Environmental Scanning & Industry Analysis

1. Environmental Scanning & Industry Analysis Prepared by Mavic Pineda CCS-DLSU PSI

2. Environmental data form series of strategic environmental issues which are the trends & developments that are likely to determine future conditions. CCS-DLSU PSI

3. ORGANIZATION Structure Culture Resources Internal Environment CCS-DLSU PSI

4. Task Environment Suppliers Shareholders Employees/ Labor Unions Customers ORGANIZATION Government Structure Culture Resources Competitors Creditors Special Interest Groups Communities Trade Associations CCS-DLSU PSI

5. Societal Environment Political-Legal Forces Economic Forces TASK ENVIRONMENT Shareholders Suppliers Customers Employees/ Labor Unions ORGANIZATION Structure Culture Resources Government Competitors Creditors Socio-Cultural Forces Technological Forces Special Interest Groups Communities Trade Associations CCS-DLSU PSI

6. Scanning the External Environment Analysis of Societal Environment Economic, Sociocultural, Technological, Political-Legal Factors Community Analysis Market Analysis Competitor Analysis Supplier Analysis Interest Group Analysis Governmental Analysis Selection of Strategic Factors OPPORTUNITIES THREATS CCS-DLSU PSI

7. Issues Priority Matrix CCS-DLSU PSI

8. Competitive Analysis by Michael Porter Potential Entrants Industry Competitors Suppliers Buyers Rivalry Among Existing Firms Other Stakeholders Potential Substitutes CCS-DLSU PSI

9. Threat of New Entrants • Economies of scale • Product differentiation • Capital requirements • Switching costs • Access to distribution channels • Cost disadvantages independent of size • Government policy CCS-DLSU PSI

10. Rivalry Among Existing Firms • Number of competitors • Rate of industry growth • Product or service characteristics • Amount of fixed costs • Capacity • Height of exit barriers • Diversity of rivals CCS-DLSU PSI

11. Strategic Groups & Strategic Mapping CCS-DLSU PSI

12. Strategic Types • Defenders • Prospectors • Analyzers • Reactors CCS-DLSU PSI

13. Forecasting Techniques • Extrapolation • Brainstorming • Statistical modeling • Scenario writing • Use of industry scenarios CCS-DLSU PSI

14. Use of Industry Scenarios accdg to Porter 1. Examine possible shifts in societal variables 2. Identify uncertainties in each of the six forces of the task environment 3. Make a range of plausible assumptions about future trends 4. Combine assumptions about individual trends into internally consistent scenarios CCS-DLSU PSI

15. Use of Industry Scenarios accdg to Porter 5. Analyze the industry situation that would prevail under each scenario 6. Determine the sources of competitive advantage under each scenario 7. Predict competitors’ behavior under each scenario CCS-DLSU PSI

16. Synthesis of External Strategic Factors (EFAS) 1. List opportunities & threats (5-10 each) in column 1. 2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00. CCS-DLSU PSI

17. Synthesis of External Strategic Factors (EFAS) 3. Rate each factor from 5 (Outstanding) to 1 (Poor) in column 3 based on the company’s response to that factor. 4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in column 4. CCS-DLSU PSI

18. Synthesis of External Strategic Factors (EFAS) 5. Use column 5 (comments) for rationale used for each factor. 6. Add the weighted scores to obtain the total weighted score for the company in column 4. This tells how well the company is responding to the strategic factors in its external environment. CCS-DLSU PSI