Strategic Management
External and Internal
Assessments

1

External Strategic
Assessment
“It is not the strongest of the species that

survive, nor the most intelligent, but the one most responsive to change.”
– Charles Darwin
“Nothing focuses the mind better than the

constant sight of a competitor who wants to wipe you off the map.”
– Wayne Calloway, Former CEO, PepsiCo
2

1

External Audit – Sources of
Information
•Internet
•Libraries
•Suppliers
•Distributors
•Salespersons
•Customers
•Competition
3

External Strategic
Management Audit
- The macro environment Scanning
(PESTEL analyses, Scenarios)
- Industry or Sector Analysis (5 forces, industry/product life cycle)
- Competitors scanning (Strategic Group
Map, CPM)
- The Organization responses (EFEM)
4

2

Layers of the business environment

5

Key Aspects of PESTEL
Analysis

• Not just a list of influences
• Need to understand key drivers of change • Drivers of change have differential impact on industries, markets, and organisations • Focus is on future impact of environmental factors
• Combined effect of some of the factors likely to be most important

6

3

Macroenvironment – PESTEL (1)

7

Microenvironment – PEST(EL)
Political

Economic

• Government stability (+)
• Taxation policy (+)
• Foreign trade regulations (+)
• Social welfare policies
(-)

• Business cycles
(-)
• GNP trends (-)
• Interest rates (--)
• Inflation (+)
• Unemployment (-)

8

4

Microenvironment – PEST(EL)
Socio-cultural

Technological

• Population demographics (-)
• Income distribution (+)
• Social mobility (-)
• Lifestyle changes (+)
• Attitudes to work and leisure (+)
• Consumerism (+)
• Levels of education (-)

• Government spending on research (-)
• Government and industry focus on technological effort
(-)
• New