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Strategic Management Chapter 1
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Strategic Management Chapter 1 Presentation Transcript

  • 1. “Strategic Management”
  • 2. CHAPTER 1 BUSINESS ENVIRONMENT TERMS OF PROFIT. OBJECTIVES OF A BUSINESS SURVIVAL STABILITY GROWTH EFFICIENCY PROFITABILITY occupation or profession purchase, sale, manufacture, processing, and/or marketing of products and/or services. BUSINESS Peter F Drucker MANAGED BY PEOPLE
  • 3. ENVIRONMENTAL INFLUENCES ON BUSINESS INPUTS Human Physical Finance Technology PROCESSING Transformation of inputs to outputs OUTPUTS Product/ Services ENVIRONMENTAL FORCES PROBLEMS DIFFERENT INFLUENCES UNCERTAINTY COMPLEXITY
  • 4. WHY ENVIRONMENTAL ANALYSIS? BASIC GOALS UNDERSTANDING CHANGES PROVIDE INPUTS FOR STRATEGIC DECISION MAKING FACILITATE AND FOSTER STRATEGIC THINKING CHARACTERISTICS OF BUSINESS ENVIRONMENT COMPLEX DYNAMIC MULTI-FACETED FAR REACHING IMPACT
  • 5. COMPONENTS OF BUSINESS ENVIRONMENT
  • 6. RELATIONSHIP BETWEEN ORGANISATION AND ITS ENVIRONMENT EXCHANGE OF INFORMATION EXCHANGE OF RESOURCES EXCHANGE OF INFLUENCE AND POWER ENVIRONMENTAL SCANNING organizations monitor identify opportunities and threats taking strategic decisions INFORMATION Gathering Analysing Forecasting
  • 7. MICRO ENVIRONMENT Consumer/Customer Competitors Organization Market Suppliers Intermediaries
  • 8. MACRO ENVIRONMENT Demographic Economic Government Legal Political Cultural Technological Global
  • 9. THE PESTLE MATRIX POLITICAL • Political stability • Political principles and ideologies • Current and future taxation policy • Regulatory bodies and processes • Government policies • Government term and change • Thrust areas of political leaders ECONOMIC • Economy situation & trends • Market and trade cycles • Specific industry factors • Customer/end-user drivers • Interest and exchange rates • Inflation and unemployment • Strength of consumer spending
  • 10. SOCIAL • Lifestyle trends • Demographics • Consumer attitudes and opinions • Brand, company, technology image • Consumer buying patterns • Ethnic/religious factors • Media views and perception TECHNOLOGICAL • Replacement technology/ solutions • Maturity of technology • Manufacturing maturity and capacity • Innovation potential • Technology access, licensing, patents • Intellectual property rights and copyrights THE PESTLE MATRIX
  • 11. THE PESTLE MATRIX LEGAL • Business and Corporate Laws • Employment Law • Competition Law • Health & Safety Law • International Treaty and Law • Regional Legislation ENVIRONMENTAL • Ecological/environmental issues • Environmental hazards • Environmental legislation • Energy consumption • Waste disposal
  • 12. STRATEGIC RESPONSES TO THE ENVIRONMENT LEAST RESISTANCE PROCEED WITH CAUTION DYNAMIC RESPONSE
  • 13. COMPETITIVE ENVIRONMENT • Who are the competitors? • What are their product and services? • What are their market shares? • What are their financial positions? • What gives them cost and price advantage? • What are they likely to do next? • Who are the potential competitors?