Seminar 4: Introduction to the Business Environment

Stage 2 Session 1

Principles of Business

Overview

• Review of the whole module

• SWOT analysis

• PESTEL analysis

• LoNGPEST analysis

• Scenario Planning

• A major case study

2

Learning outcomesof this Seminar

• To be able to carry out a full environmental analysis on an organisation using the full range of techniques learned.

3

Why do organisations scan their environments?

• To be able to compete effectively.

• To be able to make better informed decisions.

• To understand where to strengthen the business.

• To be aware of the dynamic and changing nature of the environment they work in.

• To inform their overall long term and strategic planning approach.

• To highlight potential threats and opportunities within a timescale that enables effective action to be taken.

• Sometimes they get it wrong, as we see in the cases of Kodak, Nokia and others.

Carrying out a SWOT analysis

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

What are your strengths?What do you do better than others?

What unique capabilities and resources do you possess?

What do others perceive as your strengths?

What are your weaknesses?What do your competitors do better

than you?What could you improve given the

current situation?What do others perceive as your

weaknesses?

What trends or conditions may positively impact you?

What opportunities are available to you?

What trends or conditions may negatively impact you?

What are your competitors doing that may impact you?

Do you have solid financial support?What impact do your weaknesses

have on your threats?

INTE

RN

AL

EXTE

RN

AL

The PESTEL analysis

Local or national governmental

issues

Alliances and agreements between

countries

Changes in government and

approaches to business

Changes in regulation

Changes in employment law

Spending

Economic growth

Exchange rates

Employment statistics

Taxation changes

Health conscious society

Age demographics

Lifestyle changes

Fashion changes

Multi-culturalism

Religious changes

Information and Communications

technology

New Machinery

Changes in energy

Social networks

Green issues

Corporate Social responsibility

Attitudes towards charity

Attitudes towards waste

New laws, repeals of old laws

Regulation again

Licensing

Driving laws

Tendency to be more litigious

Another way of looking at it - LoNGPEST

Political Economic Socio-cultural

Technological

Local Local authorities and associations

Local economy Local communityaffairs

Difficult to segregate but rise in new communicationsTechnology, social networks etc

National National government and employer bodies

Central monetary and fiscal policies.Stock market

Demographicchange, immigration, culture

Global Alliances and agreements or disagreements

Trading blocsWorld money markets

Global demo-graphics, cross cultural issues, religious issues

Scenario Planning:

• A strategic planning tool used to make flexible long term plans.

• A way of looking at how events could shape the future.

• A way of identifying how significant events, the protagonists involved and the way they act will impact on the business.

• A way of helping organisations decide how best to face the future.

6 steps to Scenario Planning

www.jiscinfonet.ac.uk/tools/scenario-planning

1. SCOPINGWhat is the question you want to address?

3. BUILDING

SCENARIOS

Using your outcomes from the first two steps, build your

scenarios to explore.

2. TREND ANALYSIS

Consider the external forces in operation and consider the

pressures they play.

4. GENERATE OPTIONS

Consider the options available within the

scenarios -innovations,new services,

projects or opportunities.

5. TEST OPTIONS

Identify and discuss potential

implications and impacts of

scenarios on the identified options.

6. ACTION PLAN

Define an action plan as a result of these

activities.

Bringing it all together

• We have now looked at four different methods of analysing the organisational environment.

• Now is your chance to put it all into practice with one large case study.

Paxton and Giles

• You are a team of consultants brought in to undertake an analysis of the strategy of Paxton and Giles.

• It is up to you how you organise yourselves but you have:

• 10 minutes to reacquaint yourself with the case study.

• 30 minutes to undertake your analyses.

• 15 minutes to coordinate your thoughts.

• 15 minutes to present back on your findings and recommendations.

• End of Seminar