Strategic analysis: searching for opportunities and threats Focus: Daisytek  Assignment: Study H&W Ch 3 Environmental scanning and industry analysis and Industry analysis using Porter's framework. Be prepared to present your evaluation of Daisytek's external environment

Environmental Scan Sociocultural Forces Political - Legal Forces Technological Forces Economic Forces Task Environment Shareholders Communities Governments Special Interest Groups Customers Creditors Trade Association Competitors Employees/ Labor Unions Suppliers Internal Environment Structures Culture Resources Which elements are most relevant? What are the implications for management?

Environmental & industry analysis  Fig. 3-1 Environment Note distinction between inside and outside External focus is on Opportunities and Threats  Table 3.1 Environmental variables Identify important variables.  Fig. 3.2 Scanning external environment Which factors are key  Fig 3.3 Issues priority matrix What issues, e.g., opportunities and threats, need to be addressed?

Industry Competitors Rivalry Among Existing Firms Potential Entrants Suppliers Other Stakeholders Buyers Substitutes Threat of Substitute Products or Services Bargaining Power Of Buyers Threat of New Entrants Relative Power of Unions, Government, Etc. Bargaining Power Of Suppliers Industry Analysis (Porter)

Identifying Opportunities and Threats using Porter’s industry analysis model What opportunities & threats does relative power of Porter’s forces lead to?  Buyers power  Suppliers power  Other stakeholders power  Substitutes—alternative ways to satisfy need  Rivalry among existing firms  Potential new entrants  Opportunities  Threats Wrapping up from last session

Value chains (external)  Industry value chain (Fig. 4.2)—show activity flow from raw materials to consumer  Corporate value chain—examines How inputs are converted to outputs Processes by which value is added ” Differences among competitor value chains are a key source of competitive advantage.” Porter

Analysis concepts  Strategy: purpose, formulation vs. implementation & elements of each; generic types  Strategic Management: process & sub tasks, strategic decision making, top management’s role  Hierarchy of strategy: corporate, business, functional  Organizational effectiveness: goal, RB, IP, stakeholders  Objectives vs. goals: criteria to distinguish; requirements of objectives  Analyzing external environment: societal & task; how to do it, Porter model,  Analyzing internal environment Resource-based: core & distinctive competencies, elements of sustainability Value chain Scanning internal resources: structure, culture, functional capabilities  Strategic audit (appendix 11C)  SWOT and building a TOWS matrix of alternative strategies  Corporate strategy: directional (growth, stability, retrenchment), portfolio analysis, parenting  Functional strategies: outsourcing, marketing, finance, R&D, operations, HR, IT  3 tests of distinctive competency  Financial performance and condition  Implementing strategy: role of programs, budgets, procedures