14.12.2021
Business Strategy
Week 2: Monday
Pre- and In-session
- The Pestel Framework: PESTEL analysis highlights six environmental factors in particular that
influence the possible success or failure of particular strategies
Political, economic, social, technological, legal and ecological influences
➔ Organizations need to consider the market environment (e.g. suppliers, customers and
competitors) and the non-market environment (e.g. NGOs, Government, media and
campaign groups)
➔ Key drivers for change are environmental factors that are likely to have a high impact on
industries and sectors, and impact on the success or failure of strategies within them.
➔ Typically, key drivers vary by industry or market.
➔ For example, retailers are concerned with social changes and customer behaviour which
have driven a move to ‘out-of-town’ shopping. Personal disposable income also drives
demand for retailers.
- Macro-environment: What are the key drivers?
1
, 14.12.2021
Five Forces Framework
Porter's Five Forces is an analytical framework that helps investors evaluate a company based on its
position within an industry and the kinds of horizontal and vertical threats it might face in the future.
And…
Implications of Five Forces Analysis
- Identifies the attractiveness of industries – which industries/markets to enter or leave.
- Identifies strategies to influence the impact of the forces, for example, building barriers
to entry by becoming more vertically integrated.
- The forces may have a different impact on different organisations e.g. large firms can
deal with barriers to entry more easily than small firms.
2
Business Strategy
Week 2: Monday
Pre- and In-session
- The Pestel Framework: PESTEL analysis highlights six environmental factors in particular that
influence the possible success or failure of particular strategies
Political, economic, social, technological, legal and ecological influences
➔ Organizations need to consider the market environment (e.g. suppliers, customers and
competitors) and the non-market environment (e.g. NGOs, Government, media and
campaign groups)
➔ Key drivers for change are environmental factors that are likely to have a high impact on
industries and sectors, and impact on the success or failure of strategies within them.
➔ Typically, key drivers vary by industry or market.
➔ For example, retailers are concerned with social changes and customer behaviour which
have driven a move to ‘out-of-town’ shopping. Personal disposable income also drives
demand for retailers.
- Macro-environment: What are the key drivers?
1
, 14.12.2021
Five Forces Framework
Porter's Five Forces is an analytical framework that helps investors evaluate a company based on its
position within an industry and the kinds of horizontal and vertical threats it might face in the future.
And…
Implications of Five Forces Analysis
- Identifies the attractiveness of industries – which industries/markets to enter or leave.
- Identifies strategies to influence the impact of the forces, for example, building barriers
to entry by becoming more vertically integrated.
- The forces may have a different impact on different organisations e.g. large firms can
deal with barriers to entry more easily than small firms.
2
