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External Environment Analysis in Strategy

This document discusses tools and techniques for evaluating external factors that influence organizational strategy. It describes the purpose of environmental analysis as identifying threats, opportunities, and strengths and weaknesses to inform strategy formulation. Specific tools covered include PEST analysis, Porter's Five Forces analysis, industry life cycle analysis, and competitor analysis. Global market factors and Porter's Diamond model for national competitive advantage are also summarized. The objectives are listed as evaluating the influence of external factors on strategy, the strategy formulation process, and analysis tools.

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Melanie Cruz Convento
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278 views20 pages

External Environment Analysis in Strategy

This document discusses tools and techniques for evaluating external factors that influence organizational strategy. It describes the purpose of environmental analysis as identifying threats, opportunities, and strengths and weaknesses to inform strategy formulation. Specific tools covered include PEST analysis, Porter's Five Forces analysis, industry life cycle analysis, and competitor analysis. Global market factors and Porter's Diamond model for national competitive advantage are also summarized. The objectives are listed as evaluating the influence of external factors on strategy, the strategy formulation process, and analysis tools.

Uploaded by

Melanie Cruz Convento
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Introduction
  • Objectives
  • Purpose of Environmental Analysis
  • Tools of Environmental Analysis

EXTERNAL

ENVIRONMENT
KIMBERLY SHANE
CABALLES &
CRISTEL BALDICAÑAS
OBJECTIVES:
1. Evaluate the influence of key external
factors on an organization’s strategy.
2. Evaluate the process of strategy
formulation
3. Evaluate tool and techniques used in
strategy formulation

kimberly
PURPOSE OF 3

ENVIRONMENTAL
ANALYSIS
 To characterise the environment that can influence the
business.
 To identify threats and be prepared to handle them
appropriately.
 To identify opportunities and be prepared to benefit from them
in a timely manner.
 To identify competitive strengths and weaknesses.
 To recognise competition in the market and how to compete
more effectively.
 To identify stakeholders and what they require from the
organisation.

cristel
TOOLS OF ENVIRONMENTAL ANALYSIS

Tools of environmental analysis 4


kimberly
5

PEST ANALYSIS
6
7
8

POSTER’S FIVE FORCES


ANALYSIS
• This model focuses on conditions within a specific
industry.
• The five forces decide whether or not a business in that
industry is profitable.
• Generally, the greater the forces, the lower the
prospective profit potential.
• Success lies in minimising these forces so as to increase
one's profit potential.
9
10

INDUSTRY LIFE CYCLE


ANALYSIS
Presentation title 11
Life cycle analysis 12

ADVANTAGE OF LIFE
CYCLE ANALYSIS
Better strategic planning - more focused strategies can
be implemented according to the stage, for instance,
pricing strategies can differ at different stages.

Helps budget better - helps understand the stages where


costs will be incurred and where inflows can be expected.

Proactive strategies - strategies can be implemented at


the first sign of the product moving to the next stage for
maximum profitability.
Presentation title 13

COMPETITOR
ANALYSIS
o Seeks to understand the competition
o Aims to define a company’s own position
relative to its competitors regarding
14
15
16
GLOBAL MARKETS
Reasons for entering global markets
 Further expansion is not possible domestically
 Emerging opportunities in foreign markets
 Lowering of trade restrictions in foreign
countries
 Shareholder pressure to increase return
PORTERS DIAMOND
Porter identified four factors in his
diamond model:
 Factor conditions
 Demand conditions
 Strategy, structure and rivalry
 Related and supporting industry
 The role of government
 The role of chance events
THANK YOU FOR
LISTENING GUYS 🏻

EXTERNAL ENVIRONMENT KIMBERLY SHANE CABALLES & CRISTEL BALDICAÑAS
OBJECTIVES: 1. Evaluate the influence of key external factors on an organization’s strategy. 2. Evaluate the process of s
PURPOSE OF ENVIRONMENTAL ANALYSIS To characterise the environment that can influence the business. To identify threats
TOOLS OF ENVIRONMENTAL ANALYSIS Tools of environmental analysis 4kimberly
5 PEST ANALYSIS
6
7
8 • This model focuses on conditions within a specific industry. • The five forces decide whether or not a business in that
9
INDUSTRY LIFE CYCLE ANALYSIS 10

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