Chapter 3 The External Assessment.ppt

1、Copyright 2007 Prentice Hall,Ch 3 -1,Chapter 3 The External Assessment,Strategic Management: Concepts & Cases 11th Edition Fred David,Copyright 2007 Prentice Hall,Ch 3 -2,Chapter Outline,The Nature of the External Audit,The Industrial Organization (I/O) View,Social, Cultural, Demographic & Environme

2、ntal Forces,Copyright 2007 Prentice Hall,Ch 3 -3,Chapter Outline (contd),Political, Governmental, and Legal Forces,Technological Forces,Competitive Forces,Copyright 2007 Prentice Hall,Ch 3 -4,Chapter Outline (contd),Porters Five-Forces Model,Sources of External Information,Forecasting Tools & Techni

3、ques,Copyright 2007 Prentice Hall,Ch 3 -5,Chapter Outline (contd),Global Challenge,The External Factor Evaluation (EFE) Matrix,Competitive Profile Matrix (CPM),Copyright 2007 Prentice Hall,Ch 3 -6,It is not the strongest of the species that survive, nor the most intelligent, but the one most respons

4、ive to change. Charles Darwin,External Assessment,Nothing focuses the mind better than the constant sight of a competitor who wants to wipe you off the map. Wayne Calloway, Former CEO, PepsiCo,Copyright 2007 Prentice Hall,Ch 3 -7,External Strategic Management Audit,- Environmental Scanning- Industry

5、 Analysis,Copyright 2007 Prentice Hall,Ch 3 -8,Identify & Evaluate factors beyond the control of a single firm Increased foreign competition Population shifts Aging society Fear of traveling Stock market volatility,External Strategic Management Audit,Copyright 2007 Prentice Hall,Ch 3 -9,Purpose of E

6、xternal Audit Identify Opportunities Threats,External Strategic Management Audit,Copyright 2007 Prentice Hall,Ch 3 -10,Key External Forces,Economic forces Social, cultural, demographic & environmental forces Political, governmental & legal forces Technological forces Competitive forces,Copyright 200

7、7 Prentice Hall,Ch 3 -11,Competitors Suppliers Distributors Creditors Customers Employees Communities Managers Stockholders Labor Unions Special Interest Groups Products Services Markets Natural Environment,KeyExternalForces,Opportunities & Threats,Key External Forces & the Organization,Copyright 20

8、07 Prentice Hall,Ch 3 -12,Gather competitive intelligence Social Cultural Demographic Environmental Governmental Legal Technological,External Audit,Copyright 2007 Prentice Hall,Ch 3 -13,External Audit Sources of Information,Internet Libraries Suppliers Distributors Salespersons Customers Competition

9、,Copyright 2007 Prentice Hall,Ch 3 -14,Performing External Audit,- Key Factors Vary over time Vary by industry,Copyright 2007 Prentice Hall,Ch 3 -15,Performing External Audit - Variables,Market share Breadth of competing products World economies Foreign affiliates Proprietary account advantages,Copy

10、right 2007 Prentice Hall,Ch 3 -16,Performing External Audit - Variables,Price competitiveness Technological advancements Interest rates Pollution abatement,Copyright 2007 Prentice Hall,Ch 3 -17,Performing External Audit,External Factors,Measurable,Long-term orientation,Applicable to competing firms,

11、Hierarchical,Copyright 2007 Prentice Hall,Ch 3 -18,Industrial Organization (I/O) View,- Industry factors more important than internal factors Performance determined by industry forces,Copyright 2007 Prentice Hall,Ch 3 -19,Economies of Scale,Industry Properties,Barriers to market entry,Product differ

12、entiation,Level of competitiveness,I/O Perspective Firm Performance,Copyright 2007 Prentice Hall,Ch 3 -20,Research Findings,“Approximately 20% of a firms profitability can be explained by the industry, whereas 36% of the variance in profitability is attributed to the firms internal factors”,Copyrigh

13、t 2007 Prentice Hall,Ch 3 -21,Economic Forces,Copyright 2007 Prentice Hall,Ch 3 -22,Economic Forces,Trends in the dollars value European Union Layoffs Economic standard of living,Copyright 2007 Prentice Hall,Ch 3 -23,Economic Standard of Living,Copyright 2007 Prentice Hall,Ch 3 -24,Russias Economy,P

14、olitical bureaucracy Illegal actions by officials and policemen State-run gas; monopoly purchase of newspaper Foreign direct investment,Copyright 2007 Prentice Hall,Ch 3 -25,Economic Forces,Availability of credit Level of disposable income Interest rates Inflation rates,Copyright 2007 Prentice Hall,

15、Ch 3 -26,Social, Cultural, Demographic & Environmental Forces,Major Impact Products Services Markets Customers,Copyright 2007 Prentice Hall,Ch 3 -27,Social, Cultural, Demographic & Environmental Forces,U.S. Facts Aging population Less Caucasian Widening gap between rich & poor 2025 = 18.5% populatio

16、n 65 years 2075 = no ethnic or racial majority,Copyright 2007 Prentice Hall,Ch 3 -28,Social, Cultural, Demographic & Environmental Forces,Facts World population approaching 7 billion World population = 8 billion by 2028 World population = 9 billion by 2054 U.S. population 300 million,Copyright 2007

17、Prentice Hall,Ch 3 -29,Trends More American households with people living alone By 2021 Hispanics will be largest minority group Aging Americans affects all organizations Population shift to the south and west Less interested in fitness and exercise Decimation and degradation of the natural environm

18、ent,Social, Cultural, Demographic & Environmental Forces,Copyright 2007 Prentice Hall,Ch 3 -30,U.S. Mexico Border,North Americas fastest growing region 1,500 maquiladoras No longer largest exporter to U.S.,Copyright 2007 Prentice Hall,Ch 3 -31,Social, Cultural, Demographic & Environmental Forces,Glo

19、bal trends 2003 China largest exporter to U.S. 2003 Asia receives highest foreign direct investment Cheaper labor and utilities than Mexico China joined WTO,Copyright 2007 Prentice Hall,Ch 3 -32,Global trends Chinas labor rates less than Mexico China provides more site location incentives than Mexic

20、o,Social, Cultural, Demographic & Environmental Forces,Copyright 2007 Prentice Hall,Ch 3 -33,Social, Cultural, Demographic & Environmental Forces,More educated consumers Aging population Minorities more influential Local rather than federal solutions,21st Century Trends,Copyright 2007 Prentice Hall,

21、Ch 3 -34,Social, Cultural, Demographic & Environmental Forces (contd),Fixation with youth decreasing Hispanics increase to 15% by 2021 African American increase to 14% by 2021,21st Century Trends,Copyright 2007 Prentice Hall,Ch 3 -35,Key Social, Cultural, Demographic & Environmental Variables,Number

22、 of marriages & divorces,Number of special interest groups,Number of births & deaths,Immigration & emigration rates,Childbearing rates,Copyright 2007 Prentice Hall,Ch 3 -36,Actuarial rates,Monitor Key Variables,Per capita income,Attitudes toward business,Avg. disposable income,Social, Cultural, Demo

23、graphic & Environmental Forces,Copyright 2007 Prentice Hall,Ch 3 -37,Consumer behavior,Monitor Key Variables,Ethical concerns,Attitudes toward saving,Racial equality,Social, Cultural, Demographic & Environmental Forces,Copyright 2007 Prentice Hall,Ch 3 -38,Avg. educational level,Monitor Key Variable

24、s,Governmental regulation,Attitudes toward customer service,Attitudes toward quality,Social, Cultural, Demographic & Environmental Forces,Copyright 2007 Prentice Hall,Ch 3 -39,Energy conservation,Monitor Key Variables,Social responsibility,Leisure time values,Recycling,Social, Cultural, Demographic

25、& Environmental Forces,Copyright 2007 Prentice Hall,Ch 3 -40,Waste management,Monitor Key Variables,Air & water pollution,Ozone depletion,Endangered species,Social, Cultural, Demographic & Environmental Forces,Copyright 2007 Prentice Hall,Ch 3 -41,Political, Government & Legal Forces,Key opportuniti

26、es & threats Antitrust legislation Tax rates Lobbying efforts Patent laws,Government Regulation,Copyright 2007 Prentice Hall,Ch 3 -42,Political, Government & Legal Forces,Political variables impact Formulation of strategies Implementation of strategies,Increasing Global Interdependence,Copyright 200

27、7 Prentice Hall,Ch 3 -43,Political, Government & Legal Forces,Strategists in a global economy Forecast political climates Legalistic skills Diverse world cultures,Increasing Global Interdependence,Copyright 2007 Prentice Hall,Ch 3 -44,Political, Government & Legal Forces,Worldwide trend toward simil

28、ar consumption patterns Global buyers and sellers E-commerce Technology for instant currency transfers,Globalization of Industry,Copyright 2007 Prentice Hall,Ch 3 -45,Key Political, Governmental, & Legal Variables,Special tariffs,Tax law changes,PACs,Voter participation rates,Regulation/deregulation

29、,Copyright 2007 Prentice Hall,Ch 3 -46,Key Political, Governmental, & Legal Variables (contd),Environmental protection laws,Changes in patent laws,Equal employment legislation,Government subsidies,Number of patents,Copyright 2007 Prentice Hall,Ch 3 -47,Key Political, Governmental, & Legal Variables

30、(contd),Import/export regulations,Global relationships,Political conditions,Location and severity of terrorist activity,Anti-trust enforcement,Copyright 2007 Prentice Hall,Ch 3 -48,Technological Forces,Major Impact Internet Communications Semiconductors,Copyright 2007 Prentice Hall,Ch 3 -49,Technolo

31、gical Forces,Significance of IT Chief Information Officer (CIO) Chief Technology Officer (CTO),Copyright 2007 Prentice Hall,Ch 3 -50,Technological Forces,Essential for nearly every strategic decision,Technology-based issues,Copyright 2007 Prentice Hall,Ch 3 -51,Competitive Forces,Collection & evalua

32、tion of data on competitors is essential for successful strategy formulation,Copyright 2007 Prentice Hall,Ch 3 -52,Competitive Forces,Competition on virtually all industries can be described as intense.,Copyright 2007 Prentice Hall,Ch 3 -53,Competitive Forces,Strengths Weaknesses Capabilities Opport

33、unities Threats Objectives Strategies,Identifying Rival Firms,Copyright 2007 Prentice Hall,Ch 3 -54,Key Questions Concerning Competitors,Their objectives and strategies,Their weaknesses,Their responses to external variables,Their vulnerability to our alternative strategies,Their strengths,Copyright

34、2007 Prentice Hall,Ch 3 -55,Key Questions Concerning Competitors (contd),Entry and exit of firms in the industry,Our product/service positioning,Key factors for our current position in industry,Sales/profit rankings of competitors over time,Our vulnerability to strategic counterattack,Copyright 2007

35、 Prentice Hall,Ch 3 -56,Key Questions Concerning Competitors (contd),The threat of substitute products/services,Nature of supplier & distributor relationships,Should we keep our strategies secret from employees and stakeholders?,Copyright 2007 Prentice Hall,Ch 3 -57,Competitive Forces,Moodys Manuals

36、 Standard Corporation Descriptions Value Line Investment Surveys Duns Business Rankings Standard & Poors Industry Surveys Industry Week Forbes, Fortune, Business Week,Sources of Corporate Information,Copyright 2007 Prentice Hall,Ch 3 -58,Competitive Forces,Market share matters Understand what busine

37、ss you are in Broke or not, fix it Innovate or evaporate,7 Characteristics of most Competitive U.S. Firms:,Copyright 2007 Prentice Hall,Ch 3 -59,Competitive Forces,Acquisition is essential to growth People make a difference No substitute for quality,7 Characteristics of most Competitive U.S. Firms:,

38、Copyright 2007 Prentice Hall,Ch 3 -60,The Five-Forces Model of Competition,Potential development of substitute products,Rivalry among competing firms,Bargaining power of suppliers,Potential entry of new competitors,Bargaining power of consumers,Copyright 2007 Prentice Hall,Ch 3 -61,Steps to Determin

39、e if an Acceptable Profit Can be Earned,Identify key aspects or elements of each competitive force Evaluate how strong and important each element is for the firm Decide whether the collective strength of the elements is worth the firm entering or staying in the industry,Copyright 2007 Prentice Hall,

40、Ch 3 -62,The Five-Forces Model,Most powerful of the five forces Focus on competitive advantage of strategies,Rivalry Among Competing Firms,Copyright 2007 Prentice Hall,Ch 3 -63,The Five-Forces Model,Barriers to entry are important Quality, pricing, and marketing can overcome barriers,Potential Entry

41、 of New Competitors,Copyright 2007 Prentice Hall,Ch 3 -64,The Five-Forces Model,Pressures increase when consumers switching costs decrease Firms plans for increased capacity & market penetration,Potential Development of Substitute Products,Copyright 2007 Prentice Hall,Ch 3 -65,The Five-Forces Model,

42、Large number of suppliers & few substitutes affects intensity of competition Backward integration can gain control or ownership of suppliers,Bargaining Power of Suppliers,Copyright 2007 Prentice Hall,Ch 3 -66,The Five-Forces Model,Customers concentrated or buying in volume affects intensity of compe

43、tition Consumer power is higher where products are standard or undifferentiated,Bargaining Power of Consumers,Copyright 2007 Prentice Hall,Ch 3 -67,Conditions where Consumers Gain Bargaining Power,If they can inexpensively switch If they are particularly important If sellers are struggling in the fa

44、ce of falling consumer demand If they are informed about sellers products, prices and costs. If they have discretion in whether and when they purchase the product.,Copyright 2007 Prentice Hall,Ch 3 -68,Forecasting Tools and Techniques,Forecasts are educated assumptions about future trends and events

45、 Quantitative techniques Most appropriate when historical data is available and there is a constant relationship Qualitative techniques,Copyright 2007 Prentice Hall,Ch 3 -69,The Global Challenge,Faced by U.S. Firms - Gain & maintain exports to other nations Defend domestic markets against imported g

46、oods,Copyright 2007 Prentice Hall,Ch 3 -70,The Global Challenge,Simultaneously globally competitive & nationally responsive,Multinational Corporations (MNCs),Copyright 2007 Prentice Hall,Ch 3 -71,The Global Challenge,Worldwide integration of: Strategy formulation Strategy implementation Strategy eva

47、luation,Globalization,Copyright 2007 Prentice Hall,Ch 3 -72,The Global Challenge,Similar consumption patterns Global buyers and sellers E-commerce Instant transmission of money & information,Globalization of Industries,Copyright 2007 Prentice Hall,Ch 3 -73,Industry Analysis: The External Factor Eval

48、uation (EFE) Matrix,Summarize & Evaluate,Copyright 2007 Prentice Hall,Ch 3 -74,Copyright 2007 Prentice Hall,Ch 3 -75,Copyright 2007 Prentice Hall,Ch 3 -76,Total weighted score of 4.0 Organization response is outstanding to threats and weaknesses,Industry Analysis EFE,Total weighted score of 1.0 Firm

49、s strategies not capitalizing on opportunities or avoiding threats,Copyright 2007 Prentice Hall,Ch 3 -77,Industry Analysis EFE,Understanding the factors used in the EFE Matrix is more important than the actual weights and ratings assigned.,Important -,Copyright 2007 Prentice Hall,Ch 3 -78,Industry Analysis: Competitive Profile Matrix (CPM),Identifies firms major competitors and their strengths & weaknesses in relation to a sample firms strategic positions,Copyright 2007 Prentice Hall,