Professional Documents
Culture Documents
Background
First of all a strategist should identify all the relevant factors that might affect
his or her business. In this process, one should first know what the internal
areas of the business are. This includes all the systems, internal structure,
strategies followed, and culture of the organization. All these areas can be
covered into the five functional areas in classical approach. Similarly, a
business daily interacts with the close environmental components outside the
business such as customer, competitor, and supplier. It might cover all other
stakeholders such as trade union, media, and pressure group. Furthermore,
general such business environment factors as political-legal, economic, socio-
cultural, and technological factors are to be identified
Scanning and selecting relevant and key factors
Out of all the business environmental factors, a strategist should focus only on
the relevant factors for further analysis. All the factors are not equally
important and affecting to the business. In this context, a strategist has to scan
the environmental trend to select only the most affecting environmental factors
from the information overload. This step paves the way of environment
analysis and forecasting.
Different types of methods, tools, and techniques are used for analysis. Some
of the major methods of analysis can be Scenario Building, Benchmarking,
and Network methods. Scenario presents overall picture of its total system
with affecting factors. Benchmarking is to find the best standard in an industry
and to compare the one’s strengths and weakness with the standard. Network
method is to assess organizational systems and its outside environment to find
the strength and weakness, opportunity and threats of an organization.
...
Some of the techniques of primary information collection can be Delphi,
Brainstorming, Survey, and Historical enquiry. Delphi technique collects
independent information from the experts without mixing them. Brainstorming
is information collection technique being open minded without criticizing
others. Survey is to design questions and to ask them to the participants
whereas the historical enquiry is a kind of case analysis of past period.
Collecting relevant information from the selected areas and to identify the
variables in such areas are the basics of analysis. Analyzing the past
information to predict the future is the main objective of this step. As discussed
earlier, use of different methods, techniques, and tools comes under the
analysis process. It is, therefore, a comprehensive process that analyzes
collected information using different tools and techniques.
Designing Profiles
After analyzing the environmental factors they are recorded into the profiles.
Such profiles record each component or variables into left side and their
positive, negative, or neutral indicators including their statement in the right
side. Internal areas are recorded in Strategic Advantages Profile (SAP) and
external areas are recorded in Environmental Threat and Opportunity Profile
(ETOP). Strength, Weakness, Opportunity, and Threat (SWOT) profile can be
designed combining both of these two profiles into one.
There are varieties of reporting formats or profiles used for external and
internal business environment analysis. Environmental Threat and Opportunity
Profile (ETOP) is commonly used to report the external environmental situation
whereas Strategic Advantages Profile (SAP) to report the internal
environmental situation1. Both of these profiles can be merged into Strength-
Weakness-Opportunity-Threat (SWOT) profile.2 (See: annex...). David used
External Factor Evaluation (EFE) Matrix to present weighted score of external
environmental factors. Similarly, he used Internal Factor Evaluation (IFE)
Matrix to make the reporting of internal environmental audit. (See: annex-...).
Whellen & Hunger used External Factors Analysis Summary (EFAS) and
Internal Factors Analysis Summary (IFAS) that are presented in annex- ....
1
see Jauch, Gupta, and Glueck, 2003
2
see Jauch, Gupta, and Glueck, 2003; Johnson & Scholas, 2003
others are negative. Therefore, it is necessary to find out their impact to the
organization. Positive, neutral, and negative sign in ETOP denotes the
relevant impact of environmental factors.
Preparing SAP
All these above described profiles provide a clear picture to understand the
strategic position of an organization.