The document discusses various dimensions of environmental analysis including technology, government, economics, culture, and demographics. It then covers dealing with strategic uncertainties through impact analysis and scenario analysis. Scenario analysis involves identifying scenarios, relating scenarios to existing strategies, and estimating scenario probabilities. Impact analysis assesses the impact and immediacy of strategic uncertainties to determine which require further monitoring and analysis.

1. Hernandez, Babylyn
Chrejine Mandingiado
Mechille Matining

2.  Dimension of environmental analysis
Technology
Government
Economics
Culture
Demographics
 Dealing with strategic uncertainties
 Impact analysis—assessing the impact of
strategic uncertainties
Impact of a Strategic Uncertainties
Immediacy of Strategic Uncertainties
Managing Strategic Uncertainties
 Scenario analysis
Identify Scenario
Relate Scenarios to strategies
Estimate Scenario Probabilities

3. DIMENSIONS OF ENVIRONMENTAL ANALYSIS
Technologies
One dimension of environmental analysis
is technological trends or technological
events occurring outside the market of
industry that have the potential to
impact strategies.

4. DIMENSIONS OF ENVIRONMENTAL ANALYSIS
Government
The addition and removal of
legislative or regulatory constrains
can pose major strategic threats
and opportunities.

5. DIMENSIONS OF ENVIRONMENTAL ANALYSIS
Economics
The evaluation of some strategies will
be affected by judgement made
about the economy, particularly
about inflation and general
economic health as measured by
unemployed and economic growth.

6. DIMENSIONS OF ENVIRONMENTAL ANALYSIS
Culture
Cultural trends can present both
threats and opportunities for a
wide variety of firms

7. DIMENSIONS OF ENVIRONMENTAL ANALYSIS
Culture
Cocooning
Fantasy Adventure
Small Indulgencies
Down-aging
Being alive
99 lives

8. DIMENSIONS OF ENVIRONMENTAL ANALYSIS
Demographics
Demographic trends can be a powerful
underlying force in a market and it can
be predictable.

9. DEALING WITH THE STRATEGIC UNCERTAINTY
Strategic uncertainty - uncertainty that has
strategic implications, is a key construct in
external analysis.
Scenario analysis basically accepts the
uncertainty as given and uses it to drive a
description of two or more future scenarios.

10. DEALING WITH THE STRATEGIC UNCERTAINTY
Information gathering and additional
analysis will not be able to reduce the
uncertainty.
Scenario analysis basically accepts the
uncertainty as given and uses it to drive a
description of two or more future scenarios.

11. DEALING WITH THE STRATEGIC UNCERTAINTY
Scenario Analysis
Identify
Scenarios
Relate Scenarios
to Existing or
Proposed Strategies
Estimate
Scenario
Probabilities

12. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
»An important objective of external analysis
is to rank the strategic uncertainties and
decide how they are to be managed over
time.
»The problem is the dozens of strategic
uncertainties and many second-level
strategic uncertainties are often generated.

13. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
»These strategic uncertainties can lead to
an endless process of information gathering
and analysis that can absorb resources
indefinitely.
»distinct priorities are established, external
analysis can become descriptive, ill-focused
and inefficient.

14. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
The extent to which a strategic uncertainty
should be monitored and analyzed depends on
its impact and immediacy.
1. The impact of strategic
uncertainty is related to:
The extent to which it
involves trends or events
The importance of the
involved businesses
The number of involved
businesses

15. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
2. The immediacy of a strategic
uncertainties is related to:
The probability that the
involved trends or events will
occur
The time frame of the trends
or events
The reaction time

16. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
IMPACT OF STRATEGIC
UNCERTAINT
Each strategy uncertainty involves potential
trends or events that could have an impact on
present, proposed, and even potential businesses.
The impact of strategic uncertainty will depend
on the importance of the impacted businesses to
a firm.

17. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
IMPACT OF STRATEGIC
UNCERTAINT
Some business is more important
than others.
Such measures might need to be
supplemented for proposed or
growth businesses for which
present sales, profits or costs may
not reflect the true value to a firm.

18. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
IMMEDIACY OF STRATEGIC
UNCERTAINTY
Events or trends associated with strategic
uncertainties may have a high impact but such a low
probability of occurrence that it is not worth actively
expending resources to gather or analyze
information.
The harnessing of tide energy may be unlikely or
may occur so far in the future that it is of no concern
to the utility.

19. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
IMMEDIACY OF STRATEGIC
UNCERTAINTY
There is the reaction time
available to a firm
After a trend or event crystallizes
If the available reaction time is
inadequate, it becomes important
to anticipate emerging trends and
events better.

20. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
MANAGING STRATEGIC
UNCERTANTIES
Suggests a categorization of strategic uncertainties
for a given business. If both the immediacy and
impact are low
If the impact is thought to be low but the
immediacy is high.
If the immediacy is low and the impact is high

21. IMPACT ANALYSIS—ASSESSING THE IMPACT OF
STRATEGIC UNCERTAINTIES
MANAGING STRATEGIC
UNCERTANTIES
And contingent strategies may be consider but not
necessarily developed and implemented.
When both the immediacy and potential impact
underlying trends and events are high
An active task force may provide initiative.

22. Immediacy
High Low High
Impact
Low

23. SCENARIO ANALYSIS
It is a vehicle to explore different
assumptions about the future,
involves the creation of two to
three plansible scenarios, the
development of strategies
appropriate to each, the
assessment of scenario
probabilities, and the evaluation of
the resulting strategies across the
scenarios.

24. Immediacy
High Low High
Impact
Low

25. SCENARIO ANALYSIS
Two Types Of Scenario Analysis
Strategy- Developing Scenarios- is to provide insights into
future competitive context then use these insights to evaluate
existing business strategies and stimulated the creation of new
ones.
Decision-Driven Scenarios- is proposed and tested against
several scenarios that are developed. The goal is to challenge
the strategies, thereby helping to make the go/no-go
decision and suggesting ways to make the strategy more
robust in withstanding competitive forces.

26. SCENARIO ANALYSIS
RELATE
SCENARIOS TO ESTIMATE
IDENTIFY EXISTING OR SCENARIO
SCENARIOS PROPOSED PROBABILITIES
STRATEGIES

27. SCENARIO ANALYSIS
Identifying Scenarios
The impact analysis will identify the strategic uncertainty
with the highest priority for a firm. A competitor scenario
analysis can be driven by the uncertainty surrounding a
competitor’s strategy. An inflation stimulated recession
scenario would be expected to generate a host of
conditions for the appliance industry, such as price
increases and retail failures.

28. SCENARIO ANALYSIS
Relate Scenarios to
Strategies
The next step is to relate them to strategy and to
know what new options or strategies will be
applicable to the scenarios. Even if the scenario
analysis is not motivated by a desire to generate
new strategy options, it is always useful to consider
what strategies would be optimal for each
scenario.

29. SCENARIO ANALYSIS
Estimate Scenario
Probabilities
To evaluate alternatives strategies it is useful to
determine the scenario probabilities. The task is
actually one of environmental forecasting, except
that the total scenario may be a rich combination
of several variables.