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2.1 - Coggle Diagram
2.1
Joanna Townend Lecture
SWOT
Analysis
Strengths
Weaknesses
Opportunities
Threats
Strategic Analysis Definitions
(BNET Business Dictionary)
The process of conducting research on the business environment within which an organisation operated and on the organisation itself, in order to formulate a strategy
Worrall 1998, p.3
A theoretically informed understanding of the environment in which an organisation operates, together with the understanding of the organisation's interaction with its environment in order to improve operational efficiency and effectiveness by increasing the
organisation's capacity
to deploy and redeploy its resources intelligently
Strategic Analysis Process
Starts with
Defining Goals
What are the organisation's defined goals?
e.g. Achieving defined profit levels, Market share or revenue targets etc..
Opportunities
and
Threats
Macro Levels
Current Economic Conditions
Interest Rates
Taxation
Technologies
Demographics
Industry and Sectors
Competition
Direct
Indirect
Analysing Key Markets
Opportunities
examples for Google
Cloud Computing
Development of Android Operating System
Threats
examples for Google
Growing Competitive threats by Microsoft and Facebook
Strength
&
Weaknesses
Strengths
examples for Google
Leadership in market
Generating user traffic
Weaknesses
examples for Google
Over dependence on advertising rates
Different Approaches
Rational approach of Porter
(Design School)
Linear and logical
Top-down
Making deliberate strategic choices from the information
Emergent Approach of Minztberg
(Learning School)
Open to new opportunities appearing with time
Scanning the Macro-environment
Weak Signals
"Early signs of future trends or changes that could fundamentally disrupt an organisation’s competitive environment and impact on how it operates"
Organisations must scan the macro-environment to detect signals of fundemental changes in one or more PESTLE dimension
Macro-environment Analysis Aims
(Fahey Narayanan, 1986)
Intelligence for strategic decision making
Fosters and support strategic thinking in organisations
Provides an understanding of current and potential changes
Strategic Analysis
It allows the organisation to
make
and
implement
strategic decisions
Strategic Management Process:
Identification of strategic choices
Strategy Formulation
Strategy Implementation
Subsequent Review of the Strategy
Strategic
Analysis
External Environment Analysis
Internal Environment Analysis
The External Environment
The factors outside the organisation that affect how it operates
Complex and dynamic factors
International competition and globalisation
Global sourcing of product components and its effect on supply chain
Political events such as
Brexit
Identifying opportunities and threats is a key objective of strategic analysis
Levels of External Environment Analysis
The Macro-environment
PESTLE
Political
Micro-Macro
Enternal-external
Economic
Economic Cylces
The Kitchen 'stock' Cycle
3-4 years
The Juglar 'investment' Cycle
7-11 years
The Kuznet 'Infrastructure' Cycle
15-25 years
Social
Demographics
Distribution
Changes in wealth distribution
Geography
Culture
Changing culture
Organisational Network
(Organisational feild)
Technological
Identification of potential innovative activity
R&D Budgets
Patenting Activity
Citation Analysis
New Product Announcements
Media Coverage
Legal
Ecological
Direct Pollution Obligations
Product Stewardship
Sustainable Development
Ageing population, Economic growth rate, Climate change, Birth rates etc..
The Industry or Sector
Identifying factors influencing profitability in the industry
The Competitive Environment and Markets
Predict competitors strategic moves
Identifying competitors in the market