18925868 Dbd8dcap Etop Model

8/9/2019 18925868 Dbd8dcap Etop Model

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Amity Business School

1

Amity Business SchoolMBA Class of 2010, Semester II

BESA


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Environmental analysis comprises scanning, monitoring,analyzing, and

forecasting the business situation. Scanning is to get therelevant information

from the information overload. It is to focus on the mostrelevant information.

Monitoring is to check the nature of the environmentalfactors. Analyzing

requires data collection and use of different required toolsand techniques.

Forecasting is to find the future possibilities based on thepast results and

present scenario.


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Amity Business SchoolDesigning Profiles

After analyzing the environmental factors they arerecorded into the profiles.

Such profiles record each component or variables intoleft side and their

positive, negative, or neutral indicators including theirstatement in the right side. Internal areas are recordedin Strategic Advantages Profile (SAP) and externalareas are recorded in Environmental Threat andOpportunity Profile

(ETOP). Strength, Weakness, Opportunity, and Threat(SWOT) profile can be designed combining both ofthese two profiles into one.


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Amity Business SchoolPreparing ETOP

Environmental threat and opportunity profile isreferred as ETOP profile. It identifies the relevantenvironmental factors. Such factors might begeneral environmental factors and task environment

factors. Thereafter, it is necessary to identify theirnature. Some factors are positive to the organizationwhereas others are negative. Therefore, it isnecessary to find out their impact to the

organization. Positive, neutral, and negative sign inETOP denotes the relevant impact of environmentalfactors.


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Amity Business SchoolPreparing SAP

/ CAP (Competitive Advantage Profile)

Strategic advantage profile is known as SAP. It showsstrength and weakness of an organization. Preparation ofSAP is very similar process to the ETOP.

There are generally five functional areas in most of theorganizations. These areas are Production or Operation,

Finance or Accounting, Marketing or Distribution, HumanResource & Corporate Planning, and Research &Development. These functional areas are listed to identifytheir relative strength and weakness in SAP. Very similar tothe ETOP, positive, neutral,and negative signs are denotedand brief description is written in SAP profile.

Each functional area is very broad having manycomponents inside.


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Amity Business SchoolSWOT Analysis

Internal Environment

Strengths

Weaknesses

External Environment

Opportunities

Threats


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Amity Business SchoolCriticisms of SWOT

Analysis it generates lengthy lists. it uses no weights to reflect priorities.

it uses ambiguous words and phrases.

the same factor can be placed in two categories

(e.g., a strength may also be a weakness).

there is no obligation to verify opinions with data

or analysis. it only requires a single level of analysis.

there is no logical link to strategy implementation.


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External Factor Analysis Summary

(EFAS)External FactorsWeight Rating

Weighted

Score Comments

1 2 3 4 5

1.00

Opportunities

Threats

Total Weighted Score

Notes: 1. List opportunities and threats (510 each) in column 1. 2. Weight each factor from 1.0 (Most Important) to 0.0 (NotImportant) in Column 2 based on that factors probable impact on the companys strategic position. The total weights must sum to1.00. 3. Rate each factor from 5 (Outstanding) to 1 (Poor) in Column 3 based on the companys response to that factor. 4. Multiplyeach factors weight times its rating to obtain each factors weighted score in Column 4. 5. Use Column 5 (comments) for rationaleused for each factor. 6. Add the weighted scores to obtain the total weighted score for the company in Column 4. This tells howwell the company is responding to the strategic factors in its external environment. A weighted score of 3.0 means averageperformance.

Source: T. L. Wheelen and J. D. Hunger, External Strategic Factors Analysis Summary (EFAS). Copyright 1991 by Wheelen andHunger Associates. Reprinted by permission.


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Amity Business SchoolExternal Factor Analysis Summary

(EFAS): Maytag as ExampleExternal Factors

Weight Rating

Weighted

Score Comments

1.00

Opportunities

Economic integration of

European Community

Demographics favor qualityappliances

Economic development of Asia

Opening of Eastern Europe

Trend to Super Stores

Threats

Increasing government regulations

Strong U.S. competition

Whirlpool and Electrolux strong

globally

New product advances

Japanese appliance companies

Total Scores

.20

.10

.05

.05

.10

.10

.10

.15

.05

.10

4

5

1

2

2

4

4

3

1

2

.80

.50

.05

.10

.20

.40

.40

.45

.05

.20

Acquisition of

Hoover

Maytag quality

Low Maytag presence

Will take time

Maytag weak in this

channel

Well positioned

Well positioned

Hoover weak globally

Questionable

Only Asian presence is

Australia

3.15

1 2 3 4 5


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Internal Factor Analysis Summary

(IFAS)Internal Factors Weight Rating

Weighted

Score Comments

1 2 3 4 5

1.00

Strengths

Weaknesses


Notes: 1. List opportunities and threats (510 each) in column 1. 2. Weight each factor from 1.0 (Most Important) to 0.0 (NotImportant) in Column 2 based on that factors probable impact on the companys strategic position. The total weights must sum to1.00. 3. Rate each factor from 5 (Outstanding) to 1 (Poor) in Column 3 based on the companys response to that factor. 4. Multiplyeach factors weight times its rating to obtain each factors weighted score in Column 4. 5. Use Column 5 (comments) for rationaleused for each factor. 6. Add the weighted scores to obtain the total weighted score for the company in Column 4. This tells howwell the company is responding to the strategic factors in its external environment A weighted score of 3.0 means averageperformance..

Source: T. L. Wheelen and J. D. Hunger, External Strategic Factors Analysis Summary (EFAS). Copyright 1991 by Wheelen andHunger Associates. Reprinted by permission.


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Amity Business SchoolInternal Factor Analysis Summary

(IFAS):Maytag as ExampleInternal Factors Weight Rating WeightedScore Comments

1 2 3 4 5

1.00

Strengths

Quality Maytag culture

Experienced top management

Vertical integration

Employee relations

Hoovers international orientation

Weaknesses

Process-oriented R&D

Distribution channels

Financial position

Global positioning

Manufacturing facilities


Quality key to success

Know appliances

Dedicated factories

Good, but deteriorating

Hoover name in cleaners

Slow on new products

Superstores replacing

small dealers

High debt load

Hoover weak outside the

United Kingdom and

Australia

Investing now

3.05

.15

.05

.10

.05

.15

.05

.05

.15

.20

.05

5

4

4

3

3

2

2

2

2

4

.75

.20

.40

.15

.45

.10

.10

.30

.40

.20


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51 2 3 4

Strategic Factor Analysis Summary

(SFAS)Strategic Factors(Select the most important

opportunities/threats from EFAS, Table 3.4

and the most important strengths and

weaknesses from IFAS, Table 4.2)

Total Score

Weight Rating

Weighted

Score Comments

Notes: 1. List each of the factors developed in your IFAS and EFAS tables in Column 1. 2. Weight each factor from 1.0 (MostImportant) to 0.0 (Not Important) in Column 2 based on that factors probable impact on the companys strategic position. The totalweights must sum to 1.00. 3. Rate each factor from 5 (Outstanding) to 1 (Poor) in Column 3 based on the companys response tothat factor. 4. Multiply each factors weight times its rating to obtain each factors weighted score in Column 4. 5. For duration inColumn 5, check appropriate column (short termless than 1 year; intermediate1 to 3 years; long termover 3 years.) 6. UseColumn 6 (comments) for rationale used for each factor. A weighted score of 3.0 means average performance.Source: T. L. Wheelen and J. D. Hunger, Strategic Factors Analysis Summary (SFAS). Copyright 1997 by Wheelen and Hunger

Associates. Reprinted by permission.

S H O R T

I N T E R M E D I A T

E

L O N G

Duration 6


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Strategic Factors

(Select the most important

opportunities/threats from EFAS, Table 3.4

and the most important strengths and

weaknesses from IFAS, Table 4.2)

S1 Quality Maytag culture (S)

S3 Hoovers international orientation (S)

W3 Financial position (W)W4 Global positioning (W)

O1 Economic integration of

European Community (O)

O2 Demographics favor quality (O)

O5 Trend to super stores (O + T)

T3 Whirlpool and Electrolux (T)

T5 Japanese appliance companies (T)

Total Score

Weight Rating

Weighted

Score Comments

1.00

Notes: 1. List each of the factors developed in your IFAS and EFAS tables in Column 1. 2. Weight each factor from 1.0 (MostImportant) to 0.0 (Not Important) in Column 2 based on that factors probable impact on the companys strategic position. The totalweights must sum to 1.00. 3. Rate each factor from 5 (Outstanding) to 1 (Poor) in Column 3 based on the companys response tothat factor. 4. Multiply each factors weight times its rating to obtain each factors weighted score in Column 4. 5. For duration inColumn 5, check appropriate column (short termless than 1 year; intermediate1 to 3 years; long termover 3 years.) 6. UseColumn 6 (comments) for rationale used for each factor. A weighted score of 3.0 means average performance.Source: T. L. Wheelen and J. D. Hunger, Strategic Factors Analysis Summary (SFAS). Copyright 1997 by Wheelen and Hunger

Associates. Reprinted by permission.

S H O R T

I N T E R M E D I A T

E

L O N G

Duration

3.05

.10

.10

.10

.15

.10

.10

.10

.15

.10

Quality key to success

Name recognition

High debtOnly in N.A., U.K., and Australia

Acquisition of Hoover

Maytag quality

Weak in this channel

Dominate industry

Asian presence

5

3

22

4

5

2

3

2

.50

.30

.20

.30

.40

.50

.20

.45

.20

Strategic Factor Analysis Summary (SFAS):

Maytag as Example

X

X

X

X

X

X

X

X

X


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TOWS Matrix

SO Strategies

ST Strategies

WO Strategies

WT Strategies

INTERNALFACTORS

(IFAS)EXTERNALFACTORS(EFAS)

Strengths (S)

Weaknesses (W)

Opportunities (O)

Threats (T)

Source: Adapted from Long-Range Planning, April 1982, H. Weihrich, The TOWS MatrixA Tool forSituational Analysis p. 60. Copyright 1982, with kind permission from H. Weihrich and Elsevier Science Ltd.

The Boulevard, Langford Lane, Kidlington OX5 1GB, UK.


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SO StrategiesGenerate strategies herethat use strengths to takeadvantage of opportunities

ST Strategies

Generate strategies herethat use strengths toavoid threats

WO StrategiesGenerate strategies herethat take advantage ofopportunities byovercoming weaknesses

WT Strategies

Generate strategies herethat minimize weaknessesand avoid threats

INTERNALFACTORS

(IFAS)EXTERNALFACTORS(EFAS)

Strengths (S)List 5 10 internalstrengths here

Weaknesses (W)List 5 10 internalweaknesses here

Opportunities (O)List 5 10 externalopportunities here

Threats (T)

List 5 10 externalthreats here

TOWS Matrix

Source: Adapted from Long-Range Planning, April 1982, H. Weihrich, The TOWS MatrixA Tool forSituational Analysis p. 60. Copyright 1982, with kind permission from H. Weihrich and Elsevier Science Ltd.

The Boulevard, Langford Lane, Kidlington OX5 1GB, UK.

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18925868 Dbd8dcap Etop Model