P 3 Business analysisenvironmental models<br />Revision Class<br />
Rational model<br />Action<br />Strategic Control<br />Position Audit<br />Mission<br />Corporate Appraisal<br />Strategic...
Strategy lenses<br />A way to understand an organization’s strategy<br />As design: logical process, forces and constraint...
pestel<br />Shows macro-environmental influences that might affect organization<br />Political: government stability, taxa...
pestel<br />Technological: govt spending on research, govt and industry focus on technological effort, new discoveries & d...
5 forces<br />This framework helps identify the sources of competition in an industry or sector:<br />Forces strong – prof...
5 forces<br />THREAT OF SUBSTITUTES: e-mail substitutes postal service, travel substitutes, product substitutes eye glasse...
Porter’s diamond<br />Competitive environment will differ between countries.<br />Some nations are more competitive than o...
Porter’s diamond<br />Factor conditions: human resources, physical resources, knowledge, capital, infrastructure.<br />Hom...
Porter’s diamond<br />Firm strategy, industry and rivalry: bases of advantage. Germany: systematic, hierarchical processes...
Scenario planning<br />Scenarios are detailed and plausible views of how the business environment of an organization might...
Scenario planning<br />Approach to understand the future impact of the environment<br />10 years, 20 years or even more<br...
Scenario planning<br />Key drivers for change:<br />Market globalization: similar needs, global customers, transferable ma...
Cycle of competition<br />Incumbent<br />Entrant<br />Builds Barriers<br />Attacks soft market segments<br />No response<b...
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Environmental Models

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Environmental Models

  1. 1. P 3 Business analysisenvironmental models<br />Revision Class<br />
  2. 2. Rational model<br />Action<br />Strategic Control<br />Position Audit<br />Mission<br />Corporate Appraisal<br />Strategic Options<br />Choices<br />Implementation<br />Environment Analysis<br />Position<br />Choice<br />
  3. 3. Strategy lenses<br />A way to understand an organization’s strategy<br />As design: logical process, forces and constraints weighed carefully, analytic and evaluative techniques to establish clear strategic direction. Implementation of planned action.<br />As experience: adaptation of past strategies, what has gone before.<br />As ideas: innovation, variety and diversity for generating new ideas.<br />Example: Jaguar, BMW, Mercedes convertible<br />
  4. 4. pestel<br />Shows macro-environmental influences that might affect organization<br />Political: government stability, taxation policy, foreign trade regulations, social welfare policies<br />Economic: business cycles, GNP trends, interest rates, money supply, inflation, unemployment, disposable income.<br />Socio-cultural: population demographics, income distribution, social mobility, lifestyle changes, attitudes to work and leisure, consumerism, levels of education.<br />
  5. 5. pestel<br />Technological: govt spending on research, govt and industry focus on technological effort, new discoveries & developments, speed of technology transfer, rates of obsolescence.<br />Environmental: EPLs, waste disposal, energy consumption<br />Legal: competition law, employment law, health and safety, product safety<br />
  6. 6. 5 forces<br />This framework helps identify the sources of competition in an industry or sector:<br />Forces strong – profits are weak<br />Forces weak – profits are strong<br />THREAT OF ENTRY: economies of scale, capital requirement, access to supply or distribution channels, customer or supplier loyalty, experience, expected retaliation, legislation or government action, differentiation<br />
  7. 7. 5 forces<br />THREAT OF SUBSTITUTES: e-mail substitutes postal service, travel substitutes, product substitutes eye glasses, lenses, laser treatment, herbal medicine, medicine free way of life.<br />POWER OF BUYER OR SUPPLIER: (buyer power) volume purchase, cost of switching, threat of acquiring the supplier (supplier power) few suppliers, switching cost high, competing directly with buyers<br />RIVALRY: competitors: offer similar products to similar markets, more competition less profit, low growth affects profits, price wars, low differentiation.<br />
  8. 8. Porter’s diamond<br />Competitive environment will differ between countries.<br />Some nations are more competitive than others.<br />The determinants of national advantage:<br />Firm Strategy, structure, rivalry<br />Demand Conditions<br />Factor Conditions<br />Related & Support Industries<br />
  9. 9. Porter’s diamond<br />Factor conditions: human resources, physical resources, knowledge, capital, infrastructure.<br />Home demand conditions: Japanese customers high expectations of electronic equipment provided impetus for those industries in Japan.<br />Related and Support Industries: one successful industry may lead to advantage in related and support industry. Italy: leather foot wear, leather machinery, design services. Singapore, port services, ship repair services. Pakistan, textiles, cotton, ginning, weaving.<br />
  10. 10. Porter’s diamond<br />Firm strategy, industry and rivalry: bases of advantage. Germany: systematic, hierarchical processes, contributed to reliability and technical excellence in engineering industries. Domestic rivalry: Pharmaceutical industries in Switzerland.<br />
  11. 11. Scenario planning<br />Scenarios are detailed and plausible views of how the business environment of an organization might develop in the future based on groupings of key environmental influences and drivers of change about which there is a high level of uncertainty.<br />When environment has high level of uncertainty due to complexity or rapid change<br />
  12. 12. Scenario planning<br />Approach to understand the future impact of the environment<br />10 years, 20 years or even more<br />Predicting plausible futures<br />Improves organizational learning<br />How environment unfolds and influences strategies<br />
  13. 13. Scenario planning<br />Key drivers for change:<br />Market globalization: similar needs, global customers, transferable marketing<br />Cost globalization: scale economies, sourcing efficiencies, country specific costs, high product development costs<br />Globalization of competition: interdependence, competitors global, high exports/imports<br />Globalization of govt policies: trade policies, technical standards, host government policies<br />
  14. 14. Cycle of competition<br />Incumbent<br />Entrant<br />Builds Barriers<br />Attacks soft market segments<br />No response<br />Widens attack to adjacent segments<br />Reinforces barriers<br />Starts price wars<br />Attacks entrant’s home market<br />Restart the cycle in adjacent market<br />

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