UNIT-3

ANALYSIS AND

FRAMEWORK

Environmental Threat & Opportunity Profile (ETOP)

A technique undertaken by organizations to appraise the environment

ETOP involves dividing the environment into different sectors

The impact of each sector on the organization is studied

It essentially involves the proper placing of various information gathered through the environmental survey and integrating them into meaningful pattern

Environmental Threat & Opportunity Profile (ETOP)

To understand the impact of environmental trends in terms of opportunities and threats of the firm

Each component of the environment will provide insights into the Opportunity-Threat status

Opportunity-Threat profile is prepared in a comprehensive manner

It is a summary of all the diagnoses carried out as a part of the environment survey

Each component of the environment must be interpreted as Positive, Negative or Neutral developments from the standpoint of the firm

Macro-Environmental Factors

Micro-Environmental Factors

Environmental Threat & Opportunity Profile (ETOP)

Micro Environment

The Consumers/Demand The Competition Legal Environment Technological

Aspects The Industry

Environmental Threat & Opportunity Profile (ETOP)

Macro Environment

Political environment

Social environment

Economic environment

Technological environment

Natural environment

Environmental Threat & Opportunity Profile (ETOP)

Strategic Advantage Profile

Every firm has strategic advantages and disadvantages

Large firms have financial strength but they tend to move slowly, compared to smaller firms, and often cannot react to changes quickly

No firm is equally strong in all its functions

Strategists must be aware of the strategic advantages or strengths of the firm to be able to choose the best opportunity for the firm

Strategic Advantage Profile

To determine the internal strengths and weaknesses with which it must face the opportunities and threats from the environment

Factors may be covered under the various broad headings

Strategic Advantage Profile

Marketing and Distribution

R & D and Engineering

Production and Operations Management

Corporate Resources and Personnel

Finance and Accounting

DIFFERENT APPROACHES TO DEVELOP COMPETITIVE ADVANTAGE

The first approach is to compete based on existing strengths.

The second approach is still based on existing strengths but avoids head on competition. ‑

The third approach is used for example to compete directly with a competitor in a well established, stagnant industry. ‑

Finally, a competitive advantage may be obtained by means of innovations which open new markets or result in new products

S A P

SWOT Analysis

SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats

SWOT analysis headings provide a good framework for reviewing strategy, position and direction of a company or business proposition

SWOT analysis template is normally presented as a grid, comprising four sections, one for each of the SWOT headings: Strengths, Weaknesses, Opportunities, and Threats

SWOT Analysis

Strengths (Core Capabilities/ Non-Core Capabilities): Strength is an inherent over its competitors.

Weakness (Core or Non-Core): A weakness is an inherent limitation or constraint of the organization which creates strategic disadvantage to it.

Opportunity (Major Attraction in the Industry): An opportunity is a favourable condition in the organization’s environment which enables it to strengthen its position.

Threat (Major Non-attraction in the Industry): A threat is an unfavourable condition in the organization’s environment which causes a risk or damage to, the organization’s position.

SWOT Analysis

SWOT Analysis

Maxi (Strengths) - Maxi (Opportunities)

Maxi (Strengths) - Mini (Threats)

Mini (Weaknesses) - Maxi (Opportunities)

Mini (Weaknesses) - Mini (Threats)

Mc Kinsey’s 7’s Framework

Many companies place stress on strategic planning but do not implement according to plans

Poor implementation that many companies inspite of having good strategies, have failed

Strategy Structure Systems Style Skills StaffSuper

Ordinate goals

Mc Kinsey’s 7’s Framework