1 matt h. evans, [email protected] assessing environments process and tools

1Matt H. Evans, [email protected]

Assessing Environments

Process and Tools


Strategic Planning ModelStrategic Planning ModelA B C D EA B C D E

• Environmental Scan

Assessment

• Background Information

• Situational Analysis

• SWOT – Strength’s, Weaknesses, Opportunities, Threats

• Situation – Past, Present and Future

• Significant Issues

• Align / Fit with Capabilities

• Mission & Vision

• Values / Guiding Principles

• Major Goals

• Specific Objectives

• Performance Measurement

• Targets / Standards of Performance

• Initiatives and Projects

Baseline Components

• Performance Management

• Review Progress – Balanced Scorecard

• Take Corrective Actions

Down to Specifics

Evaluate

Where we are Where we want to be How we will do it How are we doing

• Gaps • Action Plans • Feedback upstream – revise plans


Assessment


Business Environment in 21Business Environment in 21stst Century Century

• Technological Innovation– Information highway– The Internet– Microprocessors– Automated factories– On-line marketing (Netscape Navigator,

Amazon.com)• Globalization

– Merger, Acquisition, mega company


Cont.Cont.

• Deregulation– AFTA, ACFTA, ANZAFTA, AEC– CBTA, FDI, SEZ

• Changing Political Systems– Centrally-planned economy and

protectionism – gone– Capitalism, Market-oriented economy and

integration into regional and global value chains


Cont.Cont.

• Demographics and the New Global Workforce– Free movement of knowledge worker

(AEC)– MOU on cross-border migrant worker


Assessment Model:Assessment Model:S W O TS W O T

Assessment

External Assessment: Marketplace, competitor’s, social trends, technology, regulatory environment, economic cycles .

External Assessment: Marketplace, competitor’s, social trends, technology, regulatory environment, economic cycles .

Internal Assessment: Organizational assets, resources, people, culture, systems, partnerships, suppliers, . . .

Internal Assessment: Organizational assets, resources, people, culture, systems, partnerships, suppliers, . . .

• Easy to Understand• Apply at any

organizational level

• Needs to be Analytical and Specific

• Be honest about your weaknesses

Good Points Possible Pitfalls

SWOT SWOT


Strength’sStrength’s Assessment

• Strength’s – Those things that you do well, theStrength’s – Those things that you do well, the high value or performance pointshigh value or performance points• Strengths can be tangible: Loyal customers,Strengths can be tangible: Loyal customers, efficient distribution channels, very high qualityefficient distribution channels, very high quality products, excellent financial conditionproducts, excellent financial condition• Strengths can be intangible: Good leadership,Strengths can be intangible: Good leadership, strategic insights, customer intelligence, solidstrategic insights, customer intelligence, solid reputation, high skilled workforcereputation, high skilled workforce• Often considered “Core Competencies” – Best Often considered “Core Competencies” – Best leverage points for growth without draining your leverage points for growth without draining your resources resources


WeaknessesWeaknesses Assessment

• Weaknesses – Those things that prevent you fromWeaknesses – Those things that prevent you from doing what you really need to dodoing what you really need to do• Since weaknesses are internal, they are withinSince weaknesses are internal, they are within your controlyour control• Weaknesses include: Bad leadership, unskilledWeaknesses include: Bad leadership, unskilled workforce, insufficient resources, poor productworkforce, insufficient resources, poor product quality, slow distribution and delivery channels,quality, slow distribution and delivery channels, outdated technologies, lack of planning, . . .outdated technologies, lack of planning, . . .


OpportunitiesOpportunities Assessment

• Opportunities – Potential areas for growth andOpportunities – Potential areas for growth and higher performancehigher performance• External in nature – marketplace, unhappy External in nature – marketplace, unhappy customers with competitor’s, better economiccustomers with competitor’s, better economic conditions, more open trading policies, . . conditions, more open trading policies, . . • Internal opportunities should be classified asInternal opportunities should be classified as Strength’s Strength’s • Timing may be important for capitalizing onTiming may be important for capitalizing on opportunitiesopportunities


ThreatsThreats Assessment

• Threats – Challenges confronting the organization,Threats – Challenges confronting the organization, external in natureexternal in nature• Threats can take a wide range – bad pressThreats can take a wide range – bad press coverage, shifts in consumer behavior, substitutecoverage, shifts in consumer behavior, substitute products, new regulations, . . . products, new regulations, . . . • May be useful to classify or assign probabilities toMay be useful to classify or assign probabilities to threatsthreats• The more accurate you are in identifying threats, The more accurate you are in identifying threats, the better position you are for dealing with thethe better position you are for dealing with the “ “sudden ripples” of change sudden ripples” of change


SWOT GridSWOT Grid Lao SMELao SME

Strengths Weakness

Famous Lao handicrafts

Good sources of raw materials (wood, land)

Traditional production cluster (silver smith, gold smith, weaving villages)

Low-skilled / Untrained workforce

Lack capital

Limited production ability

Gov. lack fund for new initiatives/ development

Opportunities Treats

Lao Connection abroad

FTAs

LDC Preferential Status

Thai investors’ interest - IKEA

Influx of foreign goods/ substitute products

Influx of foreign workers and SMEs

Young prefer to go abroad


USE SWOT to form StrategiesUSE SWOT to form Strategies

Opportunities Threats

ST

++ InvestClear matches of strengths and opportunities lead to comparative advantage

Famous Lao Handicraft + Lao Connection abroad

+- DefendAreas of threat matched by areas of strength indicate a need to mobilize resources either alone or with others.

Wn

-+DECIDE - +Areas of opportunity matched by areas of weakness require a judgement call: invest or divest; collaborate.

--DAMAGE CONTROL - -Areas of threat matched by areas of weakness indicate need for damage control or divest.


Baseline


Why create a baseline?Why create a baseline? Baseline

• Puts everything about the organization into aPuts everything about the organization into a single context for comparability and planningsingle context for comparability and planning• Descriptive about the company as well as theDescriptive about the company as well as the overall environmentoverall environment• Include information about relationships –Include information about relationships – customers, suppliers, partners, . . . customers, suppliers, partners, . . . • Preferred format is the Organizational ProfilePreferred format is the Organizational Profile


Organizational ProfileOrganizational Profile1. Operating Environment1. Operating Environment

Baseline

• Products and Services – Suppliers, DeliveryProducts and Services – Suppliers, Delivery Channels, Contracts, Arrangements, . . . Channels, Contracts, Arrangements, . . . • Organizational Culture – Barriers, Leadership,Organizational Culture – Barriers, Leadership, Communication, Cohesiveness . . . . Communication, Cohesiveness . . . . • Workforce Productivity – Skill levels, diversity,Workforce Productivity – Skill levels, diversity, contractor’s, aging workforce, . . .contractor’s, aging workforce, . . .• Infrastructure – Systems, technology, facilities, . . Infrastructure – Systems, technology, facilities, . . • Regulatory – Product / Service Regulation, ISORegulatory – Product / Service Regulation, ISO Quality Standards, Safety, Environmental, . . .Quality Standards, Safety, Environmental, . . .


Organizational ProfileOrganizational Profile2. Business Relationships2. Business Relationships

Baseline

• Organizational Structure – Business Units,Organizational Structure – Business Units, Functions, Board, Management Layers, . . . Functions, Board, Management Layers, . . . • Customer Relationships – Requirements,Customer Relationships – Requirements, Satisfaction, Loyalty, Expectations, . . . Satisfaction, Loyalty, Expectations, . . . • Value Chain – Relationship between everyone inValue Chain – Relationship between everyone in the value chain . . . . the value chain . . . . • Partner Relationships – Alliances, long-termPartner Relationships – Alliances, long-term suppliers, customer partnerships, . . . suppliers, customer partnerships, . . .


Organizational ProfileOrganizational Profile3. Key Performance Categories3. Key Performance Categories

Baseline

• Customer Customer • Products and ServicesProducts and Services• FinancialFinancial• Human CapitalHuman Capital• OperationalOperational• External (Regulatory Compliance, SocialExternal (Regulatory Compliance, Social Responsibility, . . . )Responsibility, . . . )


Gap AnalysisGap Analysis Baseline

Baseline / Org ProfileChallenges / SWOT

Benchmark

Gap = Basis for Long-Term Strategic Plan

Gap = Basis for Long-Term Strategic Plan


Strategic thinking

ENVIRONMENT Key success factors

WHERE ARE WE NOW?

• Position • Relative

success VALUE

‘The Process’ RESOURCES Skills and capabilities

WHERE DO WE WANT TO REACH?

By when?

Plans and actions to

reach targets

1 matt h. evans, [email protected] assessing environments process and tools

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