Identifying Opportunities And Threats
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- Words: 1,059
- Pages: 39
What you will learn in this section : •
•
•
•
Envisioning Strategy – Definition – Framework – Visual Models External Analysis – PEST – PEST Impact Analysis Industry and Competitive Analysis – Industry Structure – Evolution of Industries – Industry Supply Chain – Potential Industry Earnings – Porter’s 5 Forces Analysis – Competitive Intensity – Strategies for minimizing competitive forces – Perceptual Map – Barriers to Entry/Incumbency advantages – DSIR effect Company Resources and Capabilities – ARC Analysis/HR – SWOT Analysis – Value Creating Processes/Core Competencies – Strategic Gameboard – Balanced Scorecard – Change Management
© Sunil Mehrotra
Understanding Strategic Management is like pealing an onion
Analyzing the External Environment: PEST Analysis Fiscal Policy Monetary Policy Tax laws Intellectual Property protection Poli Copyright laws tica l Securities Laws Business climate
Cha ng
External Environment ic m no ge o Ec han C
e
GDP GDP growth Exchange rate Unemployment rate Skilled labor Education levels Trade unions Infrastructure Healthcare costs Raw materials
Opportunities Opportunities
New technologies al Materials technologies c i Process technologies log e o Information technologies hn ang c Communication technologiesTe Ch Government incentives Energy costs Broadband penetration Technology incubation
Threats Threats So c Ch ial ang e
Demographics Income Distribution Social stability Ethnic patterns Consumerism Discretionary income Fashions/fads Consumer trends
© Sunil Mehrotra
PEST Analysis using the Internet http://delicious.com/smehro/mbam619+PEST+Politics%20 PEST Politics http://www.nytimes.com/interactive/2008/10/18/business/20081019-metrics-graphic.html Can Presidents tame business cycles
http://harvardbusiness.org/flatmm/hbextras/200805/recessions/ HBR Interactive graphics on recessions http://delicious.com/smehro/mbam619+PEST+economy%20 PEST Economy http://www.fedstats.gov/?cm_sp=ExternalLink-_-Federal-_-DOC Fed Stats all in one place http://www.allbusiness.com/marketing-advertising/market-research-analysis-market/114698161.html Collection of resources and links to free data http://delicious.com/smehro/mbam619+PEST+Social%20 PEST Social http://delicious.com/smehro/mbam619+PEST+Technology%20 PEST Technology
PEST Analysis: Example Federal Deficit as % of GDP
Example of fiscal policy : Visualizing federal budget
Example of fiscal policy: National Debt: 1940 to present
Who is funding our debt?
Citigroup's role in CDOs and the financial crisis
Auto worker wages
http://www.nytimes.com/imagepages/2008/12/10/business/20081210_LEONHARDT_GRAPHIC.html
Economy at a glance Economic Indicators Real Economic Grow th
Existing Home Sales
Consumer Prices
Sept. 2008 Oct. 2008
Unemployment
Productivity
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
% change from previous period
4.00%
5.00%
6.00%
7.00%
World map:Population
New technologies are being adopted faster today
Change Will Be Relentless: Wireless industry example Micro Fuel Cells Light Emitting Polymer Displays
Visibility
Mesh Networks
WCDMA 802.11b Wi-Fi GPRS
UWB
EDGE
4G Wireless MIMO Smart Dust Technology Trigger
MEMS
Peak of Inflated Expectations
Wireless Broadband As of 2Q03
Trough of Disillusionment
Maturity
Slope of Enlightenment
Plateau of Productivity 16
Gartner Predicts: Hot Spots Explode … 75,000,000 Users 167,000 Hot Spots Hot Spot Users/ Hot Spots
30,000 Users 1,000 Hot Spots
2001
2008
17
How the Web has grown and evolved
Two Key Forces Driving Business Change Faster Economic Pace
Emerge
Threats
Appear
Triennial
Strategy
Rolling
Windows Opportunity
Keyholes
Forecast
Chaotic
Demand
Impatient Customers
“Time Tortured”
Demand Convenience
This Is the “Now Economy”
19
Culture: Innovation in art
20
21
Analyzing the External Environment: PEST Analysis Fiscal Policy Monetary Policy Tax laws Intellectual Property protection Poli Copyright laws tica l Securities Laws Business climate
Cha ng
External Environment ic m no ge o Ec han C
e
GDP GDP growth Exchange rate Unemployment rate Skilled labor Education levels Trade unions Infrastructure Healthcare costs Raw materials
Opportunities Opportunities
New technologies al Materials technologies c i Process technologies log e o Information technologies hn ang c Communication technologiesTe Ch Government incentives Energy costs Broadband penetration Technology incubation
Threats Threats So c Ch ial ang e
Demographics Income Distribution Social stability Ethnic patterns Consumerism Discretionary income Fashions/fads Consumer trends
© Sunil Mehrotra
Political Change Impact
Fiscal Policy Monetary Policy Tax laws Intellectual Property protection Copyright laws Securities Laws Business climate International Trade
“Economy” Change Impact
GDP GDP growth Exchange rate Unemployment rate Skilled labor Education levels Trade unions Infrastructure Healthcare costs Raw materials
It is crucial to describe the subject for the PEST analysis clearly so that people, contributing to the analysis, and those interpreting the results from PEST analysis, could understand the purpose of the PEST assessment and its implications
PEST Impact Matrix Nature of change
Impact of change
Opportunities
Threats Threats
Strategic response
Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
PEST Impact example: Nature of change
Impact of change
Opportunities
Threats Threats
Strategic response
Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
PEST Analysis Example: Poli tica
l Ch ang
e
Infrastructure Technologies
Emerging Markets
ic m no ge o Ec han C
Digital Connections
Originations
Opportunities Opportunities Environmental Solutions
al c i g o l o hn ange c Te Ch
Demographics
So c Ch ial ang e © Sunil Mehrotra
PEST Impact example: Nature of change
Impact of change
Opportunities
Threats Threats
Strategic response
Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
PEST Impact example: Demographics
© Sunil Mehrotra
PEST Impact example:
© Sunil Mehrotra
Student Examples: Pest Analysis Breanne Hayes April 2008 MBA Graziadio School of Business and Management Pepperdine University
Elizabeth Passeretti April 2008 MBA Candidate Graziadio School of Business and Management Pepperdine University
PEST example: Nature of change
Political Change Economic Change Social Change Technological Change
Impact of change
Opportunities
More FDA approval process conservative
US economic downturn
Aging Population
New materials for joint replacement
Longer time to market
Generic drugs more accepted
Consumer spending down Caring for the elderly
New cost/quality frontier
Threats Threats
Shorten Product Development Cycle Evaluate acquisitions Identify product/market needs to serve the elderly
New growth opportunities
New products
Strategic response
Potential new competitors
Invest in promising start-ups
© Sunil Mehrotra
PEST Impact example: Nature of change
Political Change Economic Change Social Change Technological Change
Impact of change
Opportunities
Democratic party More in power government control $100+ crude oil price
Aging Population Breakthrough in science. Process improvement technologies
Commodity prices increasing Caring for the elderly
New growth opportunities
New science and new technologies imminent
New startups. Disruptive technologies
Threats Threats
Strategic response
Pressure on prices
Operational Efficiency to reduce costs
Pressure on costs
Focus on Operational Efficiency Identify product/market needs to serve the elderly
Potential new competitors
Invest in/acquire promising start-ups
© Sunil Mehrotra
Contemplating the Future
Scenario Planning
http://strategicframing.com/strategic-planning-workshop/
Nappies 1-6? What is visual thinking? What is Strategic Management? -strategic planning framework What is the role of the CEO/Leader? -Leadership styles What is PEST Analysis? Using the Internet for PEST Analysis -Data sources and web resources Identifying business Opportunities and Threats through PEST Impact analysis framework
Mnemonic 2
•
•
•
Envisioning Strategy – Definition – Framework – Visual Models External Analysis – PEST – PEST Impact Analysis Industry and Competitive Analysis – Industry Structure – Evolution of Industries – Industry Supply Chain – Potential Industry Earnings – Porter’s 5 Forces Analysis – Competitive Intensity – Strategies for minimizing competitive forces – Perceptual Map – Barriers to Entry/Incumbency advantages – DSIR effect Company Resources and Capabilities – ARC Analysis/HR – SWOT Analysis – Value Creating Processes/Core Competencies – Strategic Gameboard – Balanced Scorecard – Change Management
© Sunil Mehrotra
Understanding Strategic Management is like pealing an onion
Analyzing the External Environment: PEST Analysis Fiscal Policy Monetary Policy Tax laws Intellectual Property protection Poli Copyright laws tica l Securities Laws Business climate
Cha ng
External Environment ic m no ge o Ec han C
e
GDP GDP growth Exchange rate Unemployment rate Skilled labor Education levels Trade unions Infrastructure Healthcare costs Raw materials
Opportunities Opportunities
New technologies al Materials technologies c i Process technologies log e o Information technologies hn ang c Communication technologiesTe Ch Government incentives Energy costs Broadband penetration Technology incubation
Threats Threats So c Ch ial ang e
Demographics Income Distribution Social stability Ethnic patterns Consumerism Discretionary income Fashions/fads Consumer trends
© Sunil Mehrotra
PEST Analysis using the Internet http://delicious.com/smehro/mbam619+PEST+Politics%20 PEST Politics http://www.nytimes.com/interactive/2008/10/18/business/20081019-metrics-graphic.html Can Presidents tame business cycles
http://harvardbusiness.org/flatmm/hbextras/200805/recessions/ HBR Interactive graphics on recessions http://delicious.com/smehro/mbam619+PEST+economy%20 PEST Economy http://www.fedstats.gov/?cm_sp=ExternalLink-_-Federal-_-DOC Fed Stats all in one place http://www.allbusiness.com/marketing-advertising/market-research-analysis-market/114698161.html Collection of resources and links to free data http://delicious.com/smehro/mbam619+PEST+Social%20 PEST Social http://delicious.com/smehro/mbam619+PEST+Technology%20 PEST Technology
PEST Analysis: Example Federal Deficit as % of GDP
Example of fiscal policy : Visualizing federal budget
Example of fiscal policy: National Debt: 1940 to present
Who is funding our debt?
Citigroup's role in CDOs and the financial crisis
Auto worker wages
http://www.nytimes.com/imagepages/2008/12/10/business/20081210_LEONHARDT_GRAPHIC.html
Economy at a glance Economic Indicators Real Economic Grow th
Existing Home Sales
Consumer Prices
Sept. 2008 Oct. 2008
Unemployment
Productivity
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
% change from previous period
4.00%
5.00%
6.00%
7.00%
World map:Population
New technologies are being adopted faster today
Change Will Be Relentless: Wireless industry example Micro Fuel Cells Light Emitting Polymer Displays
Visibility
Mesh Networks
WCDMA 802.11b Wi-Fi GPRS
UWB
EDGE
4G Wireless MIMO Smart Dust Technology Trigger
MEMS
Peak of Inflated Expectations
Wireless Broadband As of 2Q03
Trough of Disillusionment
Maturity
Slope of Enlightenment
Plateau of Productivity 16
Gartner Predicts: Hot Spots Explode … 75,000,000 Users 167,000 Hot Spots Hot Spot Users/ Hot Spots
30,000 Users 1,000 Hot Spots
2001
2008
17
How the Web has grown and evolved
Two Key Forces Driving Business Change Faster Economic Pace
Emerge
Threats
Appear
Triennial
Strategy
Rolling
Windows Opportunity
Keyholes
Forecast
Chaotic
Demand
Impatient Customers
“Time Tortured”
Demand Convenience
This Is the “Now Economy”
19
Culture: Innovation in art
20
21
Analyzing the External Environment: PEST Analysis Fiscal Policy Monetary Policy Tax laws Intellectual Property protection Poli Copyright laws tica l Securities Laws Business climate
Cha ng
External Environment ic m no ge o Ec han C
e
GDP GDP growth Exchange rate Unemployment rate Skilled labor Education levels Trade unions Infrastructure Healthcare costs Raw materials
Opportunities Opportunities
New technologies al Materials technologies c i Process technologies log e o Information technologies hn ang c Communication technologiesTe Ch Government incentives Energy costs Broadband penetration Technology incubation
Threats Threats So c Ch ial ang e
Demographics Income Distribution Social stability Ethnic patterns Consumerism Discretionary income Fashions/fads Consumer trends
© Sunil Mehrotra
Political Change Impact
Fiscal Policy Monetary Policy Tax laws Intellectual Property protection Copyright laws Securities Laws Business climate International Trade
“Economy” Change Impact
GDP GDP growth Exchange rate Unemployment rate Skilled labor Education levels Trade unions Infrastructure Healthcare costs Raw materials
It is crucial to describe the subject for the PEST analysis clearly so that people, contributing to the analysis, and those interpreting the results from PEST analysis, could understand the purpose of the PEST assessment and its implications
PEST Impact Matrix Nature of change
Impact of change
Opportunities
Threats Threats
Strategic response
Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
PEST Impact example: Nature of change
Impact of change
Opportunities
Threats Threats
Strategic response
Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
PEST Analysis Example: Poli tica
l Ch ang
e
Infrastructure Technologies
Emerging Markets
ic m no ge o Ec han C
Digital Connections
Originations
Opportunities Opportunities Environmental Solutions
al c i g o l o hn ange c Te Ch
Demographics
So c Ch ial ang e © Sunil Mehrotra
PEST Impact example: Nature of change
Impact of change
Opportunities
Threats Threats
Strategic response
Political Change Economic Change Social Change Technological Change © Sunil Mehrotra
PEST Impact example: Demographics
© Sunil Mehrotra
PEST Impact example:
© Sunil Mehrotra
Student Examples: Pest Analysis Breanne Hayes April 2008 MBA Graziadio School of Business and Management Pepperdine University
Elizabeth Passeretti April 2008 MBA Candidate Graziadio School of Business and Management Pepperdine University
PEST example: Nature of change
Political Change Economic Change Social Change Technological Change
Impact of change
Opportunities
More FDA approval process conservative
US economic downturn
Aging Population
New materials for joint replacement
Longer time to market
Generic drugs more accepted
Consumer spending down Caring for the elderly
New cost/quality frontier
Threats Threats
Shorten Product Development Cycle Evaluate acquisitions Identify product/market needs to serve the elderly
New growth opportunities
New products
Strategic response
Potential new competitors
Invest in promising start-ups
© Sunil Mehrotra
PEST Impact example: Nature of change
Political Change Economic Change Social Change Technological Change
Impact of change
Opportunities
Democratic party More in power government control $100+ crude oil price
Aging Population Breakthrough in science. Process improvement technologies
Commodity prices increasing Caring for the elderly
New growth opportunities
New science and new technologies imminent
New startups. Disruptive technologies
Threats Threats
Strategic response
Pressure on prices
Operational Efficiency to reduce costs
Pressure on costs
Focus on Operational Efficiency Identify product/market needs to serve the elderly
Potential new competitors
Invest in/acquire promising start-ups
© Sunil Mehrotra
Contemplating the Future
Scenario Planning
http://strategicframing.com/strategic-planning-workshop/
Nappies 1-6? What is visual thinking? What is Strategic Management? -strategic planning framework What is the role of the CEO/Leader? -Leadership styles What is PEST Analysis? Using the Internet for PEST Analysis -Data sources and web resources Identifying business Opportunities and Threats through PEST Impact analysis framework
Mnemonic 2
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