MNG3701 - Strategic planning - LU3: Strategic Analysis:
Importance of Analyzing the External Environment - CORRECT ANSWER-Managers
can mitigate threats.
-Managers can leverage opportunities.
-Gain understanding of potential impacts.
-Understand the source / proximity of factors.
The PESTEL Model - CORRECT ANSWER-Groups environmental factors into six
segments:
--Political
--Economic
--Sociocultural
--Technological
--Ecological
--Legal
These factors can create:
--Opportunities
--Threats
Political Factors - CORRECT ANSWER-Processes & actions of government bodies
-Firms can shape this factor through:
--Lobbying
--Public Relations
--Contributions
--Litigation
Example: Tesla
-Has a build-to-order sales model
-Cuts out dealers
-Dealers are lobbying for new legislation
Economic Factors - CORRECT ANSWER-Largely macro-economic
Examples include:
, --Growth rates
--Levels of employment
--Interest rates
--Price stability
--Currency exchange rates
Sociocultural Factors - CORRECT ANSWERSociety's cultures, norms, and values
-Are constantly in flux
-Differ across groups
Demographic trends
-Present opportunities and threats
-Population characteristics related to age, gender, family size, ethnicity, sexual
orientation, religion, and socioeconomic class
Technological Factors - CORRECT ANSWERApplication of knowledge
-To create new processes
-To create new products
Innovations in process technology:
-Lean manufacturing, Six Sigma quality, and biotechnology
Innovations in product technology:
-Smartphones, computer tablets, and high-performing electric cars such as the Tesla
Model S
Legal Factors - CORRECT ANSWEROfficial outcomes of political processes:
-Laws
-Mandates
-Regulations
-Court decisions
Industry deregulations affect multiple industries:
- Airlines, telecom, energy, and trucking
Governments can achieve desired outcomes:
-To buy electric vehicles the government offers a £2000 subsidy.
Porters five forces - CORRECT ANSWERAnalyses the nature of competition in the
industry in terms of how much power a firm enjoys over consumers, competitors and
suppliers.
Threat of Entry - CORRECT ANSWERThe risk that potential competitors will enter an
industry
Lowers industry profit potential:
Importance of Analyzing the External Environment - CORRECT ANSWER-Managers
can mitigate threats.
-Managers can leverage opportunities.
-Gain understanding of potential impacts.
-Understand the source / proximity of factors.
The PESTEL Model - CORRECT ANSWER-Groups environmental factors into six
segments:
--Political
--Economic
--Sociocultural
--Technological
--Ecological
--Legal
These factors can create:
--Opportunities
--Threats
Political Factors - CORRECT ANSWER-Processes & actions of government bodies
-Firms can shape this factor through:
--Lobbying
--Public Relations
--Contributions
--Litigation
Example: Tesla
-Has a build-to-order sales model
-Cuts out dealers
-Dealers are lobbying for new legislation
Economic Factors - CORRECT ANSWER-Largely macro-economic
Examples include:
, --Growth rates
--Levels of employment
--Interest rates
--Price stability
--Currency exchange rates
Sociocultural Factors - CORRECT ANSWERSociety's cultures, norms, and values
-Are constantly in flux
-Differ across groups
Demographic trends
-Present opportunities and threats
-Population characteristics related to age, gender, family size, ethnicity, sexual
orientation, religion, and socioeconomic class
Technological Factors - CORRECT ANSWERApplication of knowledge
-To create new processes
-To create new products
Innovations in process technology:
-Lean manufacturing, Six Sigma quality, and biotechnology
Innovations in product technology:
-Smartphones, computer tablets, and high-performing electric cars such as the Tesla
Model S
Legal Factors - CORRECT ANSWEROfficial outcomes of political processes:
-Laws
-Mandates
-Regulations
-Court decisions
Industry deregulations affect multiple industries:
- Airlines, telecom, energy, and trucking
Governments can achieve desired outcomes:
-To buy electric vehicles the government offers a £2000 subsidy.
Porters five forces - CORRECT ANSWERAnalyses the nature of competition in the
industry in terms of how much power a firm enjoys over consumers, competitors and
suppliers.
Threat of Entry - CORRECT ANSWERThe risk that potential competitors will enter an
industry
Lowers industry profit potential:
