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1
STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 4 Environmental Scanning and Industry Analysis
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Environmental Scanning
Societal environment --
–Economic forces–Technological forces–Political-legal forces–Sociocultural forces
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Societal Environment
Economic Forces --
–Regulate exchange of materials, money, energy and information
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Societal Environment
Technological Forces --
–Generate problem-solving inventions
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Societal Environment
Political-legal Forces --
–Allocate power; provide laws and regulations
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Societal Environment
Sociocultural Forces --
–Regulate values, mores, and customs of society
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Task Environment
Task environment --
–Elements or groups that directly affect a corporation and are affected by it
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Task Environment
Industry Analysis --
–In-depth examination of key factors within a corporation’s task environment
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Variables in Societal Environment
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Demographic Trends
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Transformational Sociocultural Trends
8 Current Trends –
–Increasing environmental awareness–Growing health consciousness–Expanding seniors market–Impact of the Generation Y boomlet–Declining mass market–Changing pace and location of life–Changing household composition–Increasing diversity of workforce & market
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International Societal Environments
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Scanning the Task Environment
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Ethical Behavior
“business ethics”
–Argument that there is no such thing … it is an oxymoron
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Ethical Decision Making
Corporate practices --
–Massive write-downs and restatements of profit–Misclassification of expenses as capital expenditures–Pirating corporate assets for personal gain
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External Strategic Factors
Strategic 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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Porter’s Approach to Industry Analysis
Threat of New Entrants –
–Economies of scale–Product differentiation–Capital requirements–Switching costs–Access to distribution channels–Cost disadvantages–Government policy
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Porter’s Approach to Industry Analysis
Rivalry Among Existing Firms –
–Number of competitors–Rate of industry growth–Product or service characteristics–Amount of fixed costs–Capacity–Height of exit barriers–Diversity of rivals
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