Business environment critical analysis internal external

External Business Environment Internal Business Environment External Biz Environment Analysis  Socialcultural environment factors  Economic environment factors  Political/Legal environment factors  Technology environment factors  Global environmental factors By studying the external business environment, firms identify what they might choose to Socialcultural environment factors           Population growth Work/Career attitudes Education Income equality Age group People Mobility Lifestyle/fashion Entrepreneur spirit Health Feeling of safety/comfort Economic environment factors  Economic growth  Interest rates & monetary        policies Government spending Unemployment policy Taxation Exchange rates Inflation rates Stage of the economic cycle Consumer confidence Political/Legal environment factors  Government organization /          attitude Enterprise law Political Stability Competition regulation Contract enforcement law Consumer protection International trade regulations Employment laws Safety regulations Tax Policies Technology environment factors  Government research       spending New inventions and product development Rate of technology transfer Energy use and costs Usage of IT (eg Internet) Usage of mobile technology Rate of tech obsolescence Global Forces  WTO  AFTA  Global economics and finance  Global resources  Global supply chain  Climate change  Armed conflict  Natural disasters Porter forces  Threat of new entrants  Power of suppliers  Power of buyers  Product substitutes  Intensity of competitive rivalry Emerging Asia –Latest update Discussion research on Emerging Asia by ANZ Bank Emerging Asia –Latest update  China is overheating, Q1 GDP growth surge to 11.9% (y/y) and inflation pressures continue to mount The authorities have launched a series of measures to curb property speculation but action is clearly needed on the interest rate and exchange rate fronts 10 Emerging Asia –Latest update  Elsewhere in Asia the picture is mixed but broadly positive Domestic demand looks generally strong, intra-regional trade continues to drive exports (with some help from global demand for electronics) and inflation remains benign in most economies 11 Opportunities and Threats O&T’s posed by:  Socialcultural trends  Economic trends  Political/Legal trends  Technology trends  Global trends 12 Managing External Environment Risk Col External Environment Risk type Col Probalility of risk occurrence Col Adverse impact of occurrence Col Estimated Risk Score (1 to 5) (1 to 5) (1 to 5) (col2 x col 3) Col Risk mitigation Actions Social Economic Political/legal Technology Global TOTAL SCORE 13 Risk Management in Your Company  Prepare Risk Management Matrix (for external business environment)  Group Work 14 Internal Biz Environment Analysis  Resources  Capabilities  Core Competencies By studying the internal environment, firms identify what they can 15 Capabilities Capabilities The foundation of many capabilities lies in:   The unique skills and knowledge of a firm’s employees The functional expertise of those employees Capabilities are often developed in specific functional areas or as part of a functional area 16 Functional Areas Distribution Human resources Management information systems Marketing Management Manufacturing Research & development Capabilities Effective use of logistics management techniques Motivating, empowering, and retaining employees Effective and efficient control of inventories through point-of-purchase data collection methods Effective promotion of brand-name products Effective customer service Innovative merchandising Ability to envision the future of products Effective organizational structure Design and production skills yielding reliable products Product and design quality Miniaturization of components and products Innovative technology Developing sophisticated technology control solutions Rapid transformation of technology into new products and processes Digital technology 17 Managing Internal Environment Risk Col Internal Environment Risk type Col Probalility of risk occurrence Col Adverse impact of occurrence Col Estimated Risk Score (1 to 5) (1 to 5) (1 to 5) (col2 x col 3) Col Risk mitigation Actions Customer Business process Financial capacity Learning & Development Special cases TOTAL SCORE 18 Total Business Environment Analysis  Provides a combined score for external and internal      business environment analysis Guides the planning process and strategic thinking; Points the way forward where improvements should be made Prioritize the risks Take action immediately to mitigate the risk Guides the budget preparation for risk management 19 Risk Management in Your Company  Prepare Risk Management Matrix (for both external and internal business environment)  Group Work 20 THANK YOU 21