...2 2.1 The General Environment The General Environment 2.2 Scanning, Monitoring, and Forecasting Changes in the Environment 2.3 Scenario Planning 2.4 PEST Analysis 2.5 SWOT Analysis 2.6 The General and the Competitive Environments Key Work Strategic decision making under conditions of uncertainty Key Work Strategic inflection points and their impact on strategy Tools and Techniques Writing a PEST analysis Tools and Techniques Undertaking scenario planning ➜ Main Reference Schoemaker, P.J.H. (1995). Scenario planning: a tool for strategic thinking. Sloan Management Review, 36(2), 25. Learning Objectives After completing this chapter you should be able to: • Define what constitutes the general environment • Evaluate the role of scanning and monitoring in detecting environmental trends • Apply scenario planning to decision making in uncertain environments • Evaluate PEST as a framework for analysing the macro-environment • Explain the use of SWOT analysis • Evaluate the relationship between the general and the competitive environment 37 Introduction In the previous chapter we looked at what strategy is and introduced a number of different perspectives on strategy formulation. We addressed the importance of values in determining why an organization exists, and looked at how an organization’s values, its vision, and its mission guide individuals’ behaviour by signposting what is important to the organization. We explained the importance...
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...Henry: Understanding Strategic Management The General & Competitive Environment (Slides based on Chapters 2 and 3) Key concepts we will cover: • Analysing the General Environment – PEST analysis – Risk & Scenario Planning • Analysing the Competitive Environment – Porter’s 5 Forces model – Porter’s Strategic Group Analysis – Hypercompetition The General Environment • The external environment facing the organization consists of: • General environment • Competitive environment • The changes that occur in the general environment transcend organizations and industries • The competitive environment consists of the industry and markets in which an organization competes Some Interactions Between Businesses & Their Environment Customers Shareholders & Creditors National & Local Governments Media Suppliers Competitors Business Support Groups Wholesalers Public Opinion The Organisation Foreign Governments Social Activist Groups Local Communities Employees Adapted from K Davis & W C Frederick “Business and Society: Management, Public Policy, Ethics”, 5th Edition, McGraw-Hill, 1984 The General Environment • The figure shows the relationship between the organization and its external environment • Other things being equal, it is the competitive environment that has the greatest impact on the organization Figure 2.1 The General Environment • PEST analysis is useful for scanning the general environment • PEST is political, economic, social, and...
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...Case Analysis and Methodology Principles of Management (MGMT1120) Contents: 1. What is a business case? 2. Why use cases? 3. Is there an analysis framework to follow? 4. Case Analysis Model a. Problem Identification b. Environmental Analysis c. Creative/Practical Strategic Alternatives d. Decision Criteria e. Select Appropriate Alternative/New Strategy(s) f. Develop an implementation plan 5. Evaluate the results 1|P age 14 1. What is a business case? A business case is a “story” or “narrative” describing a problem or problems in an organization. The organization can be a profit, not-for-profit, or public sector organization. All organizations experience business problems which management must solve. Cases have been written on such organizations as Apple, Microsoft, Y.M.C.A and Royal Bank. Examples of cases are end of each chapter of your text. The “story” or “narrative” often contains additional information which gives insights into the causes of the problems. Sometimes, the case will actually propose possible alternative solutions to solving the problem. Many cases are written from the viewpoint of the manager/leader that recognizes the problem and is under pressure to find a solution. 2. Why use cases? At the JR Shaw School of Business, we take an applied approach to learning. As a student, you learn concepts/models and theories that are simplified representations of the “real world”. While it is not possible to illustrate real world issues...
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...Chapter 2 Objectives 1. Explain the importance of analyzing and understanding the firm’s external environment. It is important for a firm to analyze and understand their external environment, because the external environment can pose opportunities and threats. As the firm seeks to gain competitive advantage and above-average returns they are influenced by external environment. The firm needs to understand the segments (demographic, political, global, physical, etc.) with their environment in order to achieve their goal. As more firms enter the market and as technology changes and grow in affects a firm capability of having or maintain competitive advantage, so firms need to have full awareness of what is happening in the external environment. 2. Define and describe the general environment and the industry environment. The general environment could be considered as the outer layer that is widely dispersed and affects organizations indirectly. The general environment is a group of seven environmental segments (demographic, economic, political/legal, sociocultural, technological, global, and physical) which influence an industry and the firms within it. A firm does not directly control the general environment, but by all means firm’s actions are influence by the segments. The industry environment directly influences a firm and its competitive actions and response. A firm response and competitive actions may be influenced by these set of factors: the threat of new entrants...
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...GE’s Two-decade Transformation: Jack Welch’s Leadership « We Bring Good Things To Life ». This is how General Electric (GE) defined its activity, in general terms, between 1979 and 2003. During this period, and more precisely from 1981 to 2001, Jack Welch was the company’s CEO. This previous advertising slogan, designed by the advertising firm BBDO, largely contributed to GE corporate identity; indeed, according to Baer Performance Marketing, “When you hear the name General Electric, […] “We Bring Good Things to Life” is also brought to mind” (baerpm.com). Furthermore, it didn’t have for only purpose to promote the firm’s products and services, but it also emphasized their high quality, and as a result, it highlighted GE’s will to improve consumers’ lives. In other words, the slogan had more than communication purposes: it would lead the entire process of value creation; it summed GE’s strategy up. General Electric was created by a merge between two electricity-related companies – Edison General Electric Company and Thomson-Houston Electric Company, in 1892, from Thomas Edison and Charles Coffin initiative. Widely considered as one of the most successful corporations of the 20th century, recognized by Fortune to be the “Most Admired Company in the United States” and named Financial Times’ “Most Admired Company in the World” in 2001, the firm has dramatically grown from a merge between two electricity enterprises to an American multinational conglomerate corporation...
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...EXTERNAL ANALYSIS 1.0 Introduction 2.0 General Environment Analysis 3.1 Demographic Segment 3.2 Economic Segment 3.3 Political or Legal Segment 3.4 Socio-cultural Segment 3.5 Technological Segment 3.6 Global Segment 3.0 Industry Environment Analysis 4.7 Threat of New Entrants 4.8 Bargaining Power of Supplier 4.9 Bargaining Power of Buyers 4.10 Threat of Substitute Products 4.11 Intensity of rivalry among Competitors 4.0 Competitive Environment 5.0 Opportunities and Threats of Nestle INTERNAL ANALYSIS 6.0 Nestlé’s Resources, Tangible and Intangible 7.0 Capabilities of Nestle 8.0 Core Competencies Analysis 9.0 Value Chain Analysis of Nestle 10.12 Primary Activities 10.13.1 Inbound Logistics 10.13.2 Operations 10.13.3 Outbound Logistics 10.13.4 Marketing and Sales 10.13.5 Services 10.13 Support Activities 10.14.6 Procurement 10.14.7 Technological Development 10.14.8 Human Resources Management 10.14.9 Firm Infrastructure 10.0 Weaknesses 11.0 SWOT Analysis 12.14 Strengths 12.15 Weaknesses 12.16 Opportunities 12.17 Threats 12.0 Current Strategy 13.0 Future Strategy 14.0 Conclusion 15.0 References Executive Summary Table of Contents Executive Summary 1 EXTERNAL ANALYSIS 1 1.0 Introduction 1 2.0 General Environment...
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...Dollar General Analysis Ricky Rich MGT/521 10 Nov 2014 Dr. Bridges Dollar General Analysis Dollar General Corporation is a premier low-cost retailer organization in the United States. It is amongst the biggest retailers with over 11,500 stores that provide quality commodities made by American manufacturers. One of the Dollar General’s main objectives is to create an atmosphere that enables access to everyday items worry-free, rather it is a simple bar of soap or a box of detergent. This objective is achieved by offering a detailed variety of recognized labels at affordable prices in well-located and accessible locations (Dollar General Corporation, 2014). Multiple strategic and operational company goals were identified in the SWOT analysis. For this assignment, the discussion will be focused on providing customers a better life as a strategic goal and operating in an environmentally safe working atmosphereas an operational goal. Providing a better life for customers and excellent opportunities for employees A typical Dollar Generaloccupies close to 7,000 square feet of retail space and mainly provides service for patrons within a five mile radius of the store. The majority of the locations serve local areas with small residential populations below 20,000 (Hotstocked.com, 2014). Management knows that its preferred shoppers enjoy the luxury of a small, community store. The belief is also that Dollar General’s accessible money-saving store model will remain popular in...
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...Click to add text to title page ACCT3583 Management Accounting 2 ACCT3583: Seminar 1 Administration Seminar 1 – Analysing the External Environment Welcome to ACCT3583 – Management Accounting 2! We will begin with a course overview – referring to the ACCT3583 Course Outline Outline. This is an opportunity to discuss learning outcomes, assessments and general course admin., as well as providing a subject overview We will then cover Topic 1: Analysing the External Environment 2 ACCT3583 Management Accounting 2 ACCT3583 Teaching team Teaching Team Contact details Brian Burfitt (Lecturer‐in‐Charge) Yee Shih Phua ACCT3583 Teaching team Consultation Tues 10am – 12Noon Teaching Team Contact details Mark McCoy Consultation By Appointment Email: b.burfitt@unsw.edu.au Telephone: 9385 5807 Office: Quad 3081 Email: Y.Phua@unsw.edu.au Telephone: 9385 5812 T l h 9385 5812 Office: Quad 3062 Thurs 12Noon – 2 Th 12N 2pm Email: TBA Telephone: TBA Jonathan Yuen Email: jonathan.yuen@unsw.edu.au Telephone: 9385 6283 Office: Quad 3089 Mon 4pm ‐6pm Yichelle Zhang Email: yichelle.zhang@unsw.edu.au Telephone: 9385 6283 Office: Quad 3089 12Noon – 1pm 3 ACCT3583 Management Accounting 2 4 ACCT3583 Management Accounting 2 ACCT3583 Seminar overview ACCT3583 Course assessment Seminar overview Seminars comprise lecture content and in-class discussions You must view the podcast, read the assigned readings and...
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...viewed as the general environment. However, what really is General environment? The General Environment is the layer of the external factors or events that affects an Organization. This environment consists of the International, Technological, Sociocultural, Economic and legal-Political trends. The international Dimension is an aspect of the external environment that represents events originating in foreign countries, as well as opportunities for local companies in other countries. We live in a technological advances world. In that case, the technological dimension of the general environment allows the scientific and technological advancement in the industry and society at large. Following next in line is Sociocultural. It represents the demographic characteristics, norms, customs and values of the population within which the organization operates. Whereas, the Economic Dimension is refers to the overall economic health of the country or region in which the organization operates in the general environment. Lastly, there is the Legal-Political Dimension of the general environment that includes federal and local government regulations and political activities designed to influence company behavior. However, In the British Virgin Islands, the Government is undertaking major projects. One of such major projects includes the National Health Insurance (NHI). Although this project has its advantage, using the PESTIN Analysis, will help in measuring how these general environments may affect...
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...Business Environment Analysis Background Environmental analysis is a systematic process that starts from identification of environmental factors, assessing their nature and impact, auditing them to find their impact to the business, and making various profiles for positioning. A common process of environmental analysis or scanning is discussed in the following section. Environmental Analysis Process A business manager should be able to analyze the environment to grasp opportunities or face the threats. Organizations need to build strength and repair their weakness available in the business environment. Therefore, this process consists not only a single steps but a process of various steps. Environmental analysis comprises scanning, monitoring, analyzing, and forecasting the business situation. Scanning is to get the relevant information from the information overload. It is to focus on the most relevant information. Monitoring is to check the nature of the environmental factors. Analyzing requires data collection and use of different required tools and techniques. Forecasting is to find the future possibilities based on the past results and present scenario. Environmental analysis process is not static but a dynamic process. It may differ depending on the situation. However, a general process with few common steps can be identified as the process of environmental analysis these are a) Monitoring or identifying environmental factors, b) Scanning and selecting...
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...THE EXTERNAL ENVIRONMENT: OPPORTUNITIES, THREATS, INDUSTRY COMPETITION AND COMPETITOR ANALYSIS. “It is not the strongest species that survive, nor the most intelligent, but the one most responsive to change.” Charles Darwin Today, two types of strategies exist: proactive/reactive. Anticipation, change, adaptability is necessary nowadays so the proactive strategy (ex: Coca Cola). External environment conditions create both threats and opportunities for firms that have major implications for their strategic actions. Regardless of the industry, the external environment is critical to a firm’s survival success. The firm’s understanding of the external environment is matched with knowledge about its internal environment to form its vision, to develop its mission and to take actions that result in strategic competitiveness and above-average returns. Factors that can have an impact on business have to be taken in consideration. Companies sometimes have to have strategic scenario in case of an unexpected factors, which can affect the external environment: - The attacks of September 11, - The coalition invasion in Afghanistan in October 2001, - The outbreak of the Severe Acute Respiracy Syndrome (SARS) - The war in Iraq in 2003, - The Madrid (2004) and London (2005) bombings. I. The general, industry and competitor environments. The external environment Demographic Global Industry environment Threat of new entrant Power of suppliers Power of buyers Product substitutes Intensity...
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...BB309 – Strategic Management Tutorial Questions Chapter 2 – The External Environment TRUE or FALSE QUESTIONS The external environment facing business stays relatively constant over time. False Firms can directly control the elements of the seven segments of the general environment. True To successfully deal with today’s external environment and to achieve strategic competitiveness, firms must be aware and fully understand the different segments of that environment. True The industry environment directly influences the firm and its competitive actions and responses. (True or False) When firms analyze the external environment, they typically have complete and unambiguous data. (True or False) Scanning involves detecting meaning through early signals of environmental trends. (True or False) Early adopters of new technology often achieve higher market shares and higher returns than later adopters of the technology. (True or False) Compared with the general environment, the industry environment has a more indirect effect on the firm’s strategic competitiveness and ability to earn above-average returns. (True or False) The main competitive factor facing newspaper companies is the existence of substitute products and services. (True or False) The process of competitor analysis should examine the competitor’s future objectives, current strategy, assumptions, and capabilities. (True or False) ...
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...Chapter 2 The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis KNOWLEDGE OBJECTIVES 1. Explain the importance of analyzing and understanding the firm’s external environment. 2. Define and describe the general environment and the industry environment. 3. Discuss the four activities of the external environmental analysis process. 4. Name and describe the general environment’s six segments. 5. Identify the five competitive forces and explain how they determine an industry’s profit potential. 6. Define strategic groups and describe their influence on the firm. 7. Describe what firms need to know about their competitors and different methods (including ethical standards) used to collect intelligence about them. CHAPTER OUTLINE Opening Case Environmental Pressures on Wal-Mart THE GENERAL, INDUSTRY, AND COMPETITOR ENVIRONMENTS EXTERNAL ENVIRONMENTAL ANALYSIS Scanning Monitoring Forecasting Assessing SEGMENTS OF THE GENERAL ENVIRONMENT The Demographic Segment The Economic Segment The Political/Legal Segment The Sociocultural Segment The Technological Segment The Global Segment Strategic Focus Does Google Have the Market Power to Ignore External Pressures? INDUSTRY ENVIRONMENT ANALYSIS Threat of New Entrants Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitute Products Intensity of Rivalry among Competitors INTERPRETING INDUSTRY ANALYSES ...
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...------------------------------------------------- Chapter 2—The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis TRUE/FALSE 1. The health-related concerns in the general environment facing Philip Morris International are part of the physical segment. ANS: F PTS: 1 DIF: Medium REF: 36 OBJ: 02-01 TYPE: comprehension NOT: AACSB: Ethical & Legal understanding | Management: Ethical Responsibilities | Dierdorff & Rubin: Managing the task environment 2. The external environment facing business stays relatively constant over time. ANS: F PTS: 1 DIF: Easy REF: 34-35 OBJ: 02-01 TYPE: comprehension NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment 3. Demographic, economic, political/legal, sociocultural, technological, global, and physical are the seven elements comprising the industry environment. ANS: F PTS: 1 DIF: Hard REF: 38 (Table 2.1) OBJ: 02-02 TYPE: knowledge NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment 4. Firms can directly control the elements of the seven segments of the general environment. ANS: F PTS: 1 DIF: Easy REF: 37 OBJ: 02-01 TYPE: comprehension NOT: AACSB: Business Knowledge...
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...CHAPTER 3: THE MACRO ENVIRONMENT MGMT 488 – STRATEGY AND POLICY OVERVIEW The macro environmental analysis is the first step in creating the Environmental Analysis. The macro environment examines the general business climate as it relates to the organization, but has nothing to do with the organization itself. The macro environment is primarily concerned with major issues and upcoming changes in the environment. The acronym for the macro analysis is “STEEP.” The five areas of interest are Socio-cultural and demographics; Technology; Economic conditions; Ecology and physical environment; and Political and legal. SOCIO-CULTURAL AND DEMOGRAPHICS Societal values and lifestyles change over time, and the most important of these should be discussed. For example, over the past generation, it has become acceptable for women to work outside the home – or not; smoking is not as acceptable as it once was; people are not retiring at 65; students going to college are older; and people are more aware of the environment and healthful living styles. The changes in values and lifestyles may come from many sources: medical (smoking, healthy eating, exercise); science (global warming, going “green”); economic (people working longer, women in the workforce); cultural diversity (music preferences, foods, living accommodations, medicine); and technologies (Internet dating, biodegradable plastic) are just a FEW examples. Some changes in values and lifestyles will be important to the industry...
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