External Assessment :

A Framework for
Organizational Strategizing

Group III
SWOT ANALYSIS

Strengths
Weaknessess
Opportunities
Threats
LOGO
Opportunities
It is a condition in the General Environment
that, if exploited, helps a company achieve
strategic competitiveness

Threats
It is a condition in the General Environment
that may hinder a company’s effort to achieve
strategic competitiveness

LOGO
 EXTERNAL
ENVIRONMENT

LOGO
EXTERNAL ENVIRONMENT

It is made up of all the factors, conditions and

influences outside the organization. This may
give rise to opportunity which can be exploited
or it may give rise to the threat which can
underline or cause the problem to the
organization. Any organization has no or very
little control over the external environment.

LOGO
EXTERNAL ENVIRONMENT
Environment
Social

ral

Ge
ne Industry

ner
Eco
l
Ge
itica
Environment

al
nom
Pol
Threat of new entrants

ic
Power of suppliers
Power of buyers
Product substitutes
Intensity of rivalry

al
Ec

gi c
Competitor

nt
Env

olo

olo

me
gic

Environment

chn
iron

iron
a
l

Te
me

Env
nt

General
LOGO
EXTERNAL ENVIRONMENT ANALYSIS
It is a continuous process which includes:


Scanning: Identifying early signals of environmental
changes and trends


Monitoring: Detecting meaning through ongoing
observations of environmental changes and trends


Forecasting: Developing projections of anticipated
outcomes based on monitored changes and trends


Assessing: Determining the timing and importance
of environmental changes and trends for firms’
strategies and their management
LOGO
Four Levels of External Environment Assessment

1. Macro Environment

2. Industry, Sector, Area

Analysis

3. Market Analysis

4. Micro Market Analysis

LOGO
MACRO ENVIRONMENT

Major external and uncontrollable factors that

influence an organization's decision making, and affect
its performance and strategies.
MACRO ENVIRONMENT
SPEET Analysis
Social
Factors

Political Economic
Factors Factors

Areas of
Concern

Ecological Technologic
Factors al Factors

10
MACRO ENVIRONMENT
Techniques in Environmental Analysis

1. Mapping the Terrain

2. Critical Thinking
3. Moving through the Terrain
4. Forecasting and Scenario Setting
INDUSTRY, SECTOR AND AREA ANALYSIS

a. Industry Analysis

Industry
A classification that refers to a group of companies that
are related in terms of their primary business activities.

A group of firms producing products that are closely

substitutes

12
INDUSTRY ANALYSIS
Key Factors
 Organization’s Product or Service Quality
 Relationship built, trust generated and arrangements
made by organization over time with its suppliers
 Market Share of the Organization
 Organization’s Degree of control over vital links in the
entire supply chain
 Market Positioning

13
INDUSTRY ANALYSIS
Industry Status Analysis
Technology Levels and Processes Utilized
Investments and Capital Intensity
Employment
Operating Costs, Profitability Indices and Efficiency Measures
Product Quality, Attributes, Characteristics
Capital Structure and Financial Leverage
Industry Policy
Industry Logic 14
PORTER’S INDUSTRY ANALYSIS
Threat of
New
Entrants

Intensity
Power of Power of
of Suppliers
Buyers Rivalry

Product
Substitutes

15
INDUSTRY, SECTOR AND AREA ANALYSIS

b. Sector Analysis
Sector
It is a classification of individuals, groups or institutions
with a similar set of traits and similar needs (as client
system)

An area of the economy in which businesses share the

same or a related product or service.

16
SECTOR ANALYSIS
Sector Status Analysis
Sector Profiling
Sifting Sectoral Data
Five A’s
Sectoral Client System
Sector Structure Analysis
Policy Tension for Institutional Services Deliveries

17
SECTOR ANALYSIS
F i v e A’s o f S e c t o r a l A n a l y s i s

1. Accessibility
2. Availability
3. Adequacy
4. Acceptability
5. Affordability

18
SECTOR ANALYSIS
Sectoral Client System
a. Ability to Pay
b. Organizational Cohesion and Strength
c. Sophistication of Needs
d. Returns to or Benefits Derived from Service Delivery
e. Participation in Decision Making
f. Level of Previous informal Services Received
g. Positive Values and Attitudes

19
SECTOR ANALYSIS
Sector Structure Analysis Dif
fer
ent
Driving Forces Hindering Forces
Go
als
Sa
me
Go
als

Goals

Conditions Conditions
Reinforcing Unsupportive
Positive Negative
 SECTOR ANALYSIS
P o l i c y Te n s i o n f o r I n s t i t u t i o n a l S e r v i c e s D e l i v e r i e s

a. Tension between reaching the biggest

quantity of beneficiaries and providing quality
services but to a fewer number
b. Tension between low cost but less effective
and high cost but more effective alternatives
c. Tension between doing many types of
services versus focusing on a few critical ones
21
INDUSTRY, SECTOR AND AREA ANALYSIS

c. Area Analysis

Area
A rather small part of a geographic unit considered in
regard to its inhabitants or distinctive characteristics.

22
 AREA ANALYSIS
Area Balance Sheet
Resources or Assets Claimants or Users

A. Human Capital
B. Monetary Assets
C. Receivables
D. Extractable Natural Resources
E. Inventory of Goods & Services
Capabilities A. Local Claimants
F. Physical Infrastructure B. Foreign claimants
G. Economic Infrastructure
H. Social, Religious and Political
Structures
I. Intangible Assets

23
MARKET ANALYSIS

Market
It is a set of conditions through which buyers and sellers
come in contact with each other for the purpose of
exchange of goods and services for value.

24
MARKET ANALYSIS
Demand
It is the quantity of a good or service that
consumers are willing to buy at a given price.

Supply
It is the amount of goods or services, which
firms or individuals which are individuals
are able to produce taking account of a
selling price.

25
MARKET ANALYSIS

a. Actual Demand and Supply

b. Potential Demand and Supply Analysis
c. Product Substitutes and
Market Implications
d. Trend Analysis and Determination of
Critical Variables
e. Market Traits, Characteristics and
Consumer Behavior

26
MARKET ANALYSIS
b. Potential Demand and Supply Analysis
Potential Supply

Potential Demand
a. Income (Income Elasticity of Demand)
b. Price (Price Elasticity of Demand)
c. Taste
d. Availability and Accessibility of the Product

27
 MARKET ANALYSIS
e. Market Traits, Characteristics and Consumer Behavior

Industrial Users
They utilize raw or semi-processed materials for
conversion into industrial products or consumer goods.

Product or Service Consumers

They are office and home-use buyers. They purchase
in smaller quantities

28
MICRO MARKET ANALYSIS

Micro Market
It is a clearly defined locations or specific customer
groups which an organization wishes to serve.

29
MICRO MARKET ANALYSIS
Three Components of Micro Market
Custo
mer
Locatio
n

Micro
Market

Compe
titor

30
MICRO MARKET ANALYSIS
Market Segmentation
The division of a market into different homogeneous
groups of consumers.

A basis for segmentation is a factor that varies among

groups within a market, but is consistent within
groups.

31