The External Environment: Opportunities, Threats, and Competitor Analysis

Strategy Implementation Strategic Entrepreneurship Organizational Structure and Controls Corporate Governance Strategic Leadership Strategy Formulation Strategic Competitiveness Above-Average Returns Strategic Intent Strategic Mission The External Environment The Internal Environment The Strategic Management Process Feedback Strategic Inputs Strategic Actions Strategic Outcomes Corporate- Level Strategy Cooperative Strategy Competitive Rivalry and Competitive Dynamics International Strategy Business-Level Strategy Acquisition and Restructuring Strategies

The External Environment General Environment General Environment General Environment Industry Environment Threat of new entrants Power of suppliers Power of buyers Product substitutes Intensity of rivalry Competitor Environment Socio cultural Global Technological Political/Legal Demographic Economic

External Environmental Analysis A 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

A 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 Analysis Strategic Intent Strategic Mission The External Environment Analysis of general environment Analysis of industry environment Analysis of competitor environment The External Environment

General Environment Socio Cultural segment Society’s Attitudes and Cultural Values Workforce Mix Quality of Life Women in the workplace Workforce diversity Attitudes about quality of worklife Concerns about environment Shifts in work and career preferences Shifts in product and service preferences

Socio Cultural segment

Society’s Attitudes and Cultural Values

Workforce Mix

Quality of Life

Women in the workplace

Workforce diversity

Attitudes about quality of worklife

Concerns about environment

Shifts in work and career preferences

Shifts in product and service preferences

General Environment Economic segment Inflation rates Interest rates Trade deficits or surpluses Budget deficits or surpluses Personal savings rate Business savings rates Gross domestic product

Economic segment

Inflation rates

Interest rates

Trade deficits or surpluses

Budget deficits or surpluses

Personal savings rate

Business savings rates

Gross domestic product

General Environment Political/Legal Segment Taxation laws Deregulation philosophies Labor laws

Political/Legal Segment

Taxation laws

Deregulation philosophies

Labor laws

General Environment Technological Segment Product innovations Applications of knowledge Focus of private and government-supported R&D expenditures New communication technologies

Technological Segment

Product innovations

Applications of knowledge

Focus of private and government-supported R&D expenditures

New communication technologies

General Environment Global Segment Important political events Critical global markets Newly industrialize countries Different cultural and institutional attributes

Global Segment

Important political events

Critical global markets

Newly industrialize countries

Different cultural and institutional attributes

General Environment Demographic Segment Population size Age structure Geographic distribution Ethnic mix Income distribution

Demographic Segment

Population size

Age structure

Geographic distribution

Ethnic mix

Income distribution

Competitor Environment Competitor intelligence is the ethical gathering of needed information and data about competitors’ objectives, strategies, assumptions, and capabilities what drives the competitor as shown by its future objectives what the competitor is doing and can do as revealed by its current strategy What the competitor believes about itself and the industry, as shown by its assumptions What the the competitor may be able to do, as shown by its capabilities

Competitor intelligence is the ethical gathering of needed information and data about competitors’ objectives, strategies, assumptions, and capabilities

what drives the competitor as shown by its future objectives

what the competitor is doing and can do as revealed by its current strategy

What the competitor believes about itself and the industry, as shown by its assumptions

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

Competitor Analysis Future 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? Future objectives

Future 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?

Competitor Analysis Current Strategy: How are we currently competing? Does this strategy support changes in the competitive structure? Current strategy Future objectives

Current Strategy:

How are we currently competing?

Does this strategy support changes in the competitive structure?

Competitor Analysis Assumptions: 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? Assumptions Current strategy Future objectives

Assumptions:

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?

Competitor Analysis Capabilities: What are our strengths and weaknesses? How do we rate compared to our competitors? Capabilities Assumptions Current strategy Future objectives

Capabilities:

What are our strengths and weaknesses?

How do we rate compared to our competitors?

Competitor Analysis 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? Capabilities Assumptions Current strategy Future objectives 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?