Business policies and Strategies Environmental and internal Scanning
Business Policies and Strategies Environmental and Internal Scanning
Sun Tzu Chinese Genera Know the enemy and know yourself; in a hundred battles you will never be in peril When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal. If ignorant of both your enemy and yourself, you are certain in every battle to be in pel
Sun Tzu Chinese General • “ Know the enemy and know yourself; in a hundred battles you will never be in peril. When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal. If ignorant of both your enemy and yourself, you are certain in every battle to be in peril
PESTEL Analysis Political-legal Economic Socio-cultural ethnologIcal Environmental Legal
PESTEL Analysis • Political – legal • Economic • Socio-cultural • Technological • Environmental • Legal
TOWS Analysis Threats -unfavorable conditions Opportunities- favorable conditions Weaknesses- limitations or deficiencies relative to the competition or the environment Strengths- resources, skills or advantages relative to the competition or the environment
TOWS Analysis • Threats – unfavorable conditions • Opportunities – favorable conditions • Weaknesses – limitations or deficiencies relative to the competition or the environment • Strengths – resources, skills or advantages relative to the competition or the environment
Threats · New market entrants Increased competition Increased power from buyers and suppliers Substitutes Economic cycle downturns Demographic changes
Threats • New market entrants • Increased competition • Increased power from buyers and suppliers • Substitutes • Economic cycle downturns • Demographic changes
Opportunities New markets and segments New products Diversification opportunities Market growth Competitor weakness Demographic and social change Change in environment
Opportunities • New markets and segments • New products • Diversification opportunities • Market growth • Competitor weakness • Demographic and social change • Change in environment
Weaknesses Few core strengths · Low market share Old plant or technology Weak finances and/or poor cash flow Lacking management skills Poor record on innovation Low quality and/or reputation Non-differentiated products
Weaknesses • Few core strengths • Low market share • Old plant or technology • Weak finances and/or poor cash flow • Lacking management skills • Poor record on innovation • Low quality and/or reputation • Non-differentiated products
Strengths · Market dominance Core strengths Economies of scale Low cost position Leadership and management skills Financial and cash reserves Manufacturing ability Reputation Differentiated products
Strengths • Market dominance • Core strengths • Economies of scale • Low cost position • Leadership and management skills • Financial and cash reserves • Manufacturing ability • Reputation • Differentiated products
Analysis of Financials Liquidity ratios-ability to meet short term obligations Leverage ratios -extent of debt financing Activity ratios -effective use of resources Profitability ratios -effectiveness of the firm Growth rates -ability to maintain economic position
Analysis of Financials • Liquidity ratios – ability to meet short term obligations • Leverage ratios – extent of debt financing • Activity ratios – effective use of resources • Profitability ratios – effectiveness of the firm • Growth rates – ability to maintain economic position
Industry analysis Potential Entrants Threat of N Rel Entrants Power of Unions Other Industry Stakeholders Competitors Bargaining Buyers yers Suppliers Rivalry Among Bargaining Existing Firms Power of Suppliers Threat of Substitute Products or Services Substitutes
Industry Analysis
