Environment analysis

The External Environment: Opportunities, The External Environment: Opportunities, Threats, and Competitor AnalysisThreats, and Competitor Analysis

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Strategy ImplementationStrategy Implementation

StrategicStrategicEntrepreneurshipEntrepreneurship

OrganizationalOrganizationalStructure and Structure and

ControlsControls

CorporateCorporateGovernanceGovernance

StrategicStrategicLeadershipLeadership

Strategy FormulationStrategy Formulation

StrategicStrategicCompetitivenessCompetitivenessAbove-AverageAbove-Average

ReturnsReturns

Strategic IntentStrategic IntentStrategic MissionStrategic Mission

The ExternalThe ExternalEnvironmentEnvironment

The InternalThe InternalEnvironmentEnvironment

The Strategic The Strategic Management Management ProcessProcess

FeedbackFeedback

Str

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Str

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Str

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Str

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Str

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Corporate-Corporate-Level StrategyLevel Strategy

CooperativeCooperativeStrategyStrategy

Competitive RivalryCompetitive Rivalryand Competitiveand Competitive

Dynamics Dynamics

InternationalInternationalStrategyStrategy

Business-LevelBusiness-LevelStrategyStrategy

Acquisition andAcquisition andRestructuringRestructuring

StrategiesStrategies

General

Env

iron

men

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General

Environment

Gen

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Environm

ent

Socio culturalSocio cultural

Global

Global

TechnologicalTechnologicalPo

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Polit

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Dem

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Dem

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conomic

Econom

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The External EnvironmentThe External Environment

IndustryIndustryEnvironmentEnvironment

Threat of new entrantsThreat of new entrantsPower of suppliersPower of suppliersPower of buyersPower of buyers

Product substitutesProduct substitutesIntensity of rivalryIntensity of rivalry

CompetitorCompetitorEnvironmentEnvironment

External Environmental AnalysisExternal Environmental Analysis

A continuous process which includesA continuous process which includes Scanning: Identifying early signals of environmental

changes and trends Monitoring: Detecting meaning through ongoing

observations of environmental changes and trends Forecasting: Developing projections of anticipated

outcomes based on monitored changes and trends Assessing: Determining the timing and importance

of environmental changes and trends for firms’ strategies and their management

External Environmental AnalysisExternal Environmental Analysis

Strategic IntentStrategic IntentStrategic MissionStrategic Mission


Analysis of general environmentAnalysis of general environment

Analysis of industry environmentAnalysis of industry environment

Analysis of competitor environmentAnalysis of competitor environment


General EnvironmentGeneral EnvironmentSocio Cultural segmentSocio Cultural segment

• Society’s Attitudes and Cultural Values • Workforce Mix• Quality of Life• Women in the workplaceWomen in the workplace• Workforce diversityWorkforce diversity• Attitudes about quality of worklifeAttitudes about quality of worklife• Concerns about environmentConcerns about environment• Shifts in work and career preferencesShifts in work and career preferences• Shifts in product and service preferencesShifts in product and service preferences

Economic segmentEconomic segment

General EnvironmentGeneral Environment

Inflation ratesInflation rates Interest ratesInterest rates Trade deficits or surplusesTrade deficits or surpluses Budget deficits or surplusesBudget deficits or surpluses Personal savings ratePersonal savings rate Business savings ratesBusiness savings rates Gross domestic productGross domestic product


Political/Legal SegmentPolitical/Legal Segment Taxation lawsTaxation laws Deregulation philosophiesDeregulation philosophies Labor lawsLabor laws


Technological SegmentTechnological Segment

Product innovationsProduct innovations Applications of knowledgeApplications of knowledge Focus of private and government-supported Focus of private and government-supported

R&D expendituresR&D expenditures New communication technologiesNew communication technologies


Global SegmentGlobal Segment Important political eventsImportant political events Critical global marketsCritical global markets Newly industrialize countriesNewly industrialize countries Different cultural and institutional attributesDifferent cultural and institutional attributes


Demographic SegmentDemographic Segment Population sizePopulation size Age structureAge structure Geographic Geographic

distributiondistribution Ethnic mixEthnic mix Income distributionIncome distribution

Competitor EnvironmentCompetitor EnvironmentCompetitor intelligenceCompetitor intelligence is the ethical is the ethical gathering of needed information and data gathering of needed information and data about competitors’ objectives, strategies, about competitors’ objectives, strategies, assumptions, and capabilitiesassumptions, and capabilities what drives the competitor as shown by its what drives the competitor as shown by its future future

objectivesobjectives what the competitor is doing and can do as what the competitor is doing and can do as

revealed by its revealed by its current strategycurrent strategy What the competitor believes about itself and the What the competitor believes about itself and the

industry, as shown by its industry, as shown by its assumptionsassumptions What the the competitor may be able to do, as What the the competitor may be able to do, as

shown by its shown by its capabilitiescapabilities

Competitor AnalysisCompetitor Analysis

Future Objectives:Future objectivesFuture objectives How do our goals compare

with our competitors’ goals?

Where will the emphasis be placed in the future?

What is the attitude toward risk?


Current strategyCurrent strategy

Current Strategy:Future objectivesFuture objectives

How are we currently competing?

Does this strategy support changes in the competitive structure?


AssumptionsAssumptions


Future objectivesFuture objectivesAssumptions: Do we assume the future

will be volatile? Are we operating under a

status quo? What assumptions do our

competitors hold about the industry and themselves?


CapabilitiesCapabilities



Future objectivesFuture objectivesCapabilities: What are our strengths

and weaknesses? How do we rate compared

to our competitors?


CapabilitiesCapabilities



Future objectivesFuture objectives ResponseResponse

Response: What will our competitors

do in the future? Where do we hold an

advantage over our competitors?

How will this change our relationship with our competitors?

Environment analysis

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