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The Strategy Formulation Process

(c) Macmillan

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The Strategy Formulation Process

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    1. (c) Macmillan & Tampoe 2001 1 The Strategy Formulation Process Chapter 9 Strategic Assessment Analysis of the external environment

    2. (c) Macmillan & Tampoe 2001 2 Purpose of External Analysis To understand the external environment as it affects the enterprise 3 levels of analysis: General changes in business environment Changes within the industry Activities of competitors and other specifics

    3. (c) Macmillan & Tampoe 2001 3 PEST Analysis Political Legislation and Regulation International relations Economic Economic cycles Currency rates Capital, labour and commodity markets Social Demographics Tastes Environmental awareness Technological Process effect development Product capability

    4. (c) Macmillan & Tampoe 2001 4 Pressures affecting the view of the external environment Stakeholders Corporate Governance Corporate Responsibility N.B. Changes in any of above are particularly important

    5. (c) Macmillan & Tampoe 2001 5 Figure 9.1 Different Models of Governance

    6. (c) Macmillan & Tampoe 2001 6 Threats to Corporate Survival Porter’s 5 forces Government ideology & policy Fashion and fickleness Complementors Lobby and Interest groups

    7. (c) Macmillan & Tampoe 2001 7

    8. (c) Macmillan & Tampoe 2001 8 Figure 9.4 Life Cycle Matrix

    9. (c) Macmillan & Tampoe 2001 9 Competitor Analysis Individual competitors Groups of competitors Extent of data varies by industry and determines what analysis is possible May be possible to analyze competitors using same techniques as for ourselves

    10. (c) Macmillan & Tampoe 2001 10 The Strategic Triangle Ohmae, K (1982) The Mind of the Strategist Consists of the Customer, the company and competitors The company and competitors deliver value to the customer The company and competitors compete on cost The company recognises different customer segments and determines value to each segment accordingly The company recognises the competitors in each segment and attempts to better its cost bases vis-à-vis the competition

    11. (c) Macmillan & Tampoe 2001 11

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