STRATEGIC MANAGEMENT & BUSINESS POLICY 10 TH EDITION

1. CHAPTER 4 Environmental Scanning and Industry Analysis STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER

2. Environmental Scanning • Societal environment -- • Economic forces • Technological forces • Political-legal forces • Sociocultural forces

3. Societal Environment • Economic Forces -- • Regulate exchange of materials, money, energy and information

4. Societal Environment • Technological Forces -- • Generate problem-solving inventions

5. Societal Environment • Political-legal Forces -- • Allocate power; provide laws and regulations

6. Societal Environment • Sociocultural Forces -- • Regulate values, mores, and customs of society

7. Task Environment • Task environment -- • Elements or groups that directly affect a corporation and are affected by it

8. Task Environment • Industry Analysis -- • In-depth examination of key factors within a corporation’s task environment

9. Variables in Societal Environment

10. Demographic Trends

11. Transformational Sociocultural Trends • 8 Current Trends – • Increasing environmental awareness • Growing health consciousness • Expanding seniors market • Impact of the Generation Y boomlet • Declining mass market • Changing pace and location of life • Changing household composition • Increasing diversity of workforce & market

12. International Societal Environments

13. Scanning the Task Environment

14. Ethical Behavior • “business ethics” • Argument that there is no such thing … it is an oxymoron

15. Ethical Decision Making • Corporate practices -- • Massive write-downs and restatements of profit • Misclassification of expenses as capital expenditures • Pirating corporate assets for personal gain

16. External Strategic Factors • Strategic myopia -- • Willingness to reject unfamiliar as well as negative information

17. Issues Priority Matrix

18. Analyzing the Task Environment

19. Porter’s Approach to Industry Analysis • Threat of New Entrants – • Economies of scale • Product differentiation • Capital requirements • Switching costs • Access to distribution channels • Cost disadvantages • Government policy

20. Porter’s Approach to Industry Analysis • 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