STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITIONTHOMAS L. WHEELEN J. DAVID HUNGERCHAPTER 4 Environmental Scanning and Industry Analysis
Environmental ScanningSocietal environment --
Economic forcesTechnological forcesPolitical-legal forcesSociocultural forces
Societal EnvironmentEconomic Forces --
Regulate exchange of materials, money, energy and information
Societal EnvironmentTechnological Forces --
Generate problem-solving inventions
Societal EnvironmentPolitical-legal Forces --
Allocate power; provide laws and regulations
Societal EnvironmentSociocultural Forces --
Regulate values, mores, and customs of society
Task EnvironmentTask environment --
Elements or groups that directly affect a corporation and are affected by it
Task EnvironmentIndustry Analysis --
In-depth examination of key factors within a corporations task environment
Variables in Societal Environment
Demographic Trends
Transformational Sociocultural Trends8 Current Trends
Increasing environmental awarenessGrowing health consciousnessExpanding seniors marketImpact of the Generation Y boomletDeclining mass marketChanging pace and location of lifeChanging household compositionIncreasing diversity of workforce & market
International Societal Environments
Scanning the Task Environment
Ethical Behaviorbusiness ethics
Argument that there is no such thing it is an oxymoron
Ethical Decision MakingCorporate practices --
Massive write-downs and restatements of profitMisclassification of expenses as capital expendituresPirating corporate assets for personal gain
External Strategic FactorsStrategic myopia --
Willingness to reject unfamiliar as well as negative information
Issues Priority Matrix
Analyzing the Task Environment
Porters Approach to Industry AnalysisThreat of New Entrants
Economies of scaleProduct differentiationCapital requirementsSwitching costsAccess to distribution channelsCost disadvantagesGovernment policy
Porters Approach to Industry AnalysisRivalry Among Existing Firms
Number of competitorsRate of industry growthProduct or service characteristicsAmount of fixed costsCapacityHeight of exit barriersDiversity of rivals
Porters Approach to Industry AnalysisThreat of Substitute Products or Services
Bargaining Power of Buyers
Bargaining Power of Suppliers
Relative Power of Other Stakeholders
Industry EvolutionFragmented Industry
No dominant industry
Industry EvolutionConsolidated Industry
Dominated by a few large firms
International Risk AssessmentContinuum of International Industries
Strategic Groups
Strategic TypesDefendersProspectorsAnalyzersReactors
General Types
Competitive IntelligenceCalled business intelligence
Gathering information on a companys competitors
ForecastingForecasting Techniques --
ExtrapolationBrainstormingExpert opinionDelphi techniqueStatistical modelingScenario writing
Synthesis of External Factors -- EFAS
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