Class Notes (1,017,263)
CA (584,537)
McGill (35,494)
MGCR (718)
Moore (8)
Lecture 4

MGCR 423 Lecture Notes - Lecture 4: Swot Analysis, Switching Barriers, Pest AnalysisPremium

7 pages99 viewsFall 2017

Department
Management Core
Course Code
MGCR 423
Professor
Moore
Lecture
4

This preview shows pages 1-2. to view the full 7 pages of the document.
STRATEGY LECTURE 4: EXTERNAL ENVIRONMENT
Analysis: Enabling the Right Decision
Analysis supports the decision making process, it should no hinder the decision making but
make it stronger
Key objectives of the analysis
o Ensure key facts are being brought forward
o Ensure the right issues and opportunities are being addressed
o Create a level knowledge playing field for strategic planning participants
o Select the correct strategies to achieve the vision
o Create buy in
External Environmental Analysis (insert graph)
General environment:
o Focused on elements in the broader society than can indirectly influence an industry an
the firms within the industry
o Influenced by demographic, economic, political/legal, sociocultural, technological,
global and sustainable physical.
o Firms cannot directly control these environmental elements, but can analyze and predict
trends
Industry environment:
o Focused on factors and conditions influencing a firm’s profitability within an industry
such as threat of new entrants, power of suppliers, power of buyers, the threat of
substitutes and intensity of rivalry among competing firms
Competitor environment:
o Focused on predicting the dynamics of competitor’s actions, responses and intentions
o How companies gather and interpret information about competitors is called competitor
analysis
o Combination of the two prior analyses
Market and Customers (4th) not in text
Four Components of the External Environmental Analysis
1. Scanning- identifying early signs of environmental changes and trends
o Often reveals ambiguous, incomplete data that requires careful analysis
o Internet provides a lot of opportunity for scanning
2. Monitoring detecting meaning through ongoing observations of environmental changes and
trends
o Requires a firm to identify important stakeholders and understand its reputation with these
stakeholders
o Scanning and monitoring are very important when a firm competes in an environment with
high technological uncertainty
3. Forecasting- developing projections of anticipated outcomes based on monitored changes and
trends
4. Assessing- determining the timing and importance of environmental changes and trends for
firm’s strategies and their management
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version

Subscribers Only

Only half of the first page are available for preview. Some parts have been intentionally blurred.

Subscribers Only
o The previous 3 allow you to understand the general environment. Intent of assessing is
to find the implications of your understanding
SWOT Analysis: Good For a First Pass
Valuable for starting discussions it is not enough to make real strategic decisions
External components:
o Opportunity: a condition in the general environment that, if exploited effectively, helps a
firm achieve strategic competitiveness
o Threat: a condition in the general environment that may hinder a firm’s efforts to
achieve strategic competitiveness
Areas you want to look at when performing a SWOT
General Environment: 7 Dimensions
Seven dimensions in the broader society that influence an industry and the firms within it:
o Demographic
o Economic
o Political/legal (sometimes divided into separate categories)
o Sociocultural
o Technological
o Global
o Physical (also sometimes called environmental)
Important to look at both trends in the general environmental and what is driving those trends
(“drivers”)
PESTEL, similar but different
The General Environment: Segments and Elements
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version

Subscribers Only

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.