Stage 1 of Strategic ManagementEnvironmental Analysis

2

Influences in Strategy

• 1960s (Strategy and Structure; Corporate Strategy)• 1963 Harvard business conference leads to SWOT analysis• Boston Consulting firm (BCG) founded in 1963 “strategy boutique”

– Created the portfolio analysis

• 1980s (Porter’s 5 forces)• 1990s (Resource based view of the firm)

Internal Analysis2. Internal Analysis STRUCTURE – the way its organized

- the chain of command

CULTURE – pattern of beliefs values and expectations

RESOURCES – are the assets that constitute raw materials, people, financial and fixed assets

•STRENGTHS

•WEAKNESSES

1963 Strategy Boutiques

• Strategy Boutique is a niche management consultancy

• Management and Business Strategy Consultancy

1980s (Porter’s 5 forces)

-Identify & classify the orgn’s resources. -Appraise SW related to competitors.-Identify Opportunities for better utilization of resources

-Identify the ogrn’s capabilities-What can the orgn do more than the competitors?-Identify input resources per capability & complexity of each capability

Appraise the rent-generatingpotential of resources &capabilitiesa)Potential for sustainable advantageb) Appropriability of their returns

Select a strategy that best exploits the orgn’sresources and capabilitiesrelative to opportunities

-identify resource gaps that needs to be filled -invest in replenishing, augmenting and upgrading of organizations resource base

RESOURCES CAPABILITIESCOMPETITIVEADVANTAGE

STRATEGY

1 2 3 4

5

Two Parts of Environmental Analysis

1. Task environment2. Societal environment

Internal Factors Analysis Summary

EXTERNAL FACTORS WEIGHT RATINGWEIGHTED

SCORE REMARKS

STRENGHTS

WEAKNESSES

TOTAL 1.00

1.2.3.4.5.

1.2.3.4.5.

External Factors Analysis Summary

EXTERNAL FACTORS WEIGHT RATINGWEIGHTED

SCORE REMARKS

OPPORTUNITIES

THREATS

TOTAL 1.00

1.2.3.4.5.

1.2.3.4.5.

Structural Analysis of the Industry

Stakeholders Analysis

Why do a Stakeholder Analysis?

• to identify stakeholder’s interest in, importance to, influence over the intervention, programs and projects

• to identify local institutions and processes upon which to build•To provide a foundation and strategy for participation

STAKEHOLDERS ANALYSIS . . .To determine the stakeholders, use the Ws and Hs like:

•Who are the people or institutions with interest?•What are their degree of influence and control?

•What are the services being provided/offered?•What are their resources?•Why are they doing these?•Who are they serving?•Where are they located or concentrated?•How they deliver their services?

•How efficient, effective and economical are they operating?

Stakeholders Analysis . . .

CLASSIFICTION

• Influencers• Allies• Obstructions

STEP IN ANALYSIS

• List of stakeholders

• Activities, programs, interest• Programs, interest, roles • Degree of Influence

• Classify stakeholders

STAKEHOLDERS ANALYSIS. . .

Process in stakeholders analysis:

•BENEFICIARIES•VULNERABLE GROUPS•SUPPORTERS/ OPPOSITORS•RELATIONSHIPS

•EXPECTATIONS•BENEFITS•RESOURCES•CONFLICTING •INTERESTS

•POWER/STATUS•ORGANIZATION•CONTROL OF RESOURCES•PERSONAL CONNECTIONS•POWER RELATIONS

PLAN OF THEIR INVOLVEMENT:•INTERST, IMPORTANCE•EFFORT NEEDED•PARTICIPATION IN VARIUOS PROJECT CYCLE

IDENTIFY KEY STAKEHOLDERS

ASSESS INFLUENCE

PARTICIPATIONSTRATEGY

ASSESS IMPACTON THE PROJECT

STAKEHOLDERS ANALYSIS

STAKEHOLDERS

(GROUPS, AGENCY,INDIVIDUALS,ETC)

INTEREST AT STAKE

(RELATIVE TO THE MOVEMENT, ORGN)

EFFECTS TO ORGN

(+ 0 - )

IMPORTANCEOF THE

STAKEHOLDER

DEGREE OFINFLUENCE

OF THESTAKEHOLDE

R

IMPORTANCE AND DEGREE OF INFLUENCE ARE MEASURED AS :

U – UNKNOWN; 1- LITTLE OR NO INFLUENCE/IMPORTANCE; 2- SOME IMPORTANCE/INFLUENCE;3 – MODERATE IMPORTANCE/INFLUENCE; 4 – VERY IMPORTANT/SIGNIFICANT INFLUENCE; AND5 – CRITICAL PLAYER/VERY INFLUENTIAL

SWOT

INTERNAL ANALYSIS

EXTERNAL ANALYSIS

SWOT MATRIXSTRENGHTS (S) WEAKNESSES (W)

OPPORTUNITIES (O)

THREATS (T)

LIST 5-10 STRENGHTS LIST 5-10 WEAKNESSES

LIST 5-10 OPPORTUNITIES

LIST 5-10 THREATS

S-O STRATEGIES W-O STRATEGIES

S-T STRATEGIES W-T STRATEGIES

USE YOUR STRENGTHS TO TAKE ADVANTAGE OF THE OPPORTUNITIES

OVERCOME YOUR WEAKNESSES BY TAKING ADVANTAGEOF THE OPPORTUNITIES

USE YOUR STRENGTHSTO MINIMIZE OR AVOID THE THREATS

MINIMIZING YOUR WEAKNESSES AND AVOIDING THE THREATS

STRATEGIC MANAGEMENT OPTIONS

C R I T E R I AS-O S-T W-O W-T

1 2 3 1 2 3 1 2 3 1 2 3

MAGNITUDE

ACCEPTABILITY

RELEVANCE (VMO)

DOABILITY/ VIABILITY

COST-EFFECTIVE

IMPACT

SUSTAINABILITY

OTHERS

T O T A L

STRATEGIC OPTION PROGRAM/PROJECT TIMELINE REQUIRED RESOURCES

IDENTIFIED PROGRAM AND PROJECTS

STRATEGIC MANAGEMENT MODEL

ENVIRONMENTALANALYSIS

EXTERNAL

•OPPORTUNITIES•THREATS

INTERNAL

•STRENGTHS

•WEAKNESSES

MISSION

OBJECTIVES

STRATEGIES

PROGRAMS

PROJECTS

PROCEDURES

BUDGETS

STRATEGY FORMULATION

STRATEGY IMPLEMENTATION

EVALUATIONANDCONTROL

F E E D B A C K PERFORMANCE

ACTION PLANSTRATEGY ACTIVITIES TIMELINE BUDGET RESPONSIBLE REMARKS

STRATEGY # 1

STRATEGY # 2

STRATEGY # 3

STRATEGY # 4

ACTIVITY #1ACTIVITY #2ACTIVITY #3

Reference: Decal, Strategic Management Lecture to CBLU, 2012 www.slideshare.net Strategic Management Introduction to Strategy accessed July 27, 2012