Lesson Two Environmental scanning and STEEP Analysis Adapted

Lesson Two : Environmental scanning and STEEP Analysis Adapted from the Heriot Watt University ppt slides sl/bmbe/2016 1

D 39 BU – Business Management in the Built Environment Vision & mission Swot analysis STEEP & Scenarios Planning Planni feedback Strategic analysis & options decision making implementation Evaluation & monitoring sl/bmbe/2016 2

Business Management in the Built Environment A Model of Strategy Process The Built Environment Identifying Options Stakeholder Expectations Strategic Analysis Resource Capability Strategic Capability Strategy Implementation Strategic Choice Organisational Structure Selecting a Strategy sl/bmbe/2016 3

Business Management in the Built Environmental analysis MACRO ENVIRONMENT STEEP ANALYSIS SOCIAL Industry Environment POLITICAL Suppliers TECHNOLOGICAL Competitors ENVIRONMENTAL ECONOMICS Customers sl/bmbe/2016 Pg 4 unit 5 4

Business Management in the Built Environment Porter’s 5 Forces

Singapore Property Equation The Singapore Development Equation Government controlled URA Land Policies Land Owner-occupier Upgrading/downgrading Materials Private Land Banks Taxes Immigration and Trade Quotas Supply Private developers; existing land Primary market banks; URA/HDB land parcels Labour Investor Costs Speculator Equation Demand Price Foreign Buyers Existing private apartment owners selling their properties rental returns; capital gains new & good properties; short term hold for quick profits investments in other countries; may dispose of supply Affordability (to either upgrade or downgrade) new/existing properties; long term hold for properties in Singapore to other foreigners Singaporeans who have locked-up their funds in other overseas properties Secondary market supply Bank Loans Interest Rates HDB flat owners selling their HDB flats (upgraders) or private properties Government Fiscal Policies 6

Business Management in the Built Environment Auditing Environment Influences Strategic Analysis STEEP ANALYSIS POLITICAL SOCIAL TECHNOLOGICAL ECONOMICS ENVIRONMENTAL sl/bmbe/2016 (Also known as PEST Analysis) 5

Business Management in the Built Environmental analysis: The STEEP ANALYSIS SOCIAL values / demographics / life styles TECHNOLOGICAL new products / innovations / technological trends ENVIRONMENTAL ECONOMICS POLITICAL pressure groups / energy efficiency / resources recession / interest rates / inflation / tax election / policy / budget / legislation sl/bmbe/2016 6

Business Management in the Built Environment Auditing Environment Influences Strategic Analysis STEEP ANALYSIS When Should STEEP be used? Times of Uncertainty Times of Information Overload Times of Disorganization sl/bmbe/2016 7

Business Management in the Built Environment Auditing Environment Influences Strategic Analysis STEEP ANALYSIS 1. Comprehend the element of the environment 2. Assess interrelationships between trends 3. Relate trends to issues 4. Fo Forecast the future direction of issues 5. De Derive implications sl/bmbe/2016 8

Business Management in the Built Environment Auditing the Built Environment SOCIAL Affordable Housing Strategic Analysis POLITICAL PFI / PPP TECHNOLOGICAL ENVIRONMENTAL ECONOMICS Systems Building Waste Management Recession sl/bmbe/2016 9

Business Management in the Built Environment Auditing the Built Environment Affordable Housing Strategic Analysis Systems Building *PFI / PPP Recession Waste Management Note: * PFI = Private Finance Initiatives PPP = Public Private Partnerships sl/bmbe/2016 10

s; l/2015 Business Management in the Built Environment Resource & Strategic Capabilities Strategic Analysis SWOT ANALYSIS STRENGTHS WEAKNESSES THREATS OPPORTUNITIES sl/bmbe/2016 11

Business Management in the Built Environment Resource & Strategic Capabilities Internal Audit STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Positive Factors ((Potentially) Negative Factors Fa External Audit sl/bmbe/2016 12

Business Management in the Built Environment Resource & Strategic Capabilities STRENGTHS STAFF TURNOVER PROFIT GROWTH WEAKNESSES STAFF POOR MARKET LOW PROFIT INNOVATION OPPORTUNITIES DIVERSIFY ALLIANCES SKILLS FUNDING THREATS ECONOMY STAFF LEAVE TECHNOLOGY CASH FLOW SWOT Summary STEEP & SWOT Analysis / Interpretation sl/bmbe/2016 13

Business Management in the Built Environment STEEP & SWOT Analysis & Interpretation STEEP & SWOT Analysis / Interpretation Use in conjunction with other techniques Porter’s Five Forces Porter’s Generic Strategies Boston Consulting Group Matrix Diversification Analysis sl/bmbe/2016 14

Business Management in the Built Environment Analysis of strategic position of the organisation Identify key Forces through 5 -Forces structural analysis Audit the envm influences Strategic position Identify the firm’s position In the industry Examine and idendify Opportunities and threats Through SWOT Pg 2 of Unit 5 Examine the nature of envm sl/bmbe/2016 15

Business Management in the Built Environment Analysis of strategic position of the organisation Identify key Forces through 5 -Forces structural analysis Audit the envm influences Strategic position Identify the firm’s position In the industry Examine and idendify Opportunities and threats Through SWOT Pg 2 of Unit 5 Examine the nature of envm sl/bmbe/2016 16

Business Management in the Built Environment Michael Porter’s 5 forces Potential Entrants Threat of Entrants Suppliers Bargaining Power COMPETITIVE RIVALRY Buyers Bargaining Power Threat of Substitutes sl/bmbe/2016 17

Business Management in the Built Environment sl/bmbe/2016 18

Business Management in the Built Environment Exam question: (for discussion) Critically appraise Porter’s five forces model, provide a view on the school of thought that underpins the model and explain how the model could be used by a built environment organisation to develop organisational strategy. REFER TO Pg : 4 -7 OF UNIT 5 (TEXT) This question will be discussed in lesson 5 sl/bmbe/2016 19

Business Management in the Built Environment The Built Environment: The UK Construction Industry (GDP) STEEP ANALYSIS Public / Private (Spending) Civils Construction Housing R&M Strategic Direction (Markets / Portfolio / Competition) sl/bmbe/2016 20

Business Management in the Built Environment The Built Environment: The Singapore Construction Industry (GDP)? STEEP ANALYSIS Public / Private (Spending) Civils Construction Housing R&M Strategic Direction (Markets / Portfolio / Competition) sl/bmbe/2016 21

Singapore GDP/Construction

Singapore GDP from Construction

Singapore Property Price Index

Business Management in the Built Environment Challenges in the Built Environment Industry Statistics: (Companies / Employment) Client Involvement: (Novice / Enlightened) Characteristics: (Project-based / Sub-Contracting) Procurement: (Contractual Governance / Route) Modern Methods of Construction: (incl. Environmental) Future Strategies: (Consolidation / Merger / Acquisition) sl/bmbe/2016 22

Sl/2015 Business Management in the Built Environment Discussion & assignment (exam Question) As the senior executive of a built environment firm, critically appraise and discuss what you consider to be the key issues and their impact upon the environment within which the organisation competes. Furthermore clearly explain how these issues affect the organisation’s strategy. sl/bmbe/2016 23