Macro-Environment Analysis

Question 1

What are the 6 Environmental Factors of an Organisation?

Answer 1

PESTEL -
Political
Economic
Social
Technological
Ecological
Legal

Question 2

What is PESTEL Analysis?

Answer 2

Helps identify key drivers of change that managers need to address their strategic choices.
Use data to support points and analyse trends using dates.
Identify opportunities & threats.

Question 3

What does PESTEL Analysis allow for?

Answer 3

Forecasting and scenario analysis

Question 4

What are the 3 Fundamental Approaches in Forecasting?

Answer 4

These are based on varying degrees of certainty (low to high)…
* Single point
* Range
* Alternative futures

Question 5

What are the Directions of Change in Forecasting?

Answer 5

Megatrends - large scale changes which influences many activities over long period of time (decades).

Inflexion points - trends shift sharply up/down.

Weak signals - advanced signs of future trends, often unstructured and fragmented bits of info.

Question 6

What is Scenario Analysis?

Answer 6

Plausible views of how environment of organisation may develop in future based on key drivers of change.
More than a single view is offered to evaluate future strategic options.

Question 7

How are Scenarios Carried Out?

Answer 7

Identify most relevant scope (product & time span) of study.
Identify key drivers of change (PESTEL) and select opposing outcomes.
Monitor progress and early warning signs.