1. Strategic Planning for Learning Organizations
Session 8. Analysis of External Environment

2. Objectives of Day 3
Discuss principles and describe processes to undertake analysis of external environment
Discuss principles and describe processes to undertake analysis of internal environment
Discuss why gap analysis is necessary and describe its steps

3. Tentative Schedule of Day 3
08:30 – 09:00 Opening of the Day’s Activities
09:00 – 10:30 Session 8. Analysis of External
Environment
Tea/Coffee Break
10:45 – 11:15 Session 8. (Continued)
11:15 – 13:00 Session 9. Analysis of Internal
Lunch Break
14:00 – 14:30 Session 9. (Continued)
14:30 – 15:30 Session 10. Gap Analysis
15:45 – 17:15 Session 10. (Continued)
17:15 – 17:30 Feedback on the Day’s Activities and PAPA

4. Objectives of Session 8
Explain why an external environment analysis is necessary
Analyze the boundaries between the external and internal environment
Identify the components of the external environment analysis
Describe how to conduct an analysis of the external environment

5. Purpose of Analysis of External Environment
Study the relationship between the institution and its environment in terms of opportunities and threats
Provide capacity to respond to critical questions from the external environment

6. Purposes of External Environment Analysis (cont’d)
Explore future conditions of the institution’s external environment
Identify and prioritize emerging threats and design strategies to handle them
Identify and prioritize potential opportunities and design strategies to exploit them
Provide information on how these factors will affect attainment of the vision

7. What Type of Analysis? Should do prospective analysis
Involves monitoring, interpreting and evaluating the relevant external environment
Identifies the probable scenarios in order to build a desired future
Identifies trends to guide policy formulation and design effective strategies

8. Boundaries Between Internal and External Environments
Traditionally, any stakeholder outside the organization was considered as part of the external environment
The innovation systems paradigm and similar approaches such as the AR4D recognize the need to involve other stakeholders as part of the innovation system
The question is where are the boundaries drawn?
The boundary depends on the objectives and who needs to be involved to make it happen

9. Methodologies for External Analysis
There is no universal methodology
Use combination of concepts and methods for specific situations
Qualitative brainstorming, pooling of expert judgment, and scenario building
Quantitative methods include dynamic models, risk forecasting and trend analysis
With the innovation systems paradigm, need more participatory analysis

10. Relevant External Environment
A multidimensional combination of general or operational elements directly affecting present or future activities of the institution
Socio-cultural, economic, political, legal, and technological factors
Includes forces, aspects, events, facts and actors

11. Critical External Environment
Any element (force, event, fact or actor) that can directly affect the organization’s general performance or the performance of some of its activities
Should be considered in the external environment
Bear in mind the issue of boundaries and level of objectives

12. SWOT Analysis
External environment analysis deals with the OT part of the SWOT analysis
The opportunities offered by the external environment are identified
The threats posed by the external environment are identified
Some tentative effects of these on the attainment of the vision can be deducted

13. Opportunities
Any factor that can be exploited to advantage to enhance the performance of any of the organization’s or AIS’ most important initiatives
Opportunities must be recognized and exploited to increase the contribution and impact of the organization or AIS

14. Threats
Any factor that can become a disadvantage, risk or danger for the performance of any of the organization’s or AIS’ most important activities
Threats must be recognized to avoid them or to reduce their impact

15. Who Should Conduct the Analysis?
Interdisciplinary Coordinating Committee should be appointed before formulating a strategic plan
If at system level, committee should involve multiple stakeholders and institutions

16. Who Should Conduct the Analysis? (cont’d)
Require political will to succeed:
Financially- enough funds to carry out process
Politically- constant participation from top management
Logistically-adequate materials, equipment, personnel
Technically- ability to consult external experts

17. Methodology and Steps for Prospective External Analysis
Steps- Strategic Diagnosis
(Finding out)
Steps- Strategic Prognosis
(Projection)
1. Identify the relevant external environment
4. Identify and evaluate the trend for each critical factor chosen
2. Identify the critical external factors in hierarchical order
5. Identify and evaluate opportunities and threats
3. Identify key sources of information for each critical factor
6. Analyse implications for vision, mission, objectives and strategies