4.2 Analysing the operational environment Flashcards
Irrespective of the type of organisation that we are considering from a strategic or an operational perspective, it is essential that we consider the breadth and depth of the ___________ within which an organisation exists
environment
What three categories of influences impact on a business’ strategy?
Environmental influences - e.g. SCR
Technological influences - e.g. rapid change in technology
Human influences - e.g. human competitiveness
There are four levels to the “assessment of data”.
1) Application of meaning
2) Consideration of information
3) Challenge against existing knowledge
4) ____________________________
Restructuring opinions and adjustment of knowledge
What are the three stages to a supply chain?
Source
Make
Deliver
The biggest single problem with macro thinking faced by the directors of the organisation is the sheer distance of the far ___________, and the seeming lack of ability to influence or control various external forces.
environment
What is a “megatrend”?
Significant changes which are slow to form but have significant impact (e.g. aging populations)
Changeability is the degree to which the external _______ is likely to change.
environment
Predictability is the degree to which changes in the environment can be __________.
predicted
PESTEL is an acronym for the analysis of the macro environment. What does PESTEL stand for?
Political Economic Socio-cultural Technological Environmental Legal
What sociocultural factors need to be considered when developing strategy?
Demographics
Wealth distribution
What technological factors need to be considered when developing strategy?
Technology push or market pull
People skill divergence
Diffusion
What environmental factors need to be considered when developing strategy?
Sustainability and stewardship
Global warming
Public conscience
What legal factors need to be considered when developing strategy?
Labour/employment law
Environmental legislation
Finance, taxation and reporting requirements
Ownership, merger and competition law
Johnson (2017) introduced the following methods of forecasting:
- single point forecasting
- range forecasting
- alternative futures forecasting
Summarise these approaches.
Single point - we are able to forecast a single defined outcome
Range - we assign probabilities to a range of possibilities
Alternative futures - we define a number of potential fixed outcomes based on certain known variables.
Ringland (2014) established 7 “dimensions” for scenario planning. What were these?
Vital issues Positive outcome Negative outcome Internal systems Key learnings Key decisions Personal dimension
Which major banking acquisition in 2000 had a major impact on the UK financial environment?
RBS’ acquisition of NatWest
When does a monopoly exist?
Where there is no competitive rivalry.
When does an oligopoly exist?
Where there is a high concentration of a defined number of players (e.g the Big Four)
When does perfect competition exist?
Where there are many competitors provide similar and largely undifferentiated products and services.
What are the four stages of a business’ lifecycle?
Introduction
Growth
Maturity
Decline
What are Porter’s (1980) five forces?
Existing competition (today, first force) Supplier bargaining power (second force) Customer bargaining power (third force) Potential new entrants (fourth force) Substitute products (fifth force)
What is meant by “critical mass” in market competition?
Holding a controlling or majority share or influence in any market, product or service.
What barriers does Porter identify for new entrants entering a market? (6 things)
1 Economies of scale - must be a degree of certainty of gaining market share
2 Product differentiation - needs a unique selling point
3 Capital requirement - cost of entry
4 Customer persuasion - need to give a reason for change
5 Government policy - legal restraints on competition
6 Organisational strength - retaliation from existing players
How do PESTEL analysis and the Five Forces model differ in their approaches?
PESTEL considers wider factor such as economy, social trends etc, whiles Five Forces examines pressures from the near environment more closely (including suppliers, customers etc).
Johnson (2017) introduced the concept of market segmentation, which recognises the differences that exist between different groups of _________, and their differing needs, expectations and ways of behaving.
customers
