USING KM MODEL TO EXAMINE A FORM’S EXTERNAL ENVIRONMENT IN STRATEGIC ANALYSIS

Abstract: The sustainability of a firm mainly depends on whether the firm has an effective strategy to align its internal operations with changes in the external environment. This paper introduces the KM model, which is a framework that guides a comprehensive and systematic strategic analysis of a firm. This article focused on using the KM model to examine a firm’s external environment systematically. The KM model divides a firm’s external environment into four interdependent and strategically relevant layers. By understanding the changes and trends in each layer as well as the interactive relationships across these layers, companies could identify the emerging needs and trends in the external environment. The model facilitates an orderly and effective way to identify gaps between a firm’s internal operations and changes in its external environment. The KM model provides a platform for incorporating most existing strategic analysis tools to obtain a comprehensive view of a firm’s external environment, and supports companies to set their global strategic positions accordingly