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Business Environment Analysis in Practice. Dr. Patrik Ström Department of Human and Economic Geography patrik.strom@geography.gu.se. Why business environment analysis?. Take informed decisions – ”the right decisions” General or sector specific information Geographical level Factors
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Business Environment Analysis in Practice Dr. Patrik Ström Department of Human and Economic Geography patrik.strom@geography.gu.se
Why business environment analysis? • Take informed decisions – ”the right decisions” • General or sector specific information • Geographical level • Factors • Politics – e.g. system • Economy – GDP, debt, trade, FDI • Social aspects – education, health care, welfare • Technology – level, research, policies
Methods for BEA? • Scenario planning - results • Structure planning – models • e.g. Porter, 1990; Florida, 2002 • Information gathering and analysis • e.g. EU legal framework, macro economy
Example: Criteria for market entry (medical) • Stability and risks • Possibility to operate / get returns • Potential to become #1 • Execution capability • Overall size and potential • Market attractiveness • Market entry options • Deal structuring / valuation
Define the problem • Make sure you always know what (and what not) to solve • Break down the work into manageable work streams (MECE = mutually exclusive, collectively exhaustive) • Make sure all stakeholders have the same view
Develop the work plan/organize the team • There has to be a team leader who is overall accountable, guarantees delivery and makes final judgment call • Ensure you have clear milestones of what to be delivered / by when and that these are followed up on
Solve the problem • Make realistic assumptions • • Make sure you have a solid plan means -> success or failure • • You make decisions under uncertainty -> minimize uncertainty • • Limited availability of information -> need to make assumptions • • Use multiple sources of information -> triangulate assumptions • • Sanity check your assumptions -> does it make sense? • • Make sure you can back-up your assumptions -> state references • • Don’t run out of time -> use the 80/20 rule • • Be prepared to modify the work plan and focus on short notice
Report the results • •Spend some time “thinking through the story” • Logic sequence • Easy to follow • What does the audience want to hear about? • • Focus on the essentials • Supporting / non-critical analysis in back-up • Clear recommendations with supporting rationale • Always have 3 strong supporting rationale • Clear messages, graphs, and so-what’s