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Strategic Analysis of the External Environment

Strategic Analysis of the External Environment. Kevin Hinde. Aims. we will be examining some of the techniques used by organisations to explore the complex and uncertain external environment over the short, medium and long term. Learning Outcomes.

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Strategic Analysis of the External Environment

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  1. Strategic Analysis of the External Environment Kevin Hinde

  2. Aims • we will be examining some of the techniques used by organisations to explore the complex and uncertain external environment over the short, medium and long term.

  3. Learning Outcomes • Identify a number of techniques for assessing the external environment. • Undertake a PESTEL analysis of your organisation and compare it with those from other organisations. • Work through a web based assignment on scenario planning • demonstrate awareness of the complexities involved in assessing dynamic environments.

  4. A Copernican view of the Organisation.

  5. A Ptolemaic view

  6. Why Environmental Analysis? • To provide information on emerging issues and trends. • to develop networks and partnerships among the scanners and their organisations • To educate the participants about the scanning function and about specific issues and trends • To provide useful information for the strategy process. Bryson (1995)

  7. Bryson (1995) It is important too that • key issues are selected. • The issues cycle is understood • (i.e. when fundamental policy questions or challenges that affect an organisation, or community’s, mandate, mission and values; product or service level mix; clients, users, or payers; or costs, financing, management or organisational design). • Arecord of the process is kept.

  8. Techniques for Monitoring the Environment

  9. Potential Entrants Threat of Entry Bargaining Power Competitive Rivalry Buyers Suppliers Bargaining Power Threat of Entry Substitutes Porter's Five Forces Model Source: Porter (1985)

  10. Techniques for determining future trends • Scenario Planning. • The Delphi method.

  11. 1 Choose a Panel of Experts 2 Phrase the questions or issues, or describe the possible futures on which an opinion has to be sought 1a Consult experts on questions, issues and possible futures to be considered 3 Panelists, individually and anonymously, express their views on the questions or issues, or on the likelihood of the different futures. 4 Results are collate and summarised. 6a Repeat steps 4, 5 and 6 if necessary to reach consensus. 6b If necessary, ask those who still hold extreme views to feed in, anonymously, the reasons for their views. 5 Results are fed back to the panelists. No individual views are capable of identification. 6 Panelists submit revised views The Delphi Technique Source: Smith (1994) p.67 7 Results are written up, conclusions drawn

  12. Auditing the Future: Bryson (pps. 87- 89) • Social and organisational complexity. • Privatisation and the consequent interaction among public, private and non-profit organisations. • Continuation of technological change. • Limited public sector resources and Growth. • Diversity of of the Workforce, customer base, and citizenry. • Individualism, personal responsibility, and community involvement. • Quality of life and environmentalism. • Transitions with continuity, not revolution.

  13. TRENDS PERCEPTIONS SCENARIOS RESOURCE SCARCITY TECHNOLOGY COMPETITION DEMOGRAPHY ECONOMIC AWARENESS Re-emphasis on the nature of public service delivery Re-positioning of public service functions POLITICAL DYNAMIC NEW POLITICAL INSTITUTIONS EUROPE CONSUMERISM (ANTI-MONOPOLY) REGULATORY EXPANSION Scenarios for Public Services: Based on work by past students Public Services in 2015?

  14. Web Exercise: Scenario Planning

  15. And Finally... • Summary. • Have you covered the learning outcomes? • Any Questions?

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