2078.strategic mgt.(environmental appraisal)
Post on 26-Dec-2014
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ENVIRONMENTAL APPRAISAL
Presentation By:
Ditty GargLecturer, MBA Department
Presented by Ditty Garg
Business Environment/ Environment
Environment refers to those aspects of the surroundings of
business enterprise which affect or influence its operations
and determine its effectiveness. The environment of business
is always changing and it is uncertain. It is complex and
dynamic. Environment carries with it both opportunities and
risks or threats which can make or mark the future of
business.
Presented by Ditty Garg
Internal & External Environment
Internal Environment
• Strength• Weakness
External Environment
• Opportunity• Threat
Presented by Ditty Garg
Internal Factors
Vision Mission Goals & Objectives Human Resources Company Image R&D Financial Factors Marketing Practices
Presented by Ditty Garg
External Business Environmental
Micro Environment Macro Environment
External Factors
Presented by Ditty Garg
Micro Environment
Suppliers
Customers
Labor
Business Associates
Competitors
Marketing Intermediaries
Presented by Ditty Garg
Macro Environment
Economic Environment: Economic conditions, economic system,
economic policies such as budget, industrial regulations, economic
planning, import & export regulations, control on price and wages,
economic growth, currency exchange rates.
Political & Government Environment: Legislature, Executive,
Judiciary.
Socio-Cultural Environment
Demographical Environment: Population size, growth rate, age
composition, family size, educational levels, language, caste, religion.
Presented by Ditty Garg
Natural Environment: Natural Resources, weather & climatic
conditions, location aspects in global context etc.
Technological Environment
International Environment
Presented by Ditty Garg
Environmental Scanning
Environmental scanning means to carefully analyze the various factors
influencing the business. Environmental scanning/ analysis is the process
by which strategists monitor the environmental factors to determine
opportunities for and threats to their firms. Environment analysis also
consists of managerial decisions made by assessing the significance of
the data thus gathered.
Presented by Ditty Garg
Need of Environmental Scanning
Effective Utilisation of Resources
Constant Monitoring of the Environment
Strategy Formulation
Identification of Threats & Opportunities
Useful for the Managers
Prediction of Future
Presented by Ditty Garg
Environmental Scanning Techniques
ETOP Analysis
QUEST Analysis
SWOT Analysis
TOWS Matrix
PEST Analysis
Presented by Ditty Garg
ETOP ( Environmental Threat and Opportunity Profile)
1. The first step involves dividing the environment into different factors.
2. Analysing the impact of each factor on the organisation.
3. Sub-dividing each environmental factor into sub-factors for a
comprehensive ETOP.
4. Analysing the impact of each sub-factor on the organisation in the form
of a statement.
5. Preparing a summary to show the major factors for the sake of
simplicity.
Presented by Ditty Garg
QUEST (Quick Environmental Scanning Technique)
1. Strategists make observations about the major events and trends in their
industry.
2. Then they speculate on a wide range of important issues that might affect
the future of their organisations by scanning the environment broadly and
comprehensively.
3. The QUEST director prepares a report summarising the major issues and
their implications and 3-5 scenarios incorporating the major themes of the
discussion.
4. The report and scenarios are reviewed by a group of strategists who identify
feasible strategic options to deal with the evolving environment. The
options are ranked and teams are designated to develop strategies.
Presented by Ditty Garg
SWOT Analysis(Strength, Weakness, Opportunity & Threats Analysis)
Identify the Strengths of, Weakness of, Opportunities for and
Threats to the organisation by appraising internal & external
environment.
Strengthen the Strengths
Remove the Weakness
Harness the Opportunities
Tackle and combat the Threats
Presented by Ditty Garg
TOWS Matrix
SO Strategy: Maxi-Maxi
WO Strategy:
Mini-Maxi
ST Strategy: Maxi-Mini
WT Strategy: Mini-Mini
Strengths (S) Weaknesses (W)
Opportunities (O)
Threats (T)
Presented by Ditty Garg
PEST Analysis( Political, Economic, Social & Technological Analysis)
It involves scanning of external political, economic, social
and technological environmental analysis.
Some analysts added Legal analysis and re-arranged to
SLEPT.
Inserting Environmental factors expanded to PESTEL
Further, adding Education and Demographic factors
extended it to STEEPLED
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