strategic management business environment scanning general

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Strategic Management Business Environment Scanning General

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Strategic Management

Business Environment Scanning

General

Business Environment ScanningLecture Outline

• Layers of the Business Environment

• The Macroenvironment

• PESTEL

• Porter’s National Diamond

Business Environment Scanningand SWOT Analysis

• Strengths ) Analyses organisational

) resource capability.

• Weaknesses ) Internal Analysis

• Opportunities ) Analyses business

) environment.

• Threats ) External Analysis

Critical Success Factors

• Those product and service features that are particularly valued by customer groups and, therefore, where an organisation must excel in order to outperform competitors.

• Typical CSFsReputation Architecture InnovationAfter-sales serviceDelivery reliabilityTestingTechnical quality

Layers of the business environment

Understanding the Macro-Business Environment

• Diversity– Many different influences (or just a few)?

• Complexity– Interconnected or isolated influences?

• Speed of change (particularly IT)– Turbulent and Chaotic?

or– Placid and Predictable

Nature of Business Environment(Emery and Trist)

Complex Dynamic

Slow SPEED OF Fast CHANGE

Many

NUMBER OFINFLUENCES

Few

Complex Stable

Simple Stable

Simple Dynamic

Macroenvironment – PESTEL

Macroenvironment – PESTEL

Political• Government stability• Taxation policy• Foreign trade

regulations• Social welfare

policies

Economic• Business cycles• GNP trends• Interest rates• Money supply• Inflation• Unemployment• Disposable income

Macroenvironment – PESTEL Sociocultural

• Population demographics

• Income distribution• Social mobility• Lifestyle changes• Attitudes to work and

leisure• Consumerism• Levels of education

Technological• Government spending on

research• Government and industry

focus on technological effort

• New discoveries /developments

• Speed of technology transfer

• Rates of obsolescence

Macroenvironment – PESTEL

Environmental• Environmental

protection laws• Waste disposal• Energy consumption

Legal• Competition law• Employment law• Health and safety• Product safety

Key Aspects of PESTEL Analysis

• Not just a list of influences

• Need to understand key drivers of change

• Focus is on future impact of environmental factors

The Key Driver of Change?Globalisation

Determinants of National Advantage in a Global Business Environment

• Some countries are more competitive than others

• Some industries within countries are more competitive than others

Porter’s Diamond The Determinants of National Advantage

.