Environmental Scanning

and Industry Analysis

Iegmubetter

Perspective
Characteristics of strategic decisions:
Rare

Consequential

Unusual and typically have no precedent to follow

Commit substantial resources and demand a deal
of people commitment

Directive

Set precedent for lesser decisions and future

action
______________________________
Creative-Productive-Efficient

Iegmubetter

Perspective

In God we trust;
All others bring data
Jangan terjebak retorika dalam analisis!
______________________________
Creative-Productive-Efficient

Iegmubetter

Basic Concepts

Environmental
Scanning:
Gathering
Information

Strategy
Formulation:
Developing Longrange Plans

Strategy
Evaluation &
Implementation:
Control:
Putting Strategy
Monitoring
into Action
Performance

Feedback/Learning: Make correction as needed

______________________________
Creative-Productive-Efficient

Iegmubetter

Environmental
Variables

Internal
Environment

Employees/
union

Structure,
culture,
resources

Competitors

al

ic
lit

Trade
Associations

-L
eg

Communities

al
ce

Te
c

r
Fo

hn
Fo olo
rc gic
es a
l

al
tu
r
ul
-c
cio

s
ce

Suppliers

r
Fo

Po

Creditors

ic

Customers

om

Special
interest
groups

Shareholders

on

Task Environment
(Industry)

Governments

So

Ec

Fo
rc
e

Societal Environment

s
______________________________
Creative-Productive-Efficient

Iegmubetter

Societal Environment

Economic forces

Technological forces

Generate problem-solving inventions

Political-legal forces

Regulate the exchange of materials, money, energy, and

information

Allocate power and provide constraining and protecting laws

and regulations

Socio-cultural forces

Regulate the values, mores, and customs of society

______________________________
Creative-Productive-Efficient

Iegmubetter

Important variables in societal

environment
Economic

Technological

GDP trends
Interest rates
Money supply
Inflation rates
Unemployment levels
Wage/price controls
Devaluation/revaluation
Energy availability and cost
Disposable and discretionary
income
Currency markets

Total government spending

for R&D
Total industry spending for
R&D
Focus of technological
efforts
Patent protection
New products
New developments in
technological transfer from
lab to marketplace

______________________________
Creative-Productive-Efficient

Iegmubetter

Important variables in societal

environment

Economic

...

Technological

Productivity improvements
Internet availability
Telecommunication
infrastructure
Computer hacking activity

______________________________
Creative-Productive-Efficient

Iegmubetter

Important variables in societal

environment
Political-Legal

Socio-cultural

Antitrust regulation
Environmental protection
laws
Tax laws
Special incentives
Foreign trade regulations
Attitudes toward foreign
companies
Laws on hiring and
promotion
Stability of government
Outsourcing regulation
Foreign sweat shops

Lifestyle changes
Career expectations
Consumer activism
Rate of family formation
Growth rate of population
Age distribution of
population
Regional shifts in population
Life expectancies
Birthrates
Pension plans
Health care
Level of education

______________________________
Creative-Productive-Efficient

Iegmubetter

Important variables in international

societal environments

Economic

Economic development
Per capita income
Climate
GDP trends
Monetary and fiscal
policies
Unemployment levels
Currency convertibility
Wage levels

Economic...

Nature of competition
Membership in regional
economic associations,
e.g. EU, ASEAN, NAFTA
Membership in World
Trade Organization (WTO)
Outsourcing capability

______________________________
Creative-Productive-Efficient

Iegmubetter

10

Important variables in international

societal environments

Technological

Regulation on technology
transfer
Energy availability/cost
Natural resource
availability
Transportation network
Skill level of workforce
Patent-trademark
protection

Technological...

Internet availability
Telecommunication
infrastructure
Computer hacking
technology

______________________________
Creative-Productive-Efficient

Iegmubetter

11

Important variables in international

societal environments

Political-Legal

Form of government
Political ideology
Tax laws
Stability of government
Government attitude
toward foreign companies
Regulations on foreign
ownership of assets
Strength of opposition
groups

Political-Legal...

Trade regulations
Protectionist sentiment
Foreign policies
Terrorist activity
Legal system

______________________________
Creative-Productive-Efficient

Iegmubetter

12

Scanning External Environment

Analysis of societal environment
Economic, Socio-cultural, Technological, Political-Legal Factors
Market
Analysis

Competitor
Analysis

Community
Analysis
Interest Group
Analysis

Supplier
Analysis

Selection of Strategic
Factors
Opportunities
Threats
______________________________
Creative-Productive-Efficient

Government
Analysis

Iegmubetter

13

Identifying External Strategic Factors

(Issues Priority Matrix)
High

Medium

Low

High

High
Priority

High
Priority

Medium
Priority

Medium

High
Priority

Medium
Priority

Low
Priority

Medium
Priority

Low
Priority

Low
Priority

Low

Probability of Occurrence

Probable Impact on Corporation

______________________________
Creative-Productive-Efficient

Iegmubetter

14

Industry Analysis
Porters Approach

Potential
Entrants

Others
Stakeholders

Relative power of
unions,
governments,
special interest
groups, etc.

Threat of new entrants

Industry
Competitors

Rivalry Among
Existing Firms
Suppliers

Bargaining power
of suppliers

Bargaining
power of
buyers

Buyers

Threat of substitute
products or services
Substitutes

______________________________
Creative-Productive-Efficient

Forces Driving Industry Competition

Iegmubetter

15

Threat of New Entrants

Barrier to Entry

Economic of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Government policy
Cost disadvantages independent of size
______________________________
Creative-Productive-Efficient

Iegmubetter

16

Strategic Groups

(pursue similar strategies with similar resources)

High

Red Lobster
Olive Garden
ChiChis

Price

KFC
Pizza Hut
Long John Silver

Low

Shoneys
Dennys
Country Kitchen

Taco Bell
McDonalds
Burger King
Arbys
Limited menu

Product-line Breadth
______________________________
Creative-Productive-Efficient

Full menu
Iegmubetter

Mapping Strategic Groups in the US Restaurant Chain Industry

17

Strategic Types

Defenders

Prospectors

Focus on product innovation and market opportunities

Analyzers

Focus on improving the efficiency of their existing

operations

Operate in at least two different product-market areas

Reactors

Lack a consistent strategy-structure-culture relationship.

responses to environmental pressures
______________________________
Creative-Productive-Efficient

Iegmubetter

18

Value Discipline Triad

Best Product

Product Leadership
Product differentiation

Customer responsive

Operational competence

Operational Excellence
Best Total Cost

Customer Intimacy
Best Total Solution

______________________________
Creative-Productive-Efficient

Iegmubetter

19

Internal Scanning:

Organizational Analysis

Subagyo

Iegmubetter

20

Review
Environmental
Scanning:
Gathering
Information

Strategy
Formulation:
Developing Longrange Plans

Strategy
Evaluation &
Implementation:
Control:
Putting Strategy
Monitoring
into Action
Performance

Feedback/Learning: Make correction as needed

External (Opportunities, Threats)

Internal (Strengths, Weaknesses)
______________________________
Creative-Productive-Efficient

Iegmubetter

21

Internal:
Strengths and Weaknesses

Structure:

Chain of command

Culture:

Beliefs
Expectations
Values

Resources:

Assets
Skills
Competencies
Knowledge

______________________________
Creative-Productive-Efficient

Iegmubetter

22

Beberapa Istilah

Resources
Organizations assets (physical and non physical assets)
Capabilities
Corporations ability to exploit its resources (turning input into
output)
Competency
A cross-functional integration and coordination of capabilities
Core Competency
Avon: expertise in door-to-door selling
FedEx: application of information technology to all its operation
Distinctive competencies
When core competencies are superior to those of the competition.
Toyota: Efficiency, General Electric: Management development
______________________________
Creative-Productive-Efficient

Iegmubetter

23

VRIO framework
(to evaluate a firms competencies)

Value:

Rareness:

Do other competitors possess it?

Imitability:

Does it provide customer value and competitive advantage?

Is it costly for others to imitate?

Organization:

Is the firm organized to exploit the resource?

Jika semua jawaban Yes untuk suatu kompetensi: Strength (distinctive

competence)
______________________________
Creative-Productive-Efficient

Iegmubetter

24

Evaluasi S-W:

Resources, Capabilities, and Competencies

Membandingkan kinerja masing-masing item

dengan:

Kinerja masa lalu

Kinerja kompetitor utama
Kinerja rata-rata industri

Jika hasilnya berbeda secara signifikan:

Faktor strategis

______________________________
Creative-Productive-Efficient

Iegmubetter

25

Resource-Based approach to strategy

analysis
1.
2.
3.

4.

5.

Identify and classify the firms resources in terms

of strengths and weaknesses
Combine the firms strengths into specific
capabilities and core competencies
Appraise the profit potential of these capabilities
and competencies in terms of their potential for
sustainable competitive advantage and the ability
to harvest the profits resulting from their use.
Select the strategy that best exploits the firms
capabilities and competencies relative to external
opportunities.
Identify resource gaps and invest in upgrading
weaknesses
Iegmubetter
______________________________
Creative-Productive-Efficient

26

Kunci Kelanggengan Keunggulan

Durability

Laju penurunan keunggulan

New technology bisa mempercepat (Keahlian
pencetakan foto, digusur teknik digital)

Imitability

Kemudahan ditiru kompetitor

Penggunaan reverse engineering mempercepat
peniruan
Isu konvergensi teknologi
______________________________
Creative-Productive-Efficient

Iegmubetter

27

Blue Ocean Strategy

COST
Value
VI
Innovatio

VALUE

Kunci:
Keluar dari Comfort Zone

Era I:
Price = Cost + Profit
Era II:
Profit = Price Cost
Era III:
Sukses = Quality (VI)
=qcdsme
______________________________
Creative-Productive-Efficient

Iegmubetter

28

Knowledge

Explicit knowledge

Relatively easy to learn and imitate by others

Easily articulated and communicated

Tacit knowledge

Not easily communicated because it is deeply

rooted in employee experience or in corporations
culture.
More valuable and sustainable
Others can understand what they do, but they
cant do it (Michael Dell)
______________________________
Creative-Productive-Efficient

Iegmubetter

29

Continuum of Resource
Sustainability
Level of Resource Sustainability
High
(Hard to imitate)

Slow-Cycle Resources
-Strongly shielded
-Patents, brand name

Low
(Easy to imitate)

Standard-Cycle
Resources

Fast-Cycle Resources

-Standardized mass
production

-Idea driven

-Easily duplicated

-Economics of scale
-Complicated
processes
______________________________
Creative-Productive-Efficient

Iegmubetter

30

Support Activities

A Corporations Value Chain

Firm Infrastructure
(general management, accounting, finance, strategic planning)
Human Resource Management
(recruiting, training, development )
Technology Development
(R&D, product and process improvement)

Profit
Margin

Procurement
(purchasing of raw materials, machines, supplies)
Inbound
Logistics
(raw materials
handling and
warehousing)

Operations
(machining,
assembling,
testing)

!
!

Outbound
Logistics
(warehousing
& distribution
of finished
product)

Marketing &
Sales
(advertising,
promotion,
pricing,
channel
relations)

______________________________
Creative-Productive-Efficient

Primary Activities

Service
(Installation,
repair, parts)

!
!

Iegmubetter

31

Corporate value-chain analysis

Examine each product lines value chain in terms of

the various activities involved in producing that
product or service.

Examine the linkages within each product lines

value chain.

Mana strengths? mana weaknesses?

Misal QC dengan marketing

Examine the potential synergies among the value

chains of different product lines or business units.

Kadang makin besar, makin ekonomis (low fixed cost), join

parts.
______________________________
Creative-Productive-Efficient

Iegmubetter

32

Corporate Culture

Collection of beliefs, expectations, and values

learned and shared by a corporations members.
Fungsinya dalam organisasi

Conveys a sense of identity for employees

Helps generate employee commitment to something greater
than themselves
Adds to the stability of the organization as a social system
Serves as a frame of reference for employees to use to
make sense of organizational activities and to use as a
guide for appropriate behavior

______________________________
Creative-Productive-Efficient

Iegmubetter

33

Tugas
Lakukan riset berbasis internet terhadap sebuah
perusahaan dan susun laporan (maksimum 15
halaman) yang menjawab:

1.
2.
3.

Core competencies apa yang dimiliki perusahaan tersebut?

Kompetensi mana yang merupakan distinctive
competencies?
Apakah perusahaan tersebut mempunyai keunggulan
kompetitif?

Petunjuk:

Laporan dikumpulkan dan dipresentasikan selasa

depan!

Gunakan Tabel 4-5 dan 5-2 buku T.L. Wheelen and

J.D. Hunger, 2006, Strategic Management and Business Policy,
10th Ed., Pearson Education International, New Jersey.

______________________________
Creative-Productive-Efficient

Iegmubetter

34