Reporters:

Baas, Katrina Marie V.

Galleta, Jasmin C.
Gaa, Sam
Mangao, Mark
Ofrancia, Pauline Gail
Pango, Norshaif
Santos, Alfonso
LNVEINORTAMNE
GCNNANIS

YNUSDRTI
SALSYNIA
ENVIRONMENTAL SCANNING &
INDUSTRY ANALYSIS
 Environmental Scanning
The monitoring, evaluation, and dissemination
of information from external and internal
environments to key people within the
corporation.
 Environmental Monitoring
This means tracking the evolution of
environmental trends, sequence of events, or
streams of activities.
 Types of Environment
1) INTERNAL ENVIRONMENT
2) EXTERNAL ENVIRONMENT

Internal
External
 INTERNAL ENVIRONMENT
OTHER FACTORS
1. Physical Assets and Facilities
2. R&D and Technological Capabilities
3. Marketing Resources
4. Financial Factors
 EXTERNAL ENVIRONMENT
Two Types
a) Micro Environment
Consists of actors in the companys immediate
environment, that affects the performance of the
company.

b) Macro Environment
Consists of larger societal forces that affect all the
actors in companys micro environment.
 MICROENVIRONMENT
Also known as task environment and operating environment
Include
The suppliers
Marketing intermediaries
Competitors
Customers
Publics
More intimately linked with the company than macro factors
The micro forces need not necessarily affect all the firms in a
particular industry in the same way.
Some of the micro factors are particular to a firm
 MACRO ENVIRONMENT
Consists of larger societal forces that affect all the
actors in companys micro environment-namely
the demographic, economic, natural, technological,
political and cultural forces

Also known as Societal Environment

The Societal Environment includes general forces

that do not directly touch on short-run activities of
the organization but that can, and often do,
influence its long-run decisions.
 Natural & Societal Environment
Natural Environment
Includes the physical resources, wildlife, and climate
that are in the inherent part of existence in the Earth

Societal Environment
This is mankinds social system that includes general
forces that do not directly touch on the short-run
activities of the organization that can influence its
long-run decisions.
 Forces that affect the industries:
1. Economic forces regulate the exchange of
materials, money, energy, and information

2. Technological forces generate problem-solving

inventions

3. Political-legal forces allocate power and

provide constraining laws and regulations

4. Sociocultural forces regulate the values and

customs of society
 Task Environment
Elements or groups that directly affect a corporation
and, in turn, are affected by it.

Examples: local communities, suppliers, competitors,

customers, employees
 Industry Analysis
An in-depth examination of key factors within a
corporations task environment
 STEEP Analysis
A STEEP analysis is potentially wide ranging because
considers any factors that are external to the
organisation being analyzed that may be relevant to
the analysis. Factors are categorized into
PESTEL Analysis
Sociocultural Political
Technological
Economic
Economic
Ecological Sociocultural
Political-legal Technological
Ecological
Legal
Socio-cultural Conditions
Data about people

Demographic conditions
Changes in values/attitudes
Changes in lifestyle
Attitudes toward work/spare time
Education conditions
Work environment conditions
Health conditions
Changes in income distribution
 Technological Conditions
Data about scientific and technological
developments

Spreading of and breakthroughin new technology

Public supported R&D- projects
Development in R&D
New patents and products
 Economic Conditions
Data about international, national, regional, and local
economies
Gross national product (GNP)
Inflation rate
Wage level
Other costs
Private consumptionand available income
Development of the rateof exchange
Public finances
Interest level
unemployment
 Environmental Conditions
Data related to energy, reusing and recycling,
protectingbiological bases, food protection, air and
water quality
Ecology
Pollution conditions
Green energy
Energy conservation
Waste handling
Carbon Credits
 Political Conditions
Data about government policies
Global, regional and national political development
(administration, political parties etc.)
Tax politics
Labour market politics
Development in trade andindustry politics in ASEAN and
national
Agricultural politics
Public interference
Trade political conditions
 Technological breakthroughs:
1. Portable information devices and electronic
networking
2. Alternative energy resources
3. Virtual personal assistants
4. Smart, mobile robots
 Sociocultural trends:
1. Increasing environmental awareness
2. Growing health consciousness
3. Expanding seniors market
4. Declining mass market
5. Changing pace and location of life
6. Changing household composition
7. Increasing diversity of workforce and markets
 IDENTIFYING EXTERNAL STRATEGIC
FACTORS
The origin of competitive advantage lies in the ability
to identify and respond to environmental change well.

One reason why some companies are better to adapt

than others:
Because of differences in the ability of managers to
recognize and understand external strategic issues and
factors.

Strategic myopia the willingness to reject unfamiliar

as well as negative information.
 Industry
A group of firms that produces a similar product or service

New Entrants
Have the desire to gain market share and substantial
resources and are, therefore, threats to an
established corporation

Entry Barrier
An obstruction that makes it difficult for a company
to enter an industry.
 Some of the possible barriers to
entry are:
1. Economies of scale
2. Product differentiation
3. Capital requirements
4. Switching costs
5. Access to distribution channels
6. Cost disadvantages independent of size
7. Government policy
 Substitute Product
A product that appears to be different but can
satisfy the same need as another product
 Complementor
A company or industry whose product works
well with a firms product and without which
the product would lose much of its value
 Industry Evolution
Fragmented industry- is when people often buy a
product, regardless of price, because it fulfills a unique need.
Example: Meat packing, furniture, hotels, auto repair,
landscaping

Consolidated industry - tend to possess high barriers to

entry, well established brands and, according to the text
books, possess high profit margins.

Examples include, automobile manufactures, pet toy stores,

DIY construction supply, aircraft manufactures
Categorizing International Industries
Multidomestic industries are specific to each
country or group of countries.
This type of international industry is a collection of
essentially domestic industries.

Global industries in contrast, operate

worldwide, with multinational corporation (MNC)
making only small adjustments for country-specific
circumstances.
An MNCs activities in one country is significantly
affected by its activities in other countries.
 Regional industry

The industry that lies between the two

extremes, with varying characteristics of both
multidomestic and global industries.
 Strategic Group
A set of business units or firms that pursue
similar strategies with similar resources.
 Strategic Type

A category of firms based on a common

strategic orientation and a combination of
structure, culture, and processes consistent
with that strategy.
 Strategic type has the following
characteristics
Prospectors are first-mover companies that focus on
product innovation and market opportunities.

Defenders companies that focus on improving the

efficiency of their existing operations.

Analyzers are corporations that operate in at least two

different product-market areas, one stable and one
variable.

Reactors are corporations that lack a consistent strategy-

structure-culture relationship.
 Hypercompetition
According to D'Aveni: In hypercompetition , the
frequency, boldness, and aggressiveness of dynamic
movement by the players accelerates to create a
condition of constant disequilibrium and change.
 Using Key Success Factors to
Create an Industry Matrix
Key success factors - are variables that can
significantly affect the overall competitive
position of companies within any particular
industry.
 Industry matrix
Summarizes the key success factors within a
particular industry.
 Competitors
Companies that offer same, similar, or
substitutable products or services in the
business area in which a particular company
operates.
 Competitive Intelligence
A formal program of gathering information on
a company's competitors.
 Forecasting VS.
Environmental Scanning
Environmental scanning provides reasonably hard
data on the present situation and current trends,
but intuition and luck are needed o accurately
predict whether these trends will continue.

The resulting forecasts are, however, usually

based on a set of assumptions that may or may
not be valid.
 Useful Forecasting Techniques
1. Extrapolation - is the extension of present trends
in the future.
2. Brainstorming - a non-quantitative approach
that requires simply the presence of some
people with the knowledge of the situation to be
predicted.
3. Expert opinion - a non-quantitative approach in
which experts in a particular area attempt to
forecast likely developments.
 Useful Forecasting Techniques
4. Delphi technique - in which separated experts
independently assess the likelihood of specified events.

5. Statistical modeling - a quantitative technique that

attempts to discover causal or at least explanatory factors
that link two or more time series together.

6. Prediction markets - is a recent forecasting technique

enabled by easy access to the Internet.

7. Scenario writing - most widely used forecasting technique

after trend extrapolation.
 Industry scenario
A forecasted description of a particular
industry's likely future.
 Synthesis of External Factors -
EFAS
External Factors Analysis Summary (EFAS) - is one
way to organize the external factors into the
generally accepted categories of opportunities and
threats as well as how well a particular company's
management is responding to these specific factors
in light of the perceived importance of these factors
to the company.