Strategic Planning: Environmental Scanning. Dr. Clive Vlieland-Boddy FCA FCCA MBA. I think you should be more explicit here in step two. “How can you govern a country which has 246 varieties of cheese?” -- Charles De Gaulle.
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Dr. Clive Vlieland-Boddy
FCA FCCA MBA
-- Charles De Gaulle
-- John Perton
TOOLS AND METHODS
Strenghts, Weaknesses, Opportunities and Threats Analysis
Economic Development Scenarios
External Environment as a complete surprise, and is not preceded by a period of worry and depression.”is not controllable
ScanningExternal Marketing Environment
The environmental scan includes the following components:
Scan External Environment
Identify Strategic Factors
Implementing Strategy via Changes in:
Scan Internal Environment
Identify Strategic Factors
STRATEGIC MANAGEMENT: SWOT ANALYSIS as a complete surprise, and is not preceded by a period of worry and depression.”
1 2 3
1 2 3
Scaning of Regional Environment
Analysis of Strenghts and Weaknesss
Analysis of Opportunities and Threats
Opportunities 1 2 3
OS Actions OxSx OxSx OxSx
OW Actions OxWx OxWx OxWx
TS Actions TxSx TxSx TxSx
TW Actions TxWx TxWx TxWx
Threats 1 2 3
Strong brand names
Good reputation among customers
Cost advantages from proprietary know-how
Exclusive access to high grade natural resources
Favorable access to distribution networks
Lack of patent protection
A weak brand name
Poor reputation among customers
High cost structure
Lack of access to the best natural resources
Lack of access to key distribution channels
An unfulfilled customer need
Arrival of new technologies
Loosening of regulations
Removal of international trade barriers
Shifts in consumer tastes away from the firm's products
Emergence of substitute products
Increased trade barriers
To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed.
The strategy shall define priorities and actions that
An alternative to SWOT analysis
Identification of Regional Drivers and Regional Issues
Development Scenario 1
Development Scenario 2
Assessment of Regional Drivers and Dependency Analysis
Elaboration of Dependency Matrix
Development Scenario 3
Development Scenario 4
Definition and selection of pilot actions
of strategic priorities
Interpretation & discussionof analysesresults;
Regular meetings of the Steering Committee
Threat of substitute products
Potential new entrants
Rivalry among competitors
Bargaining power of buyers
Bargaining power of suppliers
Some add Environmental and Legal to extend PEST to PESTEL
A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:
Strategy formulation is vital to the well-being of a company or organization.
A leadership skill
A process that leaders use to focus for positioning the firm
Assess, decide, act, and review
Leaders determine how much to stretch
How to create the benefits for customers
Strategy can be formulated on three different levels:
The Annual Business Plan
Monitoring and Control
The implementation of the strategy must be monitored and adjustments made as needed.
Evaluation and control consists of the following steps:
In general terms, there are two main approaches, which are opposite but complement each other in some ways, to strategic management:
The Industrial Organizational Approach
The sociological approach
Strategic management techniques can be viewed as bottom-up, top-down, or collaborative processes.
Stifle creativity, especially if it is rigidly enforced.
When a strategy becomes internalized into a corporate culture, it can lead to group think
Can cause an organization to define itself too narrowly.
In 2000, Gary Hamel coined the term strategic convergence –
Explain the limited scope of the strategies being used by rivals in greatly differing circumstances.
Strategies converge more than they should, because the more successful ones are imitated by firms that do not understand that the strategic process involves designing a custom strategy for the specifics of each situation.
Social Forces- as a complete surprise, and is not preceded by a period of worry and depression.”
The Poverty of Time
A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep...
An environmental scan of today’s marketplace as a complete surprise, and is not preceded by a period of worry and depression.”
SOCIAL FORCES- as a complete surprise, and is not preceded by a period of worry and depression.”Demographics
Growth in developing nations
Shift of age structure of populations
Rising income levels and living standards
ECONOMIC FORCES as a complete surprise, and is not preceded by a period of worry and depression.”
Gross Income – 100% of earnings
Disposable Income-85% of earnings
Discretionary Income-15% of earnings
Technological Factors as a complete surprise, and is not preceded by a period of worry and depression.”
COMPETITIVE FORCES as a complete surprise, and is not preceded by a period of worry and depression.”
Demographics as a complete surprise, and is not preceded by a period of worry and depression.”
Demographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.
Baby Boomers as a complete surprise, and is not preceded by a period of worry and depression.”
Baby boomers is the generation of children born between 1946 and 1964.
Generation X as a complete surprise, and is not preceded by a period of worry and depression.”
Generation X includes the 15% of the U.S. population born between 1965 and 1976.
Generation Y as a complete surprise, and is not preceded by a period of worry and depression.”
Generation Y includes the 72 million Americans born between 1977 and 1994.