Chap 6: Strategic Environmental Analysis Tools And Techniques Flashcards
Three major methods of gathering, reliable and relevant information
Environmental scanning
Environmental monitoring
Competitive intelligence
Focuses on external events that may influence the present position of a business
Environmental scanning
Primarily concerned with the trends of events
Environmental monitoring
Gives preferential importance and information about competitors
Competitive intelligence
Key elements of the physical environment
Physical resources
Climate
Wildlife
Strategic approach that is used to analyze the physical environment
Environmental scanning
Strategic factors of the societal or general environment
PEST:
Political or legal segment
Economic segment
Sociocultural segment
Technological segment
Objective of conducting a societal environment analysis
Determine the trends of the strategic factors that are relevant to the growth of an industry
Strategic tool used to scan the societal environment
PESTEL or STEEP analysis
This approach is supported by environmental monitoring
Is not a mere identification and listing of variables, which are commonly done under a particular segment or strategic factor
PESTEL or STEEP analysis
The immediate environment surrounding a business
Industry or test environment
Strategic factors of the industry environment
Customers, suppliers, creditors, employees, the government, competitors
Objective of the industry environment analysis
Determine the different forces, that drive competition
The analysis of the industry environment is done by
Do use of the three methods of collecting data for strategic analyses.
Porters five forces of competition model
Evaluate the level of competition and assesses the attractiveness of an industry itself
Porter’s five forces of competition model
Porters five forces of competition model strategic factors
Rivalry among competing companies
Threats of new entrants
Bargaining power of buyers
Threats of substitute products
Bargaining power of suppliers
Strategic factors of the internal environment of a company
Corporate culture
Organizational structure
Business resources
To determine how culture influences strategy formulation
Corporate culture
To determine what structure can effectively and efficiently achieve organizational goals
Organizational structure
To determine which business resource contributes to the achievement of competitive advantage
Business resources
Commonly used tools to analyze a business resource
SWOT analysis
VRIO framework
Value chain analysis model
BCG growth-share matrix model
To assess a company’s strengths and weaknesses, so that opportunities are exploited, and threats are avoided or minimized
SWOT analysis
To identify a company’s resource that is considered valuable, rare and difficult to imitate and assess if the company is organized to use it as a state in the competitive advantage
VRIO framework
To determine which activities create value, and which create cost so that the profit margin is improved, and competitive advantage is achieved
Value chain analysis model
To determine the status of a company’s unit of product portfolio in terms of market share and growth
BCG growth-share matrix model
Evaluate the internal strengths and weaknesses of the company against what the external opportunities and threats offer
SWOT analysis model
A strategic management tool that assesses the resources of a company to achieve competitive advantage
VRIO framework
Pair up VRIO framework with
SWOT analysis model and value chain analysis
A strategic management tool that evaluates the internal activities of a company when producing goods and delivering services
Value chain analysis model
This model groups business activities into primary and support activities
Value chain analysis model
Include inbound, logistics, operations, outbound, logistics, marketing, and service
Primary activities
Include company, infrastructure, human resource management, technology development, and procurement
Support activities
Represents the benefits that are derived from a product or service
Value
A strategic management model that assesses a companies, business units or products in terms of market, share, and market growth
BCG growth-share matrix model
Acts as the proxy for competitive advantage
Market share
Serves as the proxy for industry attractiveness
Market growth
Relative market share formula
Relative market share = company’s market share or revenue / competitors market share or revenue
