Lecture 4 Sep, 2015 MST551: Strategic Position-Environment
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Lecture 4
Sep, 2015
MST551: Strategic Position-Environment
Layers of the Business Environment
The Environment• Macro-environmentPESTEL
Porter’s Diamond Model of National Advantage
Key drivers of change-Strategic Scenarios
• Industry (Sources of competition)5-forces
• Understanding competition (SWOT/BCG/GE/PLC)Strategic group analysis
Market segments
Critical success factors
• Strategic gapsOpportunities
Threats
Understanding the Environment
•Diversity
–Many different influences
•Complexity
–Interconnected influences
•Speed of change
–Particularly ICT
The Environment – PESTEL
Political
• Government
stability
• Taxation policy
• Foreign trade regulations
• Social welfare policies
Economic
• Business cycles
• GNP trends
• Interest rates
• Money supply
• Inflation
• Unemployment
• Disposable income
The Environment – PESTEL
Sociocultural
• Population
demographics
• Income distribution
• Social mobility
• Lifestyle changes
• Attitudes to work and leisure
• Consumerism
• Levels of education
Technological
• Government spending on
research
• Government and industry
focus on technological
effort
• New discoveries/patents/
/inventions/developments
• Speed of technology
transfer
• Rates of obsolescence
The Environment – PESTEL
Environmental
• Environmental
protection laws
• Waste disposal
• Energy consumption
• Ecology protection
Legal
• Competition law
• Employment law
• Health and
safety
• Product safety
The Environment – PESTEL
Key Aspects of PESTEL Analysis
Not just a list of influences
Need to understand key drivers of change
Drivers of change have differential impact
on industries, markets, and organisations
Focus is on future impact of environmental
factors
Combined effect of some of the factors
likely to be most important
Macroeconomic Environment…
•Key drivers of change are environmental
factors that are likely to have a high impact on the
success or failure of strategy
•Scenarios are detailed and plausible views of
how the business environment of an organisation
might develop in the future based on key drivers
for change about which there is a high level of
uncertainty. Two scenarios:
– Low Growth and High Instability
– High Growth and Low Instability
SWOT Analysis
SWOTT Analysis
Strengths Opportunities
Weaknesses Threats
Trends
Thank you
Dr. Narinder VermaSchool of Business Management & Liberal ArtsShoolini UniversityVillage Bajhol, Solan (H.P)
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