*

* Helps organization to identify Opportunities

and Threats

* To consolidate and strengthen organizations

position

* Provides the strategists of which sectors have a

favourable impact on the organization

* Organization knows where its stands with

respect to its environment

* Helps in formulating

appropriate strategy

*
2

27-11-2010

* Surroundings, external objects, influences or

circumstances under which someone or
something exits

*
3

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* Socio-cultural factors
* Demographic characteristics
* Social attitudes
* Educational level, awareness and consciousness
of rights

*
4

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* Environmental Factors

* Weather change
* Climatic change
* Demand related factors

* Supplier related factors

*
5

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* Political factors

* Political system
* Political structure, its stability
* Government policy and its intervention

*
6

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* Legal Factors

* Policies related to licensing , monopolies

* Policies related to export and import
* Policies related to distribution and pricing

*
7

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*
8

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* Dividing the environment into different

sectors.

* Analysing the impact of each sector on the

organization.

* Subdividing each environmental sector into sub

factor.

* Impact of each sub sector on organization in

form of a statement.

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+Help to determine the key threats

and

opportunities.

+Good tool to qualify the factors related to

companys strategy.

+Can consider many factors for each special

case.

*
10

27-11-2010

- It doesnt show the interaction between the

factors.

- It cant reflect the dynamic environment.

- Its a subjective analysis tool.

*
11

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Marketing
Intermediaries
Availability of
skilled
workers

Industrial
relation
climate

Suppliers

Micro
Environment

Regulatory
Provisions

Market
Types

Market
Demand

Financial
Institutions

Competition

12

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*
13

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*
14

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Trends

Probability
of
Occurrences

Impact on strategies
S1

S2

S3

T1
T2
.
.
+2
+1
0
-1
-2

Extremely favorable impact

Moderately favorable impact
No impact
Moderately unfavorable impact
Extremely unfavorable impact

Degree of quality
of impact on each
trend on different
strategies

*
15

27-11-2010

Macro Environment
Micro Environment

Relevant Environment

Internal Environment

Firm

*
16

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17

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Sales of Passenger Cars in India is likely to grow at an

average of 14.9% each year to touch the 2.1 million mark
by 2011
(Source: Frost n Sullivan)

18

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19

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S.
No.

Environmental Factors

1.

Macro-Economic Factors
-Per capita Income
-Loans
Availability
- Interest Rates

Opportunity
/Threat

Reasons/Remarks

Rising PCI means more

affordability. (Sixth Pay
Commission)
Banks are not sceptical in giving
loans.

People cant pay easy

instalments
2.

Social/ Demographics
Factors
-Urbanization
( 28% to 40% by 2020 )
Middle Class Increasing
-Penetration Levels
-Labor (JVs)

-Growing Working Class

(Ex. BPO)
-Improving Public Transport

20

Demand for Passenger cars

Sales are increasing at a YOY of
over 60 % in the long run.
LOW (10 per 1000)
India has one of the cheapest
labour available hence many
foreign companies are eyeing to
merge with Indian players.
Resulted in more no of cabs.
With an advent of projects like
Delhi Metro .
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S.
No
.

Environmental Factors

3.

Policy
-Import Duty
-Excise Duties

Opportunity
/Threat

-FDI
-Regulatory Issues like
Acts, Safety Standards etc.

4.

Technology
-Emission Standards

-Hybrid Cars

-Fuels

-IT (CAD/CAM, Design and

Automation)

21

Reasons/Remarks

Currently import duty is

100%.
Excise duty has been
reduced from 16 %to 14%.
100 % FDI is allowed .
MVA 1988 and MVR 1989
which promotes use capital
intensive technology
Bharat III resulting in
dependence on other
countries for technology
Excise duty has been
reduced from 24 % to 12 %.
With upcoming Bio- fuels
,LPG & CNG.
India has one of the 27-11-2010
cheapest IT Resources.

S.
No.

Environmental Factors

5.

Industrial Factors

Opportunity

/Threat

Steel Prices have touched

Rs 5000 since May 2010

-ROCE

With players like Hyundai and

TATA having ROCE of 9% and
32%.

-Expansion Plans of Incumbent

players

-Raw material price

6.

Reasons/Remarks

Business Environment

In future has huge capacity

plans which will give the
incumbent companies a cost
advantage.

22

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*Presented By,
>Deval Naik
>Ashley T
>Tushar Sharma
>Rohit Kulkarni

*
23

27-11-2010