Corporate Business Strategy Strategic Analysis Priyanka Darshana MBA
Corporate & Business Strategy Strategic Analysis Priyanka Darshana MBA, ACMA, CGMA, BB Marketing
External Appraisal
What do we analysis • MICRO Environment • MACRO Environment
MICRO Where do we compete ?
Who's your competitor?
Strategic Group Mapping A strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies DI High Lo w Hig h D 2
Burger Market analysis
Competitor perception map
Rivalry Element Level Favorable / Unfavorable Number of competitors High U Size Big & medium U Growth rate Slow U Differentiation High F Exit barriers Low F Industry against Revelry F
Five Industry Forces Force Status Favorable / Unfavorable Revelry Intensive U Threat of New Entry High U Buyer's Power High U Supplier’s Power Low F Substitutes Many U Overall Industry Attractiveness U
PESTEL / MACRO Analysis Organization
Political Factors How government policy and actions intervene in the economy and other factors that can affect a business. These include the following: • • Tax Policy Trade Restrictions Tariffs Bureaucracy Different political parties in a country have diverging views and strategies for policy on the items above.
Economic Factors take into account the various aspects of the economy, and how the outlook on each area could impact your business. These economic indicators are usually measured and reported by Central Banks and other Government Agencies. • • • Economic Growth Rates Interest Rates Exchange Rates Inflation Unemployment Rates The Economic outlook is of extreme importance for a business.
Social Factors Which are related to the cultural and demographic trends of society. Social norms and pressures are key to determining a society consumerist behavior. Factors to be considered are the following: • • • Cultural Aspects & Perceptions Health Consciousness Populations Growth Rates Age Distribution Career Attitudes
Technological Factors are linked to innovation in the industry, as well as innovation of the overall economy. Not being up to date to the latest trends of a particular industry can be extremely harmful to operations. Technological Factors include the following: • • R&D – Activity Automation Technological Incentives The Rate of change in technology
Environmental Factors Ecological impacts on business. As weather extremes become more common, businesses need to plan how to adapt to these changes. Key Environmental Factors include the following: • • • Weather Conditions Temperature Climate Change Pollution Natural disasters (tsunami, tornadoes, corona etc. ) Additionally, there is increasing importance for businesses to be environmentally friendly with their operations, as evidenced by the rise Corporate Sustainability Responsibility (CSR) initiatives. Examples of CSR initiatives include carbon footprint reduction efforts and transitions into renewable material and energy sources.
Legal Factors There is often uncertainty regarding the difference between Political and Legal Factors in the context of a PESTEL analysis. Legal Factors pertain to any legal forces that define what a business can or cannot do. Political Factors involve the relationship between business and the government. Political and Legal Factors can intercept when governmental bodies introduce legislature and policies that affect how businesses operate. Legal factors include the following: • • Industry Regulation Licenses & Permits Labor Laws Intellectual Property
Opportunities and threats Combined, these six factors have a profound impact on the opportunities and threats for a business going forward
Scenarios are detailed and plausible views of how the environment of an organisation might develop in the future based on key drivers of change about which there is a high level of uncertainty. Build on PESTEL analysis. Do not offer a single forecast of how the environment will change. An organisation should develop a few alternative scenarios (2– 4) to analyse future strategic options.
Carrying out scenario analysis Identify the most relevant scope of the study – the relevant product/market and time span. Identify key drivers of change – PESTEL factors that have the most impact in the future but have uncertain outcomes. Develop scenario ‘stories’ - That is, coherent and plausible descriptions of the environment that result from opposing outcomes Identify the impact of each scenario on the organisation and evaluate future strategies in the light of the anticipated scenarios.
Strategic Analysis Internal Appraisal Organisational capability profile (OCP) External Appraisal Environmental threat and opportunities profile (ETOP) • Resources • Where to Compete • Capabilities • Industry position • Competitive advantages Strengths/weaknesses • PEST/PESTEEL factors Opportunities/threats SWOT Analysis
SWOT
- Slides: 28