Scribd Logo
Upload

Welcome to Scribd!

  • 38 views

    Environ

    Uploaded by

    Riddhi Agrawal
    The document provides information on conducting an environmental analysis to understand an organization's competitive position. It discusses learning outcomes, steps in the analysis including auditing influences, identifying competitive forces and position. Approaches to making sense of the environment are presented, from simple to complex and dynamic. Tools for audit like PEST analysis and Porter's Diamond are explained. Porter's Five Forces framework and life cycle model are also summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    Environ

    Uploaded by

    Riddhi Agrawal
    38 views23 pages
    The document provides information on conducting an environmental analysis to understand an organization's competitive position. It discusses learning outcomes, steps in the analysis including auditing influences, identifying competitive forces and position. Approaches to making sense of the environment are presented, from simple to complex and dynamic. Tools for audit like PEST analysis and Porter's Diamond are explained. Porter's Five Forces framework and life cycle model are also summarized.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document provides information on conducting an environmental analysis to understand an organization's competitive position. It discusses learning outcomes, steps in the analysis including auditing influences, identifying competitive forces and position. Approaches to making sense of the environment are presented, from simple to complex and dynamic. Tools for audit like PEST analysis and Porter's Diamond are explained. Porter's Five Forces framework and life cycle model are also summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    38 views23 pages

    Environ

    Uploaded by

    Riddhi Agrawal
    The document provides information on conducting an environmental analysis to understand an organization's competitive position. It discusses learning outcomes, steps in the analysis including auditing influences, identifying competitive forces and position. Approaches to making sense of the environment are presented, from simple to complex and dynamic. Tools for audit like PEST analysis and Porter's Diamond are explained. Porter's Five Forces framework and life cycle model are also summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 23

    Learning Outcomes

    At the end of this session you will: Understand the nature of the environment Be able to conduct an audit of the environmental influences Be able to analyse the competitive environment Understand how to identify the organisations competitive position Appreciate the nature of environmental analysis in practice

    Steps in Environmental Analysis


    Assess the nature of the environment Audit environmental influences Identify key competitive forces Identify competitive position Identify key opportunities & threats

    Strategic Position

    Approaches to Making Sense of the Environment Environmental Conditions

    Simple Static

    Complex

    Historical analysis Forecasting

    Decentralisation of organisations

    Environmental Conditions
    Scenario planning

    Experience and learning

    Dynamic

    Audit of Environmental Influences


    PEST analysis

    Porters Diamond

    PEST Analysis 1. What environmental factors are affecting the


    organisation? 2. Which of these are the most important at the present time? In the next few years?

    Political/leg al

    Economic Sociocultural cal

    Technologi

    Monopolies legislation Environmental protection


    laws

    Political/le gal

    Taxation policy Foreign trade regulations Employment law Government stability

    Econo mic

    Business cycles GNP trends Interest rates Money supply Inflation Unemployment Disposable income Energy availability and
    cost

    Population demographics Income distribution Social mobility Lifestyle changes Attitudes to work and
    leisure

    Sociocultural

    Consumerism Levels of education Cultural factors

    Govt spending on research Govt and industry focus of technological


    effort

    Technologi cal

    New discoveries/development Speed of technology transfer Rates of obsolescence

    Globalisati on refers to the belief that the world is becoming


    a single market -

    Ease of communications (travel, telecommunications) Some markets global for some time - economies of
    scale -civilian aircraft, motor vehicle manufacture

    More opportunities due to greater export orientation of developing countries Co's seeking opportunities in developing countries
    as they start to industrialise

    Shift towards service industries, move to low cost'


    countries eg. clothing and textiles

    Drivers of globalisation
    Global market convergence Similar customer needs Global customers Transferable marketing Trade policies Technical stds Host govt policies Scale economies Sourcing efficiencies Country-specific costs High product development costs

    Govt influence

    Global strategies

    Cost advtgs

    Interdependence Competitors global High exports/imports Global competition

    Competitive Advantage of Nations - Porter


    Why does a nation become the home base for successful international competitors in an industry? Why are firms based in a particular nation able to create and sustain competitive advantage against the world's best competitors in a particular field? Why is one nation often the home for so many of an industry's world leaders?

    Competitive Advantage of a Nation's Industries


    Determined by the following factors and relationships between them:

    Factor conditions (basic Vs.


    advanced)

    Demand conditions Related and Supporting Industries Firm Strategy, Structure and Rivalry

    The Diamond of Competitive Advantage


    Firm strategy, structure, rivalry

    Factor conditions

    Demand conditions

    Related and supporting industries

    The Competitive Environment

    Porters Five Forces Analysis

    Elements of Industry Structure


    NEW ENTRANTS

    INDUSTRY COMPETITORS SUPPLIERS

    Intensity of Rivalry

    BUYERS

    SUBSTITUTES

    Five Forces Analysis (1)


    The threat of entry ... Dependent on barriers to entry such as: Economies of scale Capital requirements of entry Access to distribution channels Cost advantages independent of size (eg the experience curve) Expected retaliation Legislation or government action Differentiation

    Five Forces Analysis (2)


    Buyer power is likely to be high when: There is a concentration of buyers There are many small operators in the supplying industry There are alternative sources of supply Components or materials are a high percentage of cost to the buyer leading to shopping around Switching costs are low There is a threat of backward integration

    Five Forces Analysis (3)


    Supplier power is high when: There is a concentration of suppliers Switching costs are high The supplier brand is powerful Integration forward by the supplier is possible Customers are fragmented and bargaining power low

    Five Forces Analysis (4)


    Threat of substitutes Substitutes take different forms: Product substitution Substitution of need Generic substitution Doing without

    Five Forces Analysis (5)


    Competitive Rivalry is high when: Entry is likely Substitutes threaten Buyers or suppliers exercise control Competitors are in balance There is slow market growth Global customers increase competition There are high fixed costs in an industry Markets are undifferentiated There are high exit barriers

    The life cycle model


    Development Growth Shakeout Maturity Decline

    Users/ buyers

    Growing Few: trial Growing of early adopters: trial selectivity of purchase adopters of product /service Entry of competitor sAttempt to achieve trial Fight for Undifferen share -tiated products /services

    Competitive Few conditions players

    Saturation of users Repeat purchase reliance May be many Fight to maintain Likely price share cutting for Difficulties in volume gaining/ Shake-out of taking share Emphasis weakest competitors on efficiency /low cost

    Drop-off in usage

    Exit of some competitors Selective distribution

    Five Forces Analysis: Key Questions and Implications


    What are the key forces at work in the competitive environment? Are there underlying forces driving competitive forces? Will competitive forces change? What are the strengths and weaknesses of competitors in relation to the competitive forces? Can competitive strategy influence competitive forces (eg by building barriers to entry or reducing competitive rivalry)?

    You might also like