Unit 2,3,4

• Importance of environmental scanning :

  ● Identification of Opportunities and Threats

  ● Strategic Planning and Decision-making

  ● Adaptation to Changing Conditions

  ● Competitive Advantage

  ● Innovation and R&D Opportunities

  ● Risk Management

  ● Regulatory Compliance

  ● Resource Allocation

  ● Long-Term Sustainability
• Techniques to be considered in environmental scanning :

  ● SWOT Analysis: Assessing strengths, weaknesses, opportunities, and

  threats.

  ● PESTLE Analysis: Examining Political, Economic, Social, Technological,

  Legal, and Environmental factors.

  ● Competitor Analysis: Identifying competitors' strategies, strengths, and weaknesses.

  ● Market Research: Gathering data on market trends, customer preferences, and industry shifts.

  ● Trend Analysis: Identifying emerging trends and their potential impact.

  ●Technology Monitoring: Tracking advancements and innovations relevant to the industry.
• Techniques to be considered in environmental scanning :

  ● Regulatory Monitoring: Keeping abreast of changes in laws and regulations affecting the industry.

  ● Global Economic Analysis: Assessing international economic trends and their implications.
• According to Porter, there are five forces that represent the key sources

  of competitive pressure within an industry They are:

  ● Competitive Rivalry.

  ● Supplier Power.

  ● Buyer Power.

  ● Threat of Substitution.

  ● Threat of New Entry.
• Threat of New Entrants

  • Analyzes barriers to entry such as economies of scale, brand loyalty, and government regulations
• Bargaining Power of Suppliers


  • Examines the influence suppliers have on pricing and terms, considering factors like supplier concentration and switching costs
• Bargaining Power of Buyers


  • Assesses the influence buyers wield in negotiating prices and terms, considering factors like buyer concentration and price sensitivity
• Threat of Substitutes


  • Considers the availability of alternative products or services that could meet the same need, impacting demand and pricing
• Intensity of Competitive Rivalry

  • Evaluates the level of competition within the industry, considering factors like number of competitors, industry growth rate, and differentiation
• Strategic alliances


  Cooperative agreements between two or more organizations to pursue mutually beneficial goals while maintaining their independence
• Strategic alliances


  • Leverage each partner's strengths, resources, and capabilities to achieve strategic objectives
  • Collaboration between two or more organizations to achieve common goals
  • Access complementary resources, capabilities, technologies, or markets that they may not possess individually
  • Pooling resources and expertise to create value, enhance competitiveness, and achieve strategic objectives more effectively than they could on their own
• Common goals of strategic alliances

  • Entering new markets
  • Developing new products
  • Reducing costs
  • Sharing risks
• SWOT Analysis


  • Assesses Strengths, Weaknesses, Opportunities, and Threats to inform strategic planning
  • Helps organizations identify internal strengths and weaknesses and external opportunities and threats
• PESTLE Analysis


  • Evaluates Political, Economic, Social, Technological, Legal, and Environmental factors that may impact an organization's strategy
  • Provides a comprehensive understanding of the external environment
• Porter's Five Forces


  • Analyzes the competitive forces within an industry: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products or services, and competitive rivalry
  • Helps organizations assess industry attractiveness and competitive dynamics
• Ansoff Matrix


  • Outlines four growth strategies: market penetration, market development, product development, and diversification
  • Helps organizations decide on the direction for growth based on market and product considerations
• Balanced Scorecard


  • Aligns strategic objectives with key performance indicators across four perspectives: financial, customer, internal processes, and learning and growth
  • Helps organizations translate strategy into actionable objectives and measure performance
• The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic analysis tool used to evaluate the strategic position of a business's portfolio of products or services. It categorizes products based on their market growth rate and relative market share, providing insights into where resources should be allocated and

  how products should be managed.
• Scenario Planning


  • Involves creating multiple scenarios or plausible futures to anticipate and prepare for different outcomes
  • Helps organizations develop flexible strategies that can adapt to various situations
• Agile Strategy


  • Borrowing principles from agile software development, emphasizes adaptability, collaboration, and iterative decision-making
  • Involves breaking down long-term plans into smaller, manageable initiatives and adjusting strategy based on feedback and changing
• BCG Matrix


  A framework used to analyse a company's product portfolio
• Quadrants of the BCG Matrix

  • Stars
  • Question Marks (or Problem Children)
  • Cash Cows
  • Dogs
• Stars


  • Products with a high market share in a high-growth market
  • Generate substantial revenue
  • Have the potential to become cash cows if their market growth rate slows down
• The GE 9 Cell Matrix, also known as the GE-McKinsey Matrix, is a strategic analysis tool used to evaluate a business portfolio based on two dimensions: industry attractiveness and business unit strength. It was developed by the General Electric Company in collaboration with the consulting firm McKinsey & Company. The matrix consists of a 3x3 grid, with one axis representing industry attractiveness and the other representing business unit strength. Each axis is divided into three categories, resulting in nine cells. The categories typically range from low to medium

  to high.
• Question Marks (or Problem Children)

  • Products with low market share in high-growth markets
  • Require significant investment to increase their market share and turn them into stars
  • Have the potential to become cash cows if successful
• Cash Cows


  • Products with a high market share in a low-growth market
  • Generate significant cash flow and profits
  • Require minimal investment
  • Mature products that have already captured a significant market share
• Dogs


  • Products with low market share in a low-growth market
  • Typically do not generate much revenue and may even incur losses
  • Have limited growth potential
  • May need to be phased out or divested unless they serve a strategic purpose such as complementing other products or providing synergies
• Cells in the GE 9 Cell Matrix

  • High Industry Attractiveness, Strong Business Unit
  • Medium Industry Attractiveness, Strong Business Unit
  • Low Industry Attractiveness, Strong Business Unit
  • High Industry Attractiveness, Medium Business Unit Strength
  • Medium Industry Attractiveness, Medium Business Unit Strength
  • Low Industry Attractiveness, Medium Business Unit Strength
  • High Industry Attractiveness, Weak Business Unit
  • Medium Industry Attractiveness, Weak Business Unit
  • Low Industry Attractiveness, Weak Business Unit
• High Industry Attractiveness, Strong Business Unit


  Business units operating in highly attractive industries where the company has a strong competitive position. These units are considered prime candidates for investment and growth strategies.
• Medium Industry Attractiveness, Strong Business Unit

  Business units operating in moderately attractive industries where the company holds a strong competitive position. They typically require moderate investment to maintain or strengthen their positions.
• Low Industry Attractiveness, Strong Business Unit


  Despite operating in less attractive industries, business units in this cell have strong competitive positions. They may require minimal investment and are often candidates for selective growth or divestiture.
• High Industry Attractiveness, Medium Business Unit Strength


  Business units operating in highly attractive industries, but the company's competitive position is not as strong. They may require significant investment to improve their competitive position and capitalize on industry attractiveness.
• Medium Industry Attractiveness, Medium Business Unit Strength

  Business units operating in moderately attractive industries, and the company's competitive position is average. Strategic decisions for these units often involve maintaining market share and improving profitability.
• Low Industry Attractiveness, Medium Business Unit Strength


  These business units operate in less attractive industries, and the company's competitive position is average. They may require careful consideration regarding resource allocation and strategic direction.
• 7-S Framework:

  The 7-S Framework, developed by management consultants Tom Peters and Robert Waterman at McKinsey & Company in the late 1970s, is a strategic management tool used to analyze and align various elements within an organization. The framework consists of seven interrelated factors, all starting with the letter "S," which are categorized into hard elements (tangible and easier to define) and soft elements (intangible and harder to measure).
• High Industry Attractiveness, Weak Business Unit


  Business units operating in highly attractive industries, but the company has a weak competitive position. They require significant investment and strategic initiatives to improve their competitive position and capture market opportunities.
• Medium Industry Attractiveness, Weak Business Unit

  Business units operating in moderately attractive industries, but the company's competitive position is weak. They may require restructuring, strategic partnerships, or other initiatives to enhance competitiveness.
• Low Industry Attractiveness, Weak Business Unit


  This cell represents business units operating in less attractive industries where the company has a weak competitive position. These units may be candidates for divestiture or restructuring to reallocate resources to more promising opportunities.
• Strategy


  The organization's overall plan for achieving its objectives and gaining a competitive advantage. It involves making choices about where to compete, how to differentiate, and how to allocate resources effectively. Strategy provides the direction for the organization's actions and decisions.
• Structure


  The organizational design, including the division of labor, hierarchy of authority, reporting relationships, and coordination mechanisms. It determines how tasks are divided, roles are defined, and decision-making processes are structured within the organization.