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What you will learn in this section :
        •   Envisioning Strategy
               – Definition
               – Framew...
Understanding Strategic Management is
         like pealing an onion
Analyzing the External Environment:
                       PEST Analysis                                                  ...
PEST Analysis using the Internet
http://delicious.com/smehro/mbam619+PEST+Politics%20
PEST Politics
http://www.nytimes.com...
PEST Analysis: Example
Federal Deficit as % of GDP
Example of fiscal policy :
Visualizing federal budget
Example of fiscal policy:
National Debt: 1940 to present
Who is funding our debt?
Citigroup's role in CDOs and the financial crisis
Auto worker wages



http://www.nytimes.com/imagepages/2008/12/10/business/20081210_LEONHARDT_GRAPHIC.html
Economy at a glance

                                                          Economic Indicators

Real Economic Grow th
...
World map:Population
New technologies are being adopted faster today
Change Will Be Relentless:
                              Wireless industry example

                        Micro Fuel Cel...
Gartner Predicts: Hot Spots Explode …

                                     75,000,000 Users
                             ...
How the Web has grown and evolved
Two Key Forces Driving Business Change

      Faster Economic Pace         Impatient Customers

                          ...
Culture: Innovation in art




                             20
21
Analyzing the External Environment:
                       PEST Analysis                                                  ...
Political Change Impact



Fiscal Policy
Monetary Policy
Tax laws
Intellectual Property
protection
Copyright laws
Securiti...
“Economy” Change Impact



GDP
GDP growth
Exchange rate
Unemployment rate
Skilled labor
Education levels
Trade unions
Infr...
It is crucial to describe the subject for

                                            PEST Impact Matrix
the PEST analysi...
PEST Impact example:

                                Impact of   Opportunities   Threats
                                ...
PEST Analysis Example:
                                                                                     ic
           ...
PEST Impact example:

                                Impact of   Opportunities   Threats
                                ...
PEST Impact example:
                       Demographics




                                      © Sunil Mehrotra
PEST Impact example:




                       © Sunil Mehrotra
Student Examples: Pest Analysis

Breanne Hayes
April 2008 MBA
Graziadio School of Business and Management
Pepperdine Unive...
PEST example:

                                     Impact of     Opportunities      Threats
                             ...
PEST Impact example:

                                      Impact of     Opportunities      Threats
                     ...
Contemplating the Future
Scenario Planning




http://strategicframing.com/strategic-planning-workshop/
Nappies 1-6?

 What is visual thinking?

 What is Strategic Management?
 -strategic planning framework

What is the role o...
Mnemonic 2
Identifying Opportunities And Threats
Identifying Opportunities And Threats
Identifying Opportunities And Threats
Identifying Opportunities And Threats
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Identifying Opportunities And Threats

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Identifying Opportunities And Threats

  1. 1. What you will learn in this section : • Envisioning Strategy – Definition – Framework – Visual Models • External Analysis – PEST – PEST Impact Analysis • Industry and Competitive Analysis – Industry Structure – Evolution of Industries – Industry Supply Chain – Potential Industry Earnings – Porter’s 5 Forces Analysis – Competitive Intensity – Strategies for minimizing competitive forces – Perceptual Map – Barriers to Entry/Incumbency advantages – DSIR effect • Company Resources and Capabilities – ARC Analysis/HR – SWOT Analysis – Value Creating Processes/Core Competencies – Strategic Gameboard – Balanced Scorecard – Change Management © Sunil Mehrotra
  2. 2. Understanding Strategic Management is like pealing an onion
  3. 3. Analyzing the External Environment: PEST Analysis GDP GDP growth External Exchange rate Fiscal Policy Monetary Policy Environment Unemployment rate Skilled labor Tax laws ic Education levels Intellectual Property protection Poli om Trade unions Copyright laws tica l on nge Ec h a Infrastructure Securities Laws Cha Business climate ng e C Healthcare costs Raw materials Opportunities Opportunities New technologies l Threats Threats Materials technologies g ic a So Demographics Process technologies n o l o ge c Ch ial Income Distribution Information technologies Communication technologies e ch han ang Social stability T C e Ethnic patterns Government incentives Consumerism Energy costs Discretionary income Broadband penetration Fashions/fads Technology incubation Consumer trends © Sunil Mehrotra
  4. 4. PEST Analysis using the Internet http://delicious.com/smehro/mbam619+PEST+Politics%20 PEST Politics http://www.nytimes.com/interactive/2008/10/18/business/20081019-metrics-graphic.html Can Presidents tame business cycles http://harvardbusiness.org/flatmm/hbextras/200805/recessions/ HBR Interactive graphics on recessions http://delicious.com/smehro/mbam619+PEST+economy%20 PEST Economy http://www.fedstats.gov/?cm_sp=ExternalLink-_-Federal-_-DOC Fed Stats all in one place http://www.allbusiness.com/marketing-advertising/market-research-analysis-market/11469816- 1.html Collection of resources and links to free data http://delicious.com/smehro/mbam619+PEST+Social%20 PEST Social http://delicious.com/smehro/mbam619+PEST+Technology%20 PEST Technology
  5. 5. PEST Analysis: Example Federal Deficit as % of GDP
  6. 6. Example of fiscal policy : Visualizing federal budget
  7. 7. Example of fiscal policy: National Debt: 1940 to present
  8. 8. Who is funding our debt?
  9. 9. Citigroup's role in CDOs and the financial crisis
  10. 10. Auto worker wages http://www.nytimes.com/imagepages/2008/12/10/business/20081210_LEONHARDT_GRAPHIC.html
  11. 11. Economy at a glance Economic Indicators Real Economic Grow th Existing Home Sales Consumer Prices Sept. 2008 Oct. 2008 Unemployment Productivity -3.00% -2.00% -1.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% % change from previous period
  12. 12. World map:Population
  13. 13. New technologies are being adopted faster today
  14. 14. Change Will Be Relentless: Wireless industry example Micro Fuel Cells Light Emitting Polymer Displays Mesh Networks WCDMA Visibility 802.11b Wi-Fi GPRS UWB EDGE 4G Wireless MIMO MEMS Wireless Broadband Smart Dust As of 2Q03 Technology Peak of Trough of Slope of Plateau of Trigger Inflated Disillusionment Enlightenment Productivity Expectations Maturity 16
  15. 15. Gartner Predicts: Hot Spots Explode … 75,000,000 Users 167,000 Hot Spots Hot Spot Users/ Hot Spots 30,000 Users 1,000 Hot Spots 2001 2008 17
  16. 16. How the Web has grown and evolved
  17. 17. Two Key Forces Driving Business Change Faster Economic Pace Impatient Customers “Time Tortured” Emerge Threats Appear Triennial Strategy Rolling Windows Opportunity Keyholes Forecast Demand Chaotic Demand Convenience This Is the “Now Economy” 19
  18. 18. Culture: Innovation in art 20
  19. 19. 21
  20. 20. Analyzing the External Environment: PEST Analysis GDP GDP growth External Exchange rate Fiscal Policy Monetary Policy Environment Unemployment rate Skilled labor Tax laws ic Education levels Intellectual Property protection Poli om Trade unions Copyright laws tica l on nge Ec h a Infrastructure Securities Laws Cha Business climate ng e C Healthcare costs Raw materials Opportunities Opportunities New technologies l Threats Threats Materials technologies g ic a So Demographics Process technologies n o l o ge c Ch ial Income Distribution Information technologies Communication technologies e ch han ang Social stability T C e Ethnic patterns Government incentives Consumerism Energy costs Discretionary income Broadband penetration Fashions/fads Technology incubation Consumer trends © Sunil Mehrotra
  21. 21. Political Change Impact Fiscal Policy Monetary Policy Tax laws Intellectual Property protection Copyright laws Securities Laws Business climate International Trade
  22. 22. “Economy” Change Impact GDP GDP growth Exchange rate Unemployment rate Skilled labor Education levels Trade unions Infrastructure Healthcare costs Raw materials
  23. 23. It is crucial to describe the subject for PEST Impact Matrix the PEST analysis clearly so that people, contributing to the analysis, and those interpreting the results from PEST analysis, could understand the purpose of the PEST assessment and its implications Impact of Opportunities Threats Threats Strategic Nature of change response change Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
  24. 24. PEST Impact example: Impact of Opportunities Threats Threats Strategic Nature of change response change Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
  25. 25. PEST Analysis Example: ic om Poli on nge tica Ec h a Infrastructure Emerging l Ch Technologies Markets ang C e Digital Connections Originations Opportunities Opportunities Environmental Demographics Solutions l ic a So log e c Ch ial no ch hang ang Te C e © Sunil Mehrotra
  26. 26. PEST Impact example: Impact of Opportunities Threats Threats Strategic Nature of change response change Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
  27. 27. PEST Impact example: Demographics © Sunil Mehrotra
  28. 28. PEST Impact example: © Sunil Mehrotra
  29. 29. Student Examples: Pest Analysis Breanne Hayes April 2008 MBA Graziadio School of Business and Management Pepperdine University Elizabeth Passeretti April 2008 MBA Candidate Graziadio School of Business and Management Pepperdine University
  30. 30. PEST example: Impact of Opportunities Threats Threats Strategic Nature of change response change Shorten More Political Change FDA Longer time Product approval process conservative to market Development Cycle Economic US economic Consumer Generic Evaluate drugs more acquisitions Change downturn spending accepted down Identify Social Caring for Aging New growth product/market the elderly Population opportunities Change needs to serve the elderly New New New Technological Potential materials for cost/quality products Invest in new promising Change joint frontier competitors start-ups replacement © Sunil Mehrotra
  31. 31. PEST Impact example: Impact of Opportunities Threats Threats Strategic Nature of change response change Operational Democratic party More Political Change in power government Pressure on Efficiency to prices reduce costs control Economic $100+ crude oil Commodity Pressure Focus on Operational Change price prices on costs Efficiency increasing Identify Social Caring for Aging New growth product/market the elderly Population opportunities Change needs to serve the elderly Breakthrough New science New start- Potential Invest Technological in science. and new ups. new in/acquire Process technologies Disruptive competitors promising Change improvement imminent technologies start-ups technologies © Sunil Mehrotra
  32. 32. Contemplating the Future
  33. 33. Scenario Planning http://strategicframing.com/strategic-planning-workshop/
  34. 34. Nappies 1-6? What is visual thinking? What is Strategic Management? -strategic planning framework What is the role of the CEO/Leader? -Leadership styles What is PEST Analysis? Using the Internet for PEST Analysis -Data sources and web resources Identifying business Opportunities and Threats through PEST Impact analysis framework
  35. 35. Mnemonic 2

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