IDENTIFICATION ANALYSIS CLASIFICATION

 Culture (Vision, Mission, Orientation, Strategy)

INTERNAL STRONG/GOOD
 Employee (Performance, Motivation, Expectation, Communication)
 Production (Man, Machine, Money, Method, and Information)
 Marketing (Price, Product, Place, Promotion)
 Financial (Profitability, Liquidity, Leverage, Activity)
 Etc. WEAK/BAD

ENVIRONMEN Immediate Industry and PORTER’S 5 FORCES Competitive

TAL Competitive Environments Pressures/bargaining power
ANALYSIS WEAK

SUBSTITUTES

SUPPLIERS SUBSTITUTES Competitive

Pressures/bargaining power
STRONG

COMPANY
SUPPLIERS RIVALRY BUYERS

EXTERNAL
RIVALS BUYERS

NEW ENTRANTS
NEW ENTRANTS

 General Economics
Macro Environments
 Global Forces
POSITIVE INFLUENCES
 Social forces
 Technological factors
 Political / Regulatory / Legal
Factors
ENVIRONMENTAL ANALYSIS  Natural Environments NEGATIVE INFLUENCES
FRAMEWORK  demographics
Seven Components of the macro-environment

Demographics  Includes the size, growth rate, and age distribution of different sectors of the
population.
 Geographic distribution of population, the distribution of income across the
population, and trends in these factors

Social forces  Social values, attitudes, cultural factors, and lifestyle that impact businesses
 Social forces vary by locale and change over time

Political, legal, and  Political policies and processes, as well as the regulations and laws with
regulatory forces which companies must comply

Natural  Ecological and environmental forces such as weather, climate, climate

environment change, and associated factors like water shortage

Technological  Pace of technological change and technical developments that have potential
factors for wide-range effect on society, such as genetic engineering, the rise of
internet, and changes in communication technology.
 They include activities and institutions involved in creating new knowledge
and controlling the use of technology.
 Technology change can encourage the birth of new industries.
Global forces  Conditions and changes in global markets, political events and policies toward
international trade.
 Sociocultural practices and the institutional environment in which global
markets operate.
 Global forces influence the degree on international trade and investments
through such mechanisms as trade barriers, tariffs, import restrictions, and
trade sanctions.
General economic  Economic factors at the local, state, national, or international level that affect
conditions firms and industries.
 Rate of economic growth, unemployment rate, inflation rates, interest rates,
trade deficits or surpluses, saving rate, and per capita domestic product.
 Condition in the market for stocks and bonds, which can affect consumer
confidence and discretionary income.
PORTER’S FIVE FORCES