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