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Strategic Management Environmental Analysis

Strategic Management Environmental Analysis. Prof.Dr. E.Vatchkova. Contents. Environmental influences The PESTEL framework Environmental factors and components Environmental dimensions The five forces framework SWOT. ENVIRONMENT WHAT IS POSSIBLE?. 1. STRATEGY WHAT DO WE DO?. 4. 3.

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Strategic Management Environmental Analysis

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  1. Strategic ManagementEnvironmental Analysis Prof.Dr. E.Vatchkova

  2. Contents • Environmental influences • The PESTEL framework • Environmental factors and components • Environmental dimensions • The five forces framework • SWOT

  3. ENVIRONMENT WHAT IS POSSIBLE? 1 STRATEGY WHAT DO WE DO? 4 3 2 OBJECTIVES WHAT DO WE WANT? RESOURCES WHAT DO WE HAVE?

  4. The PESTEL framework- six main types of influencesJ&Sh, 2002 • Political • Economic • Sociocultural • Technological • Environmental • Legal

  5. Political • Government stability • Taxation policy • Foreign trade regulations • Social welfare policies

  6. Economic • Business cycles • GNP trends • Interest rates • Money supply • Inflation • Unemployment • Disposal income

  7. GDP growth(source: NSI)

  8. Dynamics of direct foreign investments(mill., Source: BNB0)

  9. Unemployment level(% of economic active population, Source: Employment agency)

  10. Average salary by economic sectors (source: NSI)

  11. Real incomes increase level 2000-2005 (Source: ISSR)

  12. Territorial unemployment level

  13. Sociocultural • Population demographics • Income distribution • Social mobility • Lifestyle changes • Attitudes to work and leisure • Consumerism • Levels of education

  14. Technological • Government spending on research • Government and industry focus on technological effort • New discoveries/development • Speed of technology transfer • Rates of obsolence

  15. Environmental • Environmental protection laws • Waste disposal • Energy consumption

  16. Legal • Monopolies legislation • Employment law • Health and safety • Product safety

  17. Drivers of globalization • Global market convergence • Cost advantages • Global competition • Government influence

  18. Global market convergence Similar customer needs Global customers Transferable marketing Scale economies Sourcing efficiencies Country specific costs High product development costs Global strategies Cost advantage Trade policies Technical standards Host government policies Government influence Interdependence Competitors global High exports/imports Global competition Drivers of globalization J&Sh,2002

  19. Environmental dimensionsAldag, Stearns,1987

  20. Organizational adaptation (coping strategies) • Buffering • Smoothing • Forecasting • Rationing • Boundary spanning • Structural complexity • Managerial succession

  21. Environmental control • Establishing favorite linkages • Manipulating the environment

  22. Establishing favorable linkages • Mergers and/or acquisitions • Joint ventures • Interlocking directorates • Executive recruitment • Advertising

  23. Manipulating the environment • Change domains • Lobbying • Trade associations

  24. SWOT ANALYSIS DIAGRAM Numerous Environmental Opportunities QUADRANT || QUADRANT | Critical Internal Weaknesses Substantial Internal Strengths QUADRANT ||| QUADRANT |V Major Environmental Treats

  25. Forces Affecting Industry Competition Potential Entrants Treat of New Entrants Industry Competitors Bargaining Power of Suppliers Suppliers Buyers Bargaining Power of Buyers Rivalry among Existing Firms Treat of Substitute Products or Services Substitutes

  26. TANK YOU !

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