Strategic Management
Presentation
PRESENTED BY -
KUNAL
MAHEK
MOUSAMI
NIKITA
What is Environment ?
Environment means the surrounding, external objects, influences or
circumstances under which someone or something exists.
The environment of any organization is the aggregate of all the
conditions, events and influences that surround and affect it.
Characteristics of Environment
Environment is complex
Environment is dynamic
Environment is multi-faceted
Types of Business Environment
Internal Environment External Environment
a. Structure a. Micro Environment
b. Company image and brand equity
b. Macro Environment
c. Finance
d. Human Resources
e. Marketing Approach
f. R and D
Environmental Sector
Economic Environment Regulatory Environment
International Environment Socio cultural Environment
Market Environment Supplier Environment
Political Environment Technological Environment
What is Environmental Appraisal ?
Environmental appraisal means to analyze all the
factors of business environments. For finding
business's available opportunities and risks,
environmental appraisal is needed.
Stages involved in environment appraisal
Factors Affecting Environmental Appraisal
Identification of Environmental Factors
Structuring the Environmental Appraisal
Factors Affecting Environmental Appraisal
Factors relating to environment
Factors relating to Organization
Factors relating to Strategies
Identification of Environmental Factors
Critical Issues
High Priority Issues
Low Priority Issues
Structuring the Environmental Appraisal
This is the third stage of environmental appraisal. In this
stage, we create the structure of environmental appraisal.
One side of structure will be our strengths and other side
will be our weaknesses. By comparing both, we estimate
our surviving power in the environment of business.
Environmental scanning
Environmental scanning can be defined as process by
which organizations monitor their relevant
environment to identify opportunities and threats
affecting their business for purpose of taking strategic
decisions
Factors to be considered for scanning
The external environment in which an organization exists consists of a bewildering
variety of factors. These are as below:
Events are important and specific occurrences taking place in different
environmental sectors.
Trends are general tendencies or the courses action along which events take
place.
Issues are current concerns that arise in response to events and trends.
Expectations are demands made by interested groups in light of their concern for
issues.
Approaches to environmental scanning
Kubr has suggested three approaches which could be adopted for sorting
out information for environmental scanning These three approaches are
Systematic approaches
Ad hoc approach
Processed-form approach
Techniques of environmental scanning
SWOT ANALYSIS- Strength, weakness, threats and opportunities are analyzed.
PESTLE ANALYSIS –Political, environmental, social, technological, legal and
environmental (nature) aspects are analyzed.
INDUSTRY ANALYSIS – Helps businessman to understand different pieces of market to
gain competitive advantage.
QUEST ANALYSIS-Quick environmental scanning techniques are given by B.nanus which
involves following steps :1) observes major trends and events 2) speculate on a wide range
of important issues 3) prepare summary report 4) identify feasible strategies.
Techniques of environmental scanning
COMPETITIOR’S ANALYSIS – identification of forces affecting competitive dynamics.
It was given by Michael Porter. It is a 5 –forces model consisting the following elements,
item 1 being central.
1. New market entrants
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Competitive rivalry
5. Products and technology development
What is SWOT Analysis?
Acronym for Strengths, Weaknesses, Opportunities,
and Threats.
Planning tool used to understand Strengths,
Weaknesses, Opportunities, & Threats involved in a
project / business.
Used as framework for organizing and using data
and information gained from situation analysis of
internal and external environment.
Techniquethat enables a group / individual to move
from everyday problems / traditional strategies to a fresh
perspective.
Strengths
Characteristics of the business or a team that give it an advantage over others
in the industry.
Positive tangible and intangible attributes, internal to an organization.
Beneficial aspects of the organization or the capabilities of an
organization, which includes human competencies, process capabilities,
financial resources, products and services, customer goodwill and brand loyalty.
Weaknesses
Characteristics that place the firm at a disadvantage relative to others.
Detract the organization from its ability to attain the core goal
and influence its growth.
Weaknesses are the factors which do not meet the standards we feel
they should meet. However, weaknesses are controllable. They must
be minimized and eliminated.
Opportunities
Chances to make greater profits in the environment - External attractive
factors that represent the reason for an organization to exist & develop.
Arisewhen an organization can take benefit of conditions in its environment
to plan and execute strategies that enable it to become more profitable.
Organization should be careful and recognize the opportunities and
grasp them whenever they arise. Opportunities may arise from market,
competition, industry/government and technology.
Threats
Externalelements in the environment that could cause trouble for the
business - External factors, beyond an organization’s control, which
could place the organization’s mission or operation at risk.
Arise when conditions in external environment jeopardize the
reliability and profitability of the organization’s business.
Compound the vulnerability when they relate to the weaknesses.
Threats are uncontrollable. When a threat comes, the stability and
survival can be at stake.
Points to Remember
Short and
simple
Easy to
Specific
understand
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Thank You
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