1. Strategic Management Business Environment Scanning General

2. Business Environment Scanning Lecture Outline Layers of the Business Environment The Macroenvironment PESTEL Porter’s National Diamond

3. Business Environment Scanning and SWOT Analysis Strengths ) Analyses organisational ) resource capability. Weaknesses ) Internal Analysis Opportunities ) Analyses business ) environment. Threats ) External Analysis

4. Critical Success Factors Those product and service features that are particularly valued by customer groups and, therefore, where an organisation must excel in order to outperform competitors. Typical CSFs ReputationArchitectureInnovation After-sales service Delivery reliability Testing Technical quality

5. Layers of the business environment

6. Understanding the Macro-Business Environment Diversity –Many different influences (or just a few)? Complexity –Interconnected or isolated influences? Speed of change (particularly IT) –Turbulent and Chaotic? or –Placid and Predictable

7. Nature of Business Environment (Emery and Trist) Complex Dynamic Slow SPEED OF Fast CHANGE Many NUMBER OF INFLUENCES Few Complex Stable Simple Stable Simple Dynamic

8. Macroenvironment – PESTEL

9. Political Government stability Taxation policy Foreign trade regulations Social welfare policies Economic Business cycles GNP trends Interest rates Money supply Inflation Unemployment Disposable income

10. Macroenvironment – PESTEL Sociocultural Population demographics Income distribution Social mobility Lifestyle changes Attitudes to work and leisure Consumerism Levels of education Technological Government spending on research Government and industry focus on technological effort New discoveries /developments Speed of technology transfer Rates of obsolescence

11. Macroenvironment – PESTEL Environmental Environmental protection laws Waste disposal Energy consumption Legal Competition law Employment law Health and safety Product safety

12. Key Aspects of PESTEL Analysis Not just a list of influences Need to understand key drivers of change Focus is on future impact of environmental factors

13. The Key Driver of Change? Globalisation

14. Determinants of National Advantage in a Global Business Environment Some countries are more competitive than others Some industries within countries are more competitive than others

15. Porter’s Diamond The Determinants of National Advantage.