2. Overview
• Review of lecture 2
• Environmental scanning – why?
• SWOT analysis
• PESTEL analysis
• LoNGPEST analysis
• Scenario Planning
• When it all goes wrong ….
2
3. Learning outcomes
of this Seminar
• To be able to carry out a SWOT analysis of a live
case
• To be able to use a SWOT and PESTLE analysis in
an approach to strategic decision making
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4. Why do organisations scan their environments?
• To be able to compete effectively
• To be able to make better informed decisions
• To understand where to strengthen the business
• To be aware of the dynamic and changing nature of the environment they work in
• To inform their overall long term and strategic planning approach
• To highlight potential threats and opportunities within a timescale that enables
effective action to be taken
• Sometimes they get it wrong, as we see in the cases of Kodak, Nokia and others
5. SWOT analysis
• Stands for:
• Can be used to analyse a business, or a business unit, or a product or service
• You can even do a SWOT analysis on yourself!
• A well constructed SWOT analysis can provide some clear insights into the business
and inform what areas need to be strengthened either to mitigate against
potential threats or take advantage of potential opportunities
USUALLY INTERNAL ISSUES USUALLY EXTERNAL ISSUES
7. Carrying out a SWOT analysis
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
What are your strengths?
What do you do better than others?
What unique capabilities and
resources do you possess?
What do others perceive as your
strengths?
What are your weaknesses?
What do your competitors do better
than you?
What could you improve given the
current situation?
What do others perceive as your
weaknesses?
What trends or conditions may
positively impact you?
What opportunities are available to
you?
What trends or conditions may
negatively impact you?
What are your competitors doing
that may impact you?
Do you have solid financial support?
What impact do your weaknesses
have on your threats?
INTERNALEXTERNAL
9. Case study two
• Group 1 – carry out a SWOT analysis on Foyles Bookshops
• Group 2 – carry out a PESTLE analysis on the British Bookselling Industry
10. The PESTEL analysis
Local or national governmental issues
Alliances and agreements between
countries
Changes in government and
approaches to business
Changes in regulation
Changes in employment law
Spending
Economic growth
Exchange rates
Employment statistics
Taxation changes
Health conscious society
Age demographics
Lifestyle changes
Fashion changes
Multi-culturalism
Religious changes
Information and Communications
technology
New Machinery
Changes in energy
Social networks
Green issues
Corporate Social responsibility
Attitudes towards charity
Attitudes towards waste
New laws, repeals of old laws
Regulation again
Licensing
Driving laws
Tendency to be more litigious
11. Another way of looking at it
Political Economic Socio-
cultural
Technological
Local Local authorities
and associations
Local economy Local
community
affairs
Difficult to
segregate but rise
in new
communications
Technology, social
networks etc
National National
government and
employer
bodies
Central
monetary and
fiscal policies
Stock market
Demographic
change,
immigration,
culture
Global Alliances and
agreements or
disagreements
Trading blocs
World money
markets
Global demo-
graphics,
cross cultural
issues,
religious
issues
12. To conclude
• Two groups
• You are the Board of Foyles – based on the information you now have from the
two pieces of environmental scanning, what decisions do you think you now need
to make about the strategic direction of the business?
13. Bringing it all together
• We have now looked in detail at two key methods of scanning the environment
that business use extensively
• You have either completed two SWOT analyses or one SWOT and one STEEP
analysis. You have also seen how these tools can be used to scan the internal and
external environment of a business
