Environmental AnalysisIntroductionThere are three factors that play a major role in deciding the constraints, opportunities and threats that any business will face. The remote environment is the first factor that includes factors that originate outside the operational situation of any company, such as technological and/or economic factors. Industry environment is the second factor that influences the firm's prospects originating from its industry environment, such as competitive rivalry and bargaining power of buyers and suppliers. The third and final factor is the operating environment which consists of factors that influence the competitive situation of a company which includes factors such as competitive position, suppliers, customers and creditors. These three sets of factors represent the challenges that a particular company faces in attempting to attract or acquire the necessary resources and profitably market its goods and services (Pearce 2005). Remote Environment One factor in the remote environment for Wabtec is the technology area. To avoid obsolescence and promote innovation, a company must be aware of technological changes that could have an influence on the industry (Pearce, 2005). Creative technological adaptations can suggest possibilities for new products, for improvements in existing products, or in production and marketing techniques (Pearce, 2005). A long-term goal Wabtec faces in this space is product innovation. The company must introduce distinctive and innovative new products in 2007 and beyond to support emerging consumer trends. Wabtec faces competition in product innovation from Lockheed Martin, their largest competitor, and this may have an effect on the organization for years to come. Finding the right balance between research and development alongside a low cost and pricing strategy will require careful planning. Industry Environment The degree of competition in an industry depends on factors such as the threat of new competitors and/or the size of their current competitor. To set a strategic agenda for dealing with its competitors, a company must understand how they work in its industry and how they affect the company in its particular situation (Pearce, 2005). The threat posed by modern products or services is a major concern for Wabtec. With competitors like Lockheed Martin gaining ground on Wabtec, the company must keep its differentiated products competitively priced and improve customer satisfaction. Wabtec must set a long-term goal to improve its research and development to help accelerate growth and profits.