ETOP & PIMS ANALYSIS

Environmental Threat and Opportunity Profile (ETOP) Analysis

• An environmental threat and opportunity profile is a description of the structure of

external factors.

• Multiple Reasons for an ETOP

1. It helps the organization to identify opportunities and threats

2. Consolidates and strengthens an organization’s position

3. Provides strategists information on which sectors have a favorable impact on the

organization

4. The organization gains knowledge of its standing with respect to its environment

5. Helps formulate strategies.

ETOP ANALYSIS

Economic factors:Technological

factors:

• General economic condition.

• Rate of inflation.

• Interest rate/Exchange rate.

• Source of technology.

• Technological development.

• Impact of technology.

Socio cultural factors : Environmental factors:o Demographic characteristics.

o Social attitudes.

o Education level , awareness, and consciousness of rights.

o Weather change

o Climatic change.

o Demand related factors.

o Suppliers related factors.

ETOP ANALYSIS

ETOP ANALYSIS

Political factors : Legal factors :

o Political system.

o Political structure , its goals and stability.

o Government policies , degree of intervention

o Policies related to licensing , monopolies.

o Policies related to export and import.

o Policies related to distribution and pricing.

Example: MILLIPORE

MILLIPORE PRODUCT LINE

1. Life science.

2. Drug discovery.

3. Sample preparations.

4. Lab water.

5. Process development.

6. Bio production.

7. Process monitoring.

Factors Impact of each Sector

Economic

Technological

Political

Legal

Socio cultural

•Fluctuation in exchange rate•Increasing rate of inflation•Worsening economic conditions

Strong R&D program•Market Leaders•Better solution providers

No significant change.

Following FCPA (Foreign corrupt practices act).•Strict IPR laws - No poaching

•No significance change.

ETOP

OF

MILLIPORE

Factors Impact of each sector

Competitive

Demand related

Governmental policies

Competition particularly from low priced products .

Downfall in demand Containment of rising health-care

cost.

No excise duty only vat for product manufactured in India.

ETOP

OF

MILLIPORE

ETOP for a Motor Bike company:Environmental Sectors Impact of each sector

Social (↑)Customer preference for motorbike, which are fashionable, easy to ride and durable.

Political (→) No significant factor.

Economic (↑)Growing affluence among urban consumers; Exports potential high.

Regulatory (↑) Two Wheeler industry a thrust area for exports.

Market (↑)

Industry growth rate is 10 to 12 percent per year, For motorbike growth rate is 40 percent, largely Unsaturated demand.

Supplier (↑)

Mostly ancillaries and associated companies supply parts and components, REP licenses for imported raw materials available.

Technological (↑)Technological up gradation of industry in progress. Import of machinery under OGL list possible.

PROFIT IMPACT OF MARKET STRATEGIES (PIMS)

• According to the Strategic Planning Institute(SPI), the PIMS is

a collection of statistically documented experiences drawn from

thousands of business, designed to help understand what kind

of strategies work best in what kind of business environment.

• It was developed with the intention of providing empirical

evidence of which business strategies lead to success, within

particular industries.

STRATEGIES OF PIMS• The study identified several strategic variables that

typically influence profitability.• Some of the most important strategic variables

studied were -:a) Investment intensityb) Productivityc) Market Growthd) Quality of product or servicese) Innovationf) Vertical Integration

PIMS Cont.• Interest in PIMS as an analytical approach does not appear very high in

the mid-2000s if recent coverage of the subject in the technical and business press is any indication. A search of Infotrac brings just a few references from the 1990s and 1980s. The most recent book on the subject by Paul W. Farris and Michael J. Moore is largely a look backward—an attempt to assess the contribution PIMS has made to the field of management science. Looking forward, the authors analyze how the PIMS project might be structured if it were launched in the current era. Another broad study of contemporary marketing by Louis E. Boone and David L. Kurtz mentions a comprehensive use of PIMS by the Marketing Science Institute. The MSI study came to the not-so-startling conclusion that (in Boone's and Kurtz's words) "two of the most important factors influencing profitability were product quality and market share."

PIMS Cont.

• PIMS was from the outset—and apparently continues as—a "big company" methodology to measure broad strategies capable of being captured by statistical measures. The reliance of this method on concepts (and measurements) like market share performance and marketing expenditures seems to make its relevance to small business marginal at best. Small companies on average find it very difficult even to guess at their own market shares and only very rarely engage in the kinds of major marketing efforts associated with the GEs, IBMs, and Coca-Colas of the world.

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