Summary Principles of Management IIA Chpt.5 - Strategic Analysis

Principles of Management IIA by ProfessorBurgerQueen



Chapter 5: Strategic Analysis

- Strategic analysis is the process of researching and analysing an organisation along
with the environment in which it operates to formulate a strategy. It involves:
- Evaluating the external environment to identify opportunities and threats
- Evaluating the internal environment to identify strengths and weaknesses

- The industry model of strategic analysis holds that the main determinant of an
organisation’s strategy is the external

- The resources model holds that its the organisation’s unique internal resources and
capabilities that are the main determinant

- The external environment is made up of the macroenvironment and the industry
environment.

- An organisation’s macroenvironment includes these subcomponents:
- Political-legal
- Demographic
- Economic
- Socio-cultural
- Technological
- Natural

- The industry environment component of the external environment is generally made
up of:
- Existing competitors
- New entrants
- Suppliers
- Customers
- Providers of substitute products/services

- The internal environment refers to thing the organisation has control over, ie. human,
physical, financial resources, and capabilities