environmental
TRANSCRIPT
SUBMITTED BY:DEEPTI SINGH 09EM-011
GEETIKA TIWARI 09EM-014VINEETA CHAUDHARY 09EM-044
ENVIRONMENTALAPPRAISAL
Concept of Environment
1. The Environment is defined as the aggregate of conditions, events,
and influences that affect an organizations way of doing things.
2. Environmental factors can be external as well as internal to the
organization.
3. Environment factors are beyond the control of individual industrial
enterprise & their managements.
4. Environmental scanning is very important component of strategic
planning. A manager has to continuously scan the environment to
ensure alignment of the strategies with the radically changing
environment.
Characteristics Of Environment
1. Environment is complex
2. Environment is dynamic
3. Environment is multi faced.
4. Environment has a far – reaching impact.
External & Internal Environment
The External environment includes all factors
outside, the control of organization which provide
opportunities or pose threats to the organization.
The Internal Environment provides strength or
weakness within the control of organization.
Components of External Environment
Organization
Supplier
Competition
Economy
Technology Govt. Regulations
Religion
Community
Society
Political
Interest/ Pressure groupsCustomers
Methods & Techniques used for Environment Appraisal
PESTEL
Porter’s five forces model
Porter’s diamond model
ETOP
PESTEL FRAMEWORK
Political – Government Stability, Government Attitude, Economic Model, Central – State Co-alignment, Subsidies & Protection, Licensing & Quotas.
Economic – GDP, Fiscal Deficit, Savings & Investment, Inflation & Interest Rates, Monsoon & Food Grains Reserves, Economic Cycles, Capital Market & Forex Reserves, Currency Stability, Infra-Structural Investments, FDI Inflows.
Social – Population Diversity, Religious Sentiments, Literacy Levels, Income & Age Distribution, Language Barriers, Social Values.
PESTEL FRAMEWORK
Technological – Innovation, Obsolescence Rate, Patents, Research & Development, ERP, Technological Convergence.
Environmental – Global Warming & CSR, Product Design, Environmentally Preferable Purchasing, Extended Producer Responsibility, Waste Disposal & Emissions, Non-Fossil & Alternative Fuels, Carbon Credits, Pollution Control Laws.
Legal – Monopolies Legislation, Employment Laws, Product Safety & Health Hazards, Direct & Indirect Taxes, Patent Laws, Consumer Protection Laws.
FIVE FORCES MODEL - PORTER
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Threat of New Entrants
Threat of Substitutes
Bargaining power of Suppliers
Bargaining power of Suppliers
Bargaining power of Customers
Competition from Existing
Players
Competition from Existing Players
Cars dominate the passenger vehicle market by 79%. Maruti Suzuki has 52% share in passenger
In utility vehicles Mahindra holds 42% share.
In commercial vehicle, Tata Motors more than 60% share. Tata Motors is also the world's fifth largest medium & heavy commercial vehicle manufacturer.
With only a few firms holding a large market share, the market is less competitive (closer to a monopoly).
The industry is characterized by many rivals, none of which has a significant market share. These fragmented markets are said to be competitive. If rivalry among firms in an industry is low, the industry is considered to be disciplined
DIAMOND MODEL - PORTER
Environmental sectors
Opportunities and Threat
Social ↑ Indigenous Products,Low cost
Political ↑ Favours from Government in terms of Tax and Land.
Economic → Plant and machinery in excellent condition; captive sources for parts and components available.
Regulatory ↓ Low safety Standards
Market → Despite buying Jaguar and Land rover brands, TATA hasn’t got a foothold in its luxury car segment in Indian Market.Alliance with Fiat./Joint Ventures
Environmental Threat And Opportunity Profile (ETOP)TATA MOTORS
Environmental sectors
Opportunities and Threat
Supplier↓ Rising price of Aluminium ,Plastic and
Steel
Technology → Greener Alternative, Fuel Efficient Super Milo Buses, lack of expertise with respect to international market.
Environmental Threat And Opportunity Profile (ETOP)TATA MOTORS
ORGANISATIONAL APPRAISAL
Organizational appraisal is basically study of internal
environment of an organization.
The dynamics of internal environment of an organization
can be understood in terms of the organizational resources
& behavior, strength & weaknesses, synergistic effects and
the distinctive competencies.
Distinctive competence - Any advantage a company has over
its competitor - it can do something which they cannot or
can do better - opportunity for an organization to capitalize
- low cost, Superior Quality, R&D skills etc.
METHODS & TECHNIQUES USED FOR ORGANIZATIONAL APPRAISAL …
Financial Analysis - Ratio Analysis, ABCKey factor rating - Rating of different factors through different questionsValue chain analysisBCG, GE Matrix Competitive Advantage ProfileStrategic Advantage profile
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Strategic Advantage Profile (SAP)(BERGER PAINTS)
Capability factor Competitive strengths or weaknesses
Finance → Leader in profits and operating margin(ROI 40%),Net worth 204 Cr of the industry, Berger 41 Cr.Cash rich, Nerolac 58 Cr
Marketing → Market leader 35% share, brand since more than 20 yrs , widest product range
Operations ↑ Strong inventory controlstrong in inventory control (28 days) of sales (industry avg. 51 days, service level - high
Personnel → High caliber HR- MBAs more
General Management
↑ High profile corporate image, Enviable track record in breaking away the position of MNCs in the Indian paint Industry.
SWOT is a function of SAP & ETOP
Effectiveness of HR, Level of commitments, loyalties (all quantitative and qualitative) to compete with the rival firms within industry are counted as Strength.
Firm’s weaknesses are internal deficiencies in term of above. The deficiencies are regarded as organizational constraints and disadvantages to compete and fight with rival firms. When a firm analyzes its internal capabilities as stated above the process is known as SAP (Strategic Advantage Profile).
On the other hand , analysis of external environment to find out opportunities and threats are known as ETOP Analysis (Environmental Threats and Opportunities Profile).
Thus we can say SWOT is a function of SAP & ETOP.
ETOP
Opportunities
Threat
SWOT
SWOT ANALYSIS - FRAMEWORK
StrengthsWeaknesses
Op
port
un
itie
sT
hre
ats
Utilize strengths to counter threats
Minimize weaknesses whichprevents you from countering threats
Nullify weaknesses which prevents you from exploiting opportunities
Leverage strengths to make use of opportunities
SOURCES OF STRENGTHStrong brand identity – Eg. Tata.High quality products – Eg. Sony, Toyota,
Honda.Economies of scale – Eg. Reliance.Strong after sales & service network – Eg.
Caterpillar
Outdated technology – Eg. Hindustan Motors.Single product syndrome – Eg. Procter & Gamble.Narrow business scope – Eg. Nirma.Excessive diversification – Eg. Tatas
SOURCES OF WEAKNESSES
SOURCES OF OPPORTUNITIESDelicensing of Industries – Eg. Telecom,
Banking.Life style changes – Eg. Retailing.Growing population – Eg. Middle-class buying power.Collaborations & Joint Ventures – Bharti & WalMart
Terrorist attacks – Eg. 11/9, 26/11.Import relaxation – Eg. Dumping from China.Economic recession – Eg. (2008).Natural disaster – Eg. Tsunami, Earth Quake.Lack of Corporate Governance – Eg. Satyam.
SOURCES OF THREAT