MGT 212: Organizational Management: MID 2 LT 3 Environmental Analysis

MGT 212: Organizational
Management
MID 2 LT 3 Environmental Analysis
MD Asif Hossain
1
SWOT Analysis
2
SWOT
Internal
 Strength
 Weakness
External
 Opportunities
 Threats
https://www.youtube.com/watch?v=9-NWhwskT
O4
3
Opportunities
Strengths
- What political, economic, social-cultural,
-What does your organisation do better than or technology (PEST) changes are taking
others?
place that could be favorable to you?
-What are your unique selling points?
- Where are there currently gaps in the
-What do you competitors and customers in
market or unfulfilled demand?
your market perceive as your strengths?
- What new innovation could your
-What is your organisations competitive edge?
organisation bring to the market?
Weaknesses
Threats
-What do other organisations do better -What political, economic, social-cultural, or
than you? technology (PEST) changes are taking place
- What elements of your business add that could be unfavourable to you?
little or no value? - What restraints to you face?
What do competitors and customers in - What is your competition doing that
your market perceive as your weakness? could negatively impact you?
4
Porter’s
Five Force
Model
5
Porter’s Five Force Model (Cont.)
 1. Threat of new entrants. How likely is it that new

competitors will come into the industry?
 2. Threat of substitutes. How likely is it that other
industries’ products can be substituted for our industry’s
products?
 3. Bargaining power of buyers. How much bargaining
power do buyers (customers) have?
 4. Bargaining power of suppliers. How much
bargaining power do suppliers have?
 5. Competitive Rivalry. How intense is the rivalry 6
among current industry competitors?

Porter’
s5
Force
 https://www.youtube.com/watch?v=GFVKKTwkANY
8
PESTLE Analysis
 A PESTLE analysis is a useful tool for understanding the ‘big
picture’ of the environment in which an organization is
operating.
 PESTLE analysis describes a framework of environmental
factors used in the environmental scanning component
of strategic management. It is part of an external analysis
when conducting a strategic analysis or doing market research,
and gives an overview of the different environmental factors
that can impact the organization.
 Specifically a PESTLE analysis is a useful tool for understanding
risks associated with market (the need for a product or
service) growth or decline, and as such the position, potential
and direction for an individual business or organization.
PESTLE
PESTLE Analysis
 Political factors. These include government regulations such
as employment laws, environmental regulations and tax policy.
Other political factors are trade restrictions and political
stability.
 Economic factors. These affect the cost of capital and
purchasing power of an organization. Economic factors include
economic growth, interest rates, inflation and currency
exchange rates.
 Social factors. These impact on the consumer’s need and the
potential market size for an organization's goods and services.
Social factors include population growth, age demographics and
attitudes towards health.
 Technological factors. These influence barriers to entry, make
or buy decisions and investment in innovation, such as
automation, investment incentives and the rate of
technological change.
 Legal factors include discrimination law, consumer
law, antitrust law, employment law, and health and safety law.
These factors can affect how a company operates, its costs, and
the demand for its products.
 Environmental factors include ecological and environmental
aspects such as weather, climate, and climate change, which
may especially affect industries such as tourism, farming, and
insurance. Furthermore, growing awareness of the potential
impacts of climate change is affecting how companies operate
and the products they offer, both creating new markets and
diminishing or destroying existing ones.
12
P for Political factors
 Some political factors that you can study

are:
 Government policies
 Taxes laws and tariff
 Stability of government
 Entry mode regulations
13
E for Economic factors
 The inflation rate

 The interest rate
 Disposable income of buyers
 Credit accessibility
 Unemployment rates
 The monetary or fiscal policies
 The foreign exchange rate
14
S for Social factors
 The cultural implications

 The gender and connected demographics
 The social lifestyles
 The domestic structures
 Educational levels
 Distribution of Wealth
15
T for Technological factors
 New discoveries
 Rate of technological obsolescence
 Rate of technological advances
 Innovative technological platforms
16
L for Legal factors
 Product regulations
 Employment regulations
 Competitive regulations
 Patent infringements
 Health and safety regulations
17
E for Environmental factors
 Geographical location
 The climate and weather
 Waste disposal laws
 Energy consumption regulation
 People’s attitude towards the environment
18
Further Reading
 https://pestleanalysis.com/what-is-environmenta
l-analysis/
19

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MGT 212: Organizational

 1. Threat of new entrants. How likely is it that new

among current industry competitors?

 Some political factors that you can study

 The inflation rate

 The cultural implications

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