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Strategic Management

Strategic Management. Business Environment Scanning General . Business Environment Scanning Lecture Outline. Layers of the Business Environment The Macroenvironment PESTEL Porter’s National Diamond. Business Environment Scanning and SWOT Analysis.

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Strategic Management

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  1. Strategic Management Business Environment Scanning General

  2. Business Environment ScanningLecture Outline • Layers of the Business Environment • The Macroenvironment • PESTEL • Porter’s National Diamond

  3. Business Environment Scanningand SWOT Analysis • Strengths ) Analyses organisational ) resource capability. • Weaknesses ) Internal Analysis • Opportunities ) Analyses business ) environment. • Threats ) External Analysis

  4. Critical Success Factors • Those product and service features that are particularly valued by customer groups and, therefore, where an organisation must excel in order to outperform competitors. • Typical CSFs Reputation Architecture Innovation After-sales service Delivery reliability Testing Technical quality

  5. Layers of the business environment

  6. Understanding the Macro-Business Environment • Diversity • Many different influences (or just a few)? • Complexity • Interconnected or isolated influences? • Speed of change (particularly IT) • Turbulent and Chaotic? or • Placid and Predictable

  7. Nature of Business Environment(Emery and Trist) Many NUMBER OF INFLUENCES Few Complex Stable Complex Dynamic Simple Stable Simple Dynamic Slow SPEED OF Fast CHANGE

  8. Macroenvironment – PESTEL

  9. Macroenvironment – PESTEL • Political • Government stability • Taxation policy • Foreign trade regulations • Social welfare policies • Economic • Business cycles • GNP trends • Interest rates • Money supply • Inflation • Unemployment • Disposable income

  10. Macroenvironment – PESTEL • Sociocultural • Population demographics • Income distribution • Social mobility • Lifestyle changes • Attitudes to work and leisure • Consumerism • Levels of education • Technological • Government spending on research • Government and industry focus on technological effort • New discoveries /developments • Speed of technology transfer • Rates of obsolescence

  11. Macroenvironment – PESTEL • Environmental • Environmental protection laws • Waste disposal • Energy consumption • Legal • Competition law • Employment law • Health and safety • Product safety

  12. Key Aspects of PESTEL Analysis • Not just a list of influences • Need to understand key drivers of change • Focus is on future impact of environmental factors

  13. The Key Driver of Change?Globalisation

  14. Determinants of National Advantage in a Global Business Environment • Some countries are more competitive than others • Some industries within countries are more competitive than others

  15. Porter’s Diamond The Determinants of National Advantage .

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