Strategic Mgmt - Session 2 - Environment Scanning.pdf

8/11/2019 Strategic Mgmt - Session 2 - Environment Scanning.pdf

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STRATEGIC MANAGEMENT

Lng Thu HLng Thu H

Lng Thu H, MBA, PhD Candidate

[email protected] 0903.001.888


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Lng Thu HLng Thu H

ENVIRONMENTAL SCANNING

UNIT 2

2


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CONTENT

2.1. Business environment analysis

2.2. External environment scanning (Presentation)

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2.3. Internal environment scanning (Presentation)

2.4. SWOT matrix

2.5. Business strategy in global context

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1.1. BUSINESS ENVIRONMENT

ANALYSIS

Macro Environment

Industry Environment

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The Organization


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The Strategic-Management model

Measure

Implement

Strategy MarketinImplementGenerateDevelop

Perform

External

Audit

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and

Evaluate

Performance

Finance,

Accounting,

R&D,

and

MIS Issue

Management

Issue

and

Select

Strategy

and

Mision

Statements

Long-term

Objectives

PerformInternal

Audit

Strategy

Fomulation

Strategy

Implementation

Strategy

Evaluation


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Analysis tools

The organization: Different approaches

Strategic group: MBA programe

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Industry environment: Five Forces Model

Macro environment: PESTEL Analysis

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1.2. EXTERNAL ENVIRONMENT

SCANNING

Level of external environment:

Macro environment (National environment)

Micro environment (Industry environment)

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Macro environment: PESTEL Analysis

Industry environemnt: Five Forces Model(Competitive analysis)

=> Os and Ts of SWOT7


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1.2.1. Political factors

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1.2.3. Social factors

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1.2.4. Technological factors

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1.2.5. Environmental factors

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1.2.6. Legal factors

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INDUSTRY ENVIRONMENT

Five Forces Model:

Rivalry among competing firms

Potential entry of new competitors

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Potential development of substitute products

Bargaining power of suppliers

Bargaining power of consumers

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Five Forces Model M.Porter

Threat of New Entrants (and Entry Barriers)

Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation

Proprietary products

Industry value chain

from raw materials

and other inputs, to

channel, to end

consumer

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Source: Adapted from M.E. Porter, Competitive

Strategy: Techniques for Analyzing

Industries and Competitors , (New York: Free

Press, 1980)

Buyer Power (Channel and End Consumer)

Buyer concentration Importance of volume to customers Differentiation of inputs Impact of outputs on cost of differentiation Switching costs of customers Presence of substitute products Threat of backward integration

Costs relative to total purchases inindustry

Supplier Power

Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration

Cost relative to total purchases in industry

Threat of Substitutes

Switching costs Buyer inclination to substitute Price-performance tradeoff of substitutes Varity of substitutes Necessity of product or service

Degree of Rivalry

Exit barriers Industry concentration Fixed costs/value added Industry growth Intermittent overcapacity Product differences Switching costs

Brand identity Diversity of rivals


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Degree of Rivalry


Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products


from raw

materials and other

inputs, to channel,

to end consumer

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Strategy: Techniques for Analyzing Industries

and Competitors , (New York: Free Press, 1980)


Buyer concentration Importance of volume to customers Differentiation of inputs Impact of outputs on cost of differentiation Switching costs of customers Presence of substitute products Threat of backward integration Costs relative to total purchases in industry

Supplier Power

Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry


Switching costs

Buyer inclination to substitute Price-performance tradeoff of substitutes Varity of substitutes Necessity of product or service

Degree of Rivalry

Exit barriers Industry concentration Fixed costs/value added Industry growth Intermittent overcapacity

Product differences Switching costs Brand identity Diversity of rivals


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Supplier Power

Supplier Power




from raw

materials and other

inputs, to channel,

to end consumer

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Source: Adapted from M.E. Porter,

Competitive Strategy:

Techniques for Analyzing

Industries and Competitors ,

(New York: Free Press, 1980)


Buyer concentration

Importance of volume to customers Differentiation of inputs Impact of outputs on cost of diff-tion

Switching costs of customers Presence of substitute products Threat of backward integration

Costs relative to total purchases in industry

Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or diff-tion Switching costs of firms in the industry Presence of substitute inputs

Threat of forward integration Cost relative to total purchases in

industry


Switching costs Buyer inclination to substitute Price-performance tradeoff of

substitutes

Varity of substitutes Necessity of product or service

Degree of Rivalry

Exit barriers Industry concentration

Fixed costs/value added Industry growth

Intermittent overcapacity

Product differences

Switching costs Brand identity

Diversity of rivals Corporate stakes


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Threat of New Entrants


Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale

Capital requirements

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Strategy: Techniques for Analyzing Industries

and Competitors , (New York: Free Press, 1980)


Buyer concentration Importance of volume to customers Differentiation of inputs Impact of outputs on cost of differentiation Switching costs of customers Presence of substitute products Threat of backward integration Costs relative to total purchases in industry

Supplier Power

Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry

Switching costs Access to distribution Expected retaliation Proprietary products



substitutes


Degree of Rivalry

Exit barriers Industry concentration Fixed costs/value added Industry growth

Intermittent overcapacity

Product differences

Switching costs Brand identity

Diversity of rivals


from raw

materials and other

inputs, to channel,

to end consumer


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Threats of Substitutes


Buyer concentration

Supplier Power

Supplier concentration



Degree of Rivalry Exit barriers


from raw

materials and other

inputs, to channel,to end consumer

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Strategy: Techniques for Analyzing

Industries and Competitors , (New York:Free Press, 1980)

Importance of volume to customers Differentiation of inputs Impact of outputs on cost of differentiation Switching costs of customers Presence of substitute products Threat of backward integration Costs relative to total purchases in industry

Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry



substitutes


Industry concentration

Fixed costs/value added

Industry growth Intermittent overcapacity

Product differences Switching costs Brand identity

Diversity of rivals


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Os-Ts of SWOT Matrix

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Os : List the firms key external Opportunities.

Ts : List the firms key external Threats. 22

2 3 INTERNAL ENVIRONMENT


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2.3. INTERNAL ENVIRONMENT

SCANNING

Management-function approach

Management-area approach

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Resource-based approach

Value chain approach

=> Ss and Ws of SWOT

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2.3.1 Management-function approach

Abillity of Planning

Ability of Organizing

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Ability of Directing

Ability of Co-ordinating

Ability of Controlling

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2.3.2. Management-area approach

Materials management

Finace management

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Marketing mangement

Personnel management

MIS management

Official and legal

issues management

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2.3.3. Resources-based approach

Human resource

Finance resource

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Tangible-property resource

Information resource

Intellectual-property resource

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Primary activities

Inbound logistics (receiving, warehousing, and inventory):

Control of input materials.

Operations (machining, assembling, and all other activities):

transform inputs into the final product.

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activities): required to get the finished product to the customer

Marketing and sales (channel selection, advertising, pricing,

and other activities): associated with getting buyers to

purchase the product.

Service (customer support, repair services, and other

activities): maintain and enhance the products value to the

customer.

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Ss-Ws of SWOT Matrix

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Os : List the firms key internal Strengths.

Ts : List the firms key internal Weakness.


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2.4. SWOT MATRIX


STRENGTHS S

STRENGTHS S WEAKNESSES W

WEAKNESSES W


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THE SWOT MATRIX

FOR

A CRUISE LINE COMPANY

THE SWOT MATRIX

FOR

A CRUISE LINE COMPANY

1. Hold 34% market share

2. Largest fleet of ships

3. Six different cruise lines

4. Innovator in cruise travel industry

5. Largest variety of ships

6. Building largest cruise ship7. High brand recognition

8. Headquatered in Tampa

9. Internet friendly (online booking 30%)

1. Hold 34% market share

2. Largest fleet of ships

3. Six different cruise lines

4. Innovator in cruise travel industry

5. Largest variety of ships

6. Building largest cruise ship7. High brand recognition

8. Headquatered in Tampa

9. Internet friendly (online booking 30%)

1. Major loss in affiliated

operation

2. Increased debt from

building new ships

3. Not serving Asian

market

4. ROI ratio is 4%

1. Major loss in affiliated

operation

2. Increased debt from

building new ships

3. Not serving Asian

market

4. ROI ratio is 4%

OPPOTUNITIES O

1. Air travel has decreased (9/11)

2. Asian market not being served

3. Possible accquisition of Princess Cruise

OPPOTUNITIES O

1. Air travel has decreased (9/11)

2. Asian market not being served

3. Possible accquisition of Princess Cruise

SO STRATEGIES

1. Increase capacity of ships to obtain

travelers from air industry (S6, O1, O3)

SO STRATEGIES

1. Increase capacity of ships to obtain

travelers from air industry (S6, O1, O3)

WO STRATEGIES

1. Begin serving Japan and

Pacific Islands (W3, O2,

WO STRATEGIES

1. Begin serving Japan and

Pacific Islands (W3, O2,


Lines

4. New weather forecast systerm available

5. Rising demand for all-inclusive vacation

packages

6. Families have increased disposal incomes

7. Marriarate are ups=> more honeymoon

Lines

4. New weather forecast systerm available

5. Rising demand for all-inclusive vacation

packages

6. Families have increased disposal incomes

7. Marriarate are ups=> more honeymoon

2. Display the weather of vacation

locations on Web site (S9, O4)

3. Offer Trans Atlantic Cruises (S6, O4)

4. Acquire P&O Princess (S1, O3)

2. Display the weather of vacation

locations on Web site (S9, O4)

3. Offer Trans Atlantic Cruises (S6, O4)

4. Acquire P&O Princess (S1, O3)

O3, O4)

2. Use weather forcast to

alert customers of

potential storm during

their vacation (W1, O4)

O3, O4)

2. Use weather forcast to

alert customers of

potential storm during

their vacation (W1, O4)

THREATS T

1. Decreased in travel since 9/11

2. Terrorism

3. Competition within industry

4. Competition among other types of vacations

5. Economics recression

6. Chance of natural disasters

7. Increase fuel prices

8. Changing goveronment regulations

THREATS T

1. Decreased in travel since 9/11

2. Terrorism

3. Competition within industry

4. Competition among other types of vacations

5. Economics recression

6. Chance of natural disasters

7. Increase fuel prices

8. Changing goveronment regulations

ST STRATEGIES

1. Advertise ship variety, brand

recognition, and safety policies (S3,

S7, T1, T2, T5)

2. Advertise alternate vacations that

are not affected by hurricane season

(S3, T5, T7)

3. Offer discounts on Web site (S9, T6)

ST STRATEGIES

1. Advertise ship variety, brand

recognition, and safety policies (S3,

S7, T1, T2, T5)

2. Advertise alternate vacations that

are not affected by hurricane season

(S3, T5, T7)

3. Offer discounts on Web site (S9, T6)

WT STRATEGIES

1. Lower prices of cruises

during hurricane season

(W1, T6)

2. Research viability of

entering other foreign

markets (W2, W3, T8, S9)

WT STRATEGIES

1. Lower prices of cruises

during hurricane season

(W1, T6)

2. Research viability of

entering other foreign

markets (W2, W3, T8, S9)

2.5. BUSINESS STRATEGY IN


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2.5. BUSINESS STRATEGY IN

GLOBAL CONTEXT

Multinational Corporation (MNCs)

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Globalization

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B f i i i l k


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Before entering international market

Journal and patent reports

Advices from academic and research organizations

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Form partnerships

Conduct extensive researchs

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Gl b li ti


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Globalization

Process of worldwide intergration

Domestic, other individual contries, and global:

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Profitability of a firm

Industries: Different level of globalization R&D needs

Low-cost manufacturing

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Strategic Mgmt - Session 2 - Environment Scanning.pdf