EXTERNAL

ENVIRONMENT ANALYSIS
N AT U R A L E N V I R O N M E N T,
S O C I E TA L E N V I R O N M E N T: G E N E R A L F O R C E
TA S K E N V I R O N M E N T: I N D U S T RY A N A LY S I S
Environmental Scanning
Environmental scanning is the monitoring,
evaluating, and disseminating of information from
the external and internal environments to key people
within the corporation.
Environmental analysis involves:
 External Environmental analysis
 Internal Environmental analysis
 External Environment
Analysis (EEA)
Natural Environment: physical resources, wildlife,
climate

External Societal Environmental Analysis

Environment (General Force): ETPS Framework /
al Analysis PESTEL Framework

Task Environmental Analysis: Industry

Analysis
 Societal Environmental
Analysis (1)
ETPS FRAMEWORK:
POLITICAL-LEGAL SOCIOCULTURAL
ECONOMIC FORCES TECHNOLOGICAL FORCES
FORCES FORCES

GDP Trends Total gov. spending Antitrust Lifestyle changes

Interest Rates for R&D regulation Career expect
Money Supply Total ind. spending Env. Protection Consumer
Inflation Rates for R&D laws activism
Unemployment Level Patent protection Tax laws Growth rate of
Wage/price control New products Foreign trade population
Devaluation/Reval Productivity regulations Regional shifts in
Energy available improvements Attitudes toward population
Disposable income through automation foreign company Birth rates
Societal Environmental
Analysis (2)
PESTEL FRAMEWORK:

POLITICAL
ECO
NOM
IC
INDUSTRY
G AL
LE STRATEGIC
GROUP

FIRM
R AL
U
ECO U LT
LO C
GI C CIO
AL SO

TECHNOLOGICAL
Scanning External Environment
Analysis of Societal Environment
[Economic, Sociocultural, Technological, Political-Legal Factors]

Market
Analysis

Community Competitor
Analysis Analysis

Supplier
Analysis
Selection of
Strategic Factors
Interest Group [Opportunities & Government
Analysis Threats] Analysis
Issues Priority Matrix
Probable Impact on Corporation

High Medium Low

High

High Priority High Priority Medium Priority

Probability of Occurrence

Medium

High Priority Medium Priority Low Priority

Low

Medium Priority Low Priority Low Priority

Industry Analysis: Task Environment
[Porter’s Five Forces Model]
Threat of New
Entrants

Bargaining Rivalry Among Bargaining Power

Power of Existing of Buyers
Suppliers Competitors

Threat of Substitute
Products or Services
Industry Analysis: Task Environment
[Porter’s Six Forces Model]
Threat of New
Other
Stakeholders
Entrants

Bargaining Rivalry Among Bargaining Power

Power of Existing of Buyers
Suppliers Competitors

Threat of Substitute
Products or Services
Rivalry among Existing Firms
 Number of competitors
 Rate of industry growth
 Product or service characteristics
 Amount of fixed costs
 Capacity
 Height of exit barriers: Exit barriers
 Diversity of rivals
Threat of New Entrants
 Economies of scale
 Product differentiation
 Capital requirements
 Switching costs
 Access to distribution channels
 Cost disadvantages independent of size
 Government policy
Threat of Substitute Products
or Services
Sometimes a difficult task, the identification
of possible substitute products or services
means searching for products or services
that can perform the same function, even
though they have a different appearance and
may not appear to be easily substitutable
 Bargaining Power of Buyers
 A buyer purchases a large portion of the seller’s product or service
 A buyer has the potential to integrate backward by producing the product
itself
 Alternative suppliers are plentiful because the product is standard or
undifferentiated
 Changing suppliers costs very little
 The purchased product represents a high percentage of a buyer’s costs, thus
providing an incentive to shop around for lower price
 A buyer earns low profits and is thus very sensitive to costs and service
differences
 The purchased product is unimportant to the final quality or price of a buyer’s
products or services
Bargaining Power of Suppliers
 The supplier industry is dominated by a few companies, but it sells to
many
 Its product or service is unique and/or it has built up switching costs
 Substitutes are not readily available
 Suppliers are able to integrate forward and compete directly with
their present customers
 A purchasing industry buys only a small portion of the supplier group’s
goods and services and is thus unimportant to the supplier.
TERIMA KASIH