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Environmental AnalysisPangasinan State UniversityUrdaneta CityPhilippines
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Stage 1 of Strategic ManagementEnvironmental Analysis
2
Influences in Strategy
• 1960s (Strategy and Structure; Corporate Strategy)• 1963 Harvard business conference leads to SWOT analysis• Boston Consulting firm (BCG) founded in 1963 “strategy boutique”
– Created the portfolio analysis
• 1980s (Porter’s 5 forces)• 1990s (Resource based view of the firm)
Internal Analysis2. Internal Analysis STRUCTURE – the way its organized
- the chain of command
CULTURE – pattern of beliefs values and expectations
RESOURCES – are the assets that constitute raw materials, people, financial and fixed assets
•STRENGTHS
•WEAKNESSES
1963 Strategy Boutiques
• Strategy Boutique is a niche management consultancy
• Management and Business Strategy Consultancy
1980s (Porter’s 5 forces)
-Identify & classify the orgn’s resources. -Appraise SW related to competitors.-Identify Opportunities for better utilization of resources
-Identify the ogrn’s capabilities-What can the orgn do more than the competitors?-Identify input resources per capability & complexity of each capability
Appraise the rent-generatingpotential of resources &capabilitiesa)Potential for sustainable advantageb) Appropriability of their returns
Select a strategy that best exploits the orgn’sresources and capabilitiesrelative to opportunities
-identify resource gaps that needs to be filled -invest in replenishing, augmenting and upgrading of organizations resource base
RESOURCES CAPABILITIESCOMPETITIVEADVANTAGE
STRATEGY
1 2 3 4
5
Two Parts of Environmental Analysis
1. Task environment2. Societal environment
Internal Factors Analysis Summary
EXTERNAL FACTORS WEIGHT RATINGWEIGHTED
SCORE REMARKS
STRENGHTS
WEAKNESSES
TOTAL 1.00
1.2.3.4.5.
1.2.3.4.5.
External Factors Analysis Summary
EXTERNAL FACTORS WEIGHT RATINGWEIGHTED
SCORE REMARKS
OPPORTUNITIES
THREATS
TOTAL 1.00
1.2.3.4.5.
1.2.3.4.5.
Structural Analysis of the Industry
Stakeholders Analysis
Why do a Stakeholder Analysis?
• to identify stakeholder’s interest in, importance to, influence over the intervention, programs and projects
• to identify local institutions and processes upon which to build•To provide a foundation and strategy for participation
STAKEHOLDERS ANALYSIS . . .To determine the stakeholders, use the Ws and Hs like:
•Who are the people or institutions with interest?•What are their degree of influence and control?
•What are the services being provided/offered?•What are their resources?•Why are they doing these?•Who are they serving?•Where are they located or concentrated?•How they deliver their services?
•How efficient, effective and economical are they operating?
Stakeholders Analysis . . .
CLASSIFICTION
• Influencers• Allies• Obstructions
STEP IN ANALYSIS
• List of stakeholders
• Activities, programs, interest• Programs, interest, roles • Degree of Influence
• Classify stakeholders
STAKEHOLDERS ANALYSIS. . .
Process in stakeholders analysis:
•BENEFICIARIES•VULNERABLE GROUPS•SUPPORTERS/ OPPOSITORS•RELATIONSHIPS
•EXPECTATIONS•BENEFITS•RESOURCES•CONFLICTING •INTERESTS
•POWER/STATUS•ORGANIZATION•CONTROL OF RESOURCES•PERSONAL CONNECTIONS•POWER RELATIONS
PLAN OF THEIR INVOLVEMENT:•INTERST, IMPORTANCE•EFFORT NEEDED•PARTICIPATION IN VARIUOS PROJECT CYCLE
IDENTIFY KEY STAKEHOLDERS
ASSESS INFLUENCE
PARTICIPATIONSTRATEGY
ASSESS IMPACTON THE PROJECT
STAKEHOLDERS ANALYSIS
STAKEHOLDERS
(GROUPS, AGENCY,INDIVIDUALS,ETC)
INTEREST AT STAKE
(RELATIVE TO THE MOVEMENT, ORGN)
EFFECTS TO ORGN
(+ 0 - )
IMPORTANCEOF THE
STAKEHOLDER
DEGREE OFINFLUENCE
OF THESTAKEHOLDE
R
IMPORTANCE AND DEGREE OF INFLUENCE ARE MEASURED AS :
U – UNKNOWN; 1- LITTLE OR NO INFLUENCE/IMPORTANCE; 2- SOME IMPORTANCE/INFLUENCE;3 – MODERATE IMPORTANCE/INFLUENCE; 4 – VERY IMPORTANT/SIGNIFICANT INFLUENCE; AND5 – CRITICAL PLAYER/VERY INFLUENTIAL
SWOT
INTERNAL ANALYSIS
EXTERNAL ANALYSIS
SWOT MATRIXSTRENGHTS (S) WEAKNESSES (W)
OPPORTUNITIES (O)
THREATS (T)
LIST 5-10 STRENGHTS LIST 5-10 WEAKNESSES
LIST 5-10 OPPORTUNITIES
LIST 5-10 THREATS
S-O STRATEGIES W-O STRATEGIES
S-T STRATEGIES W-T STRATEGIES
USE YOUR STRENGTHS TO TAKE ADVANTAGE OF THE OPPORTUNITIES
OVERCOME YOUR WEAKNESSES BY TAKING ADVANTAGEOF THE OPPORTUNITIES
USE YOUR STRENGTHSTO MINIMIZE OR AVOID THE THREATS
MINIMIZING YOUR WEAKNESSES AND AVOIDING THE THREATS
STRATEGIC MANAGEMENT OPTIONS
C R I T E R I AS-O S-T W-O W-T
1 2 3 1 2 3 1 2 3 1 2 3
MAGNITUDE
ACCEPTABILITY
RELEVANCE (VMO)
DOABILITY/ VIABILITY
COST-EFFECTIVE
IMPACT
SUSTAINABILITY
OTHERS
T O T A L
STRATEGIC OPTION PROGRAM/PROJECT TIMELINE REQUIRED RESOURCES
IDENTIFIED PROGRAM AND PROJECTS
STRATEGIC MANAGEMENT MODEL
ENVIRONMENTALANALYSIS
EXTERNAL
•OPPORTUNITIES•THREATS
INTERNAL
•STRENGTHS
•WEAKNESSES
MISSION
OBJECTIVES
STRATEGIES
PROGRAMS
PROJECTS
PROCEDURES
BUDGETS
STRATEGY FORMULATION
STRATEGY IMPLEMENTATION
EVALUATIONANDCONTROL
F E E D B A C K PERFORMANCE
ACTION PLANSTRATEGY ACTIVITIES TIMELINE BUDGET RESPONSIBLE REMARKS
STRATEGY # 1
STRATEGY # 2
STRATEGY # 3
STRATEGY # 4
ACTIVITY #1ACTIVITY #2ACTIVITY #3
Reference: Decal, Strategic Management Lecture to CBLU, 2012 www.slideshare.net Strategic Management Introduction to Strategy accessed July 27, 2012