment. Then ask yourself:
- Who do we need to have strategic partnerships?
- What is our innovation roadmap?
- When will new opportunities arise?
- Where should we target (customers/geographies)?
- Why will our traditional competitive advantage remain strong?
(Source: BCG)
Has your company defined your three environments?
