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WEEKLY DIARY 3
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WEEKLY DIARY 3

SUBJECT: STRATEGIC MANAGEMENT

SUBMITTED TO: SIR SULEMAN ANWAR

BY: SHAN RIAZ

ROLL NO: 19101240005

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REPORTING:
The Lecture Consisted of Chapter 3 of External Audit of our course work with the first group assignment. The
things we discussed were are FYP its introduction ,company description, Business Model Canvas, Business Goals,
Strategic Plan, Industry overview and analysis, Internal plan, porter generic strategy, then we discussed the
Pakistan Standard Industry and Classification, External Audit (opportunities and threats), Its Nature, Key External
Forces, We discussed country reports by Dun and Bradstreet (Risk indicators and comparison of past and present
situation), ARC country report, DATA MONITOR Country Profile, Economist Intelligence Unit, Consumer Book
of Pakistan, Post Covid 19 post budget scenario. Then we returned to our course and discussed Process of
performing External audit(External Factors , environment Variables),Industry organization and RB View, PESTEL
Analysis(Economic Forces - Social, cultural, demographic and Natural forces – Political, Governmental and Legal
Forces)

Lecture was helpful in increasing our understanding towards the External Factors and Frame work we are going to
adopt towards our project.

RELATING:
We can relate the External Audit with our Business Research method (In which we conducted survey of the
industry and done PESTEL analysis for our research work) We can relate to our Marketing course in which we
learned about demographic and many variables to select the target market and read the PESTEL analysis and its
impotence for selecting the targeted market, We had the same course in our BBA (Hon.), where we only studied
the terms and the process in theory.

REASONING:
The issue is that there were sudden shifts towards multiple topics and things were quite complicated and technical.

RECONSTRUCTING:
In the lecture we discussed

 Overview of FYP we discussed the content of Business plan project its outline that will make a more
effective argument. It will show why the project is important.
I. Introduction we have market opportunities (demand of the product and opportunities which will
make business more profitable) we have to conduct questioners (B2C conduct about 250 and in case
of B2B 50 questioner) from this we can analyze the demand. Next thing we have to introduce the
company the company (Legal status , type etc)
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II. Company description we have to discuss the Type of business and legal structure(is it partnership,
sole proprietorship etc), Mission and vision statements , core values , Business model (how to
generate money we discuss revenue, cost and profit) for this we have business model canvas
Document which should be of practical nature rather than ideal one. We went through the canvas
model structure in detail. We address these topics in it Key partners(Detail about our partners,
stakeholder, supplier and what recourses we get from them ), Key activities(Value preposition: 4ps
in case of manufacturing 7 ps in case of services, distribution channels: CRM, customer relation,
revenue stream: cash flows), key resources(Value preposition : recourses, tangible and intangible
resources, distribution channels , C.R. ,revenue stream), Value preposition(value chain, Customer
need we are targeting, services and product we are offering : STP , nature of product), Customer
relationship(customer reach strategy, C.R. , and the costs ) , Channels(communication medium ,
competitor methods to reach customer , which one will be the best and which one is cost efficient,
supply chain and demand chain , value creation and co creation), Customer Segments(Target
customers ), Cost structure(inherent cost: fixed cost variable cost total cost, resources and activities
that are most expensive), Revenue stream(value customer willing to pay, what they are paying,
revenue model, pricing tactics).we have to answer these questions in the business model canvas.
Business Goal(overall goal of business: lead ,progress), Relevant cortication and legal requirements.
III. Management and ownership Board of directors and relationship for members(For corporate sector
but if it is a sole proprietor or partnership we don’t use BOD we use ceo , chairman etc are used),
Manger staff structure, key manager, Future addition to current management team.
IV. Strategic plan External assessment/Environmental scanning (Significant factors in macro
environment, PESTEL analysis, PEST impact matrix, external factor evaluation matrix,
Opportunities and Strengths), Industry overview and analysis(History, size, trend, key player in an
industry, Porter 5 forces , porter impact matrix, competition strengths and weaknesses, Competitive
profile matrix), Internal Plan (Clear statement of strengths and weakness, SMART business
objectives for 5 year : these business objective are further divided into marketing, strategic, HR,
operational, financial, production objectives, Porter generic strategies: cost leadership,
differentiation and focus)
 Further we disused PSIC document how to find our industry and how we are will be searching class and
sub-class.
 External audit in this we will find the opportunities and threats for the firm. Tends and event beyond the
control of a single firm. We will identify the main or key opportunities and threats s an industry or a single
firm will face so that managers can reduce the threats and take the opportunities. It is aimed at identifying
Key Variables (because they keep on changing) that offer actionable response. Firms would adopt either
offensive strategy (cut throat or red ocean strategy) or defensive strategy (blue ocean or differentiation) one
that will minimize threat and take advantage of the opportunity.
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 Key External Forces

I. Economic forces
II. Social, cultural, demographic and natural environment forces
III. Political, governmental and legal forces
IV. Technological forces
V. Competitive forces
The above four point covers the PEST impact matrix and the fifth point indicate the porter five
forces.
 Relationship between key external forces and an organization In this the above mentioned five forces
are to be linked with the data of supplier, competitor, distributor, creditor, customer employees, manager,
stakeholders, product, services, market etc all this data will be used for to identify opportunities, threats
(external ) strengths, weakness(internal).
 Country Reports we then discussed various country reports. Dun and Bradstreet report in which we saw
different countries situation according to their Risk rating. The report is effective for next 2 years. The
report is used by investor whether they should invest or not. The report provide Country risk indicator
which consist of four category Political risk , Macroeconomic risk, External economic risk and
Commercial risk. The DB risk indicator is divided into 7 bands ranging from DB1-DB7 and they are further
divided into 4 quartiles (a-d). Few years earlier Pakistan was at Db5c but now it is in Db6a category.
Higher the risk higher the return so according to this Pakistan has more opportunities for business. Then we
saw ARC country report, Data monitor report, Economist Intelligence unit.
 Consumer Book of Pakistan 14-15 In this we have a detailed information related to the consumer market
of Pakistan. Demographic profile of Pakistan shows the map and the percentage of people according to
their age. The 10 key cities have around 19% of whole population of Pakistan from 500 cities and 45000
villages. Rest of Urban has 15% population and rural population is around 66%. It also shows data of
languages being spoken in Pakistan in %age and borders with Pakistan. Further we have Soci economic
classification show urban and rural population what profession the certain population belongs to, education
level of population according to gender and age further education is segmented on the basis of geography
and province and then section wise classification.
 Post Covid-19 and post budget scenarios Measure the consumer behavior shifts in Pakistan.
 Process of performing an external audit First we have to gather the competitive intelligence and an audit
of Economic, Social, cultural, demographic, environmental, Political, governmental, legal and
Technological trends. Then information should be assimilated and evaluated (CPM, PEST impact matrix,
EFE matrix) and then a final list of most important key external factors should be communicated.
 Key external factors Higher priority opportunities and threat. They should be long term annual
objectives; they should be measurable, applicable and hierarchical.
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 Environmental Variables External environment is divided into two Societal Environment and
Task Environment. Societal Environment is also called general environment and national market it
includes socio-cultural, Economics, Technological and political- legal Forces. While in case of
Task environment we deal with industry and deals with Shareholder, supplier, customer, creditors
etc who so ever is dealing with the industry. Internal Environment deals with the company or firm,
shop etc and discuss the structure, culture, and resources.
 I/O View Industrial organization view (outside in approach: First external audit then internal audit) we find
opportunities and threats and then see our resources to how to avail the opportunities and how to avoid the
threats. R/B View (resource based view) in this we first analyze our core competencies , strengths and
weakness, competitive advantage we have then with these which opportunities we can avail and which
threats we can avoid (inside out approach: first internal then external audit). I/O view prefer external factors
then internal ones. Firm performance is based on industrial properties
I. Economies of scale how much is achieved in industry(marginal increase in output decrease per unit
average cost)
II. Barrier to market entry what hurdles a new entrant will face to enter the market(govt. rules and
regulation, competition etc)
III. Product differentiation what feature and value added functionality are added in a single product
(Product range, width, depth).
IV. Economy overall economy (GDP, GNP, inflation rate valuation and devaluation of currency etc).
Last 3-5 year data we have to collect and forecast the next years 3 -5 years.
V. Level of competition Industrial concentration of industry are they operating as monopoly, perfect
completion, duopoly etc and overall pie value of the industry(Potential industrial earning;
profitability of the industry)
 PESTEL ANALYSIS
I. Economic Forces In this we discussed that we have to convert the USA variable to Pakistani
context. More than 85% of the economy of USA is service sector and we discussed the example of
Levis as they adopted outsourcing to underdeveloped or developing countries. The variables would
be like Shift in service/manufacturing economy in Pakistan, availability of credit, interest rate,
inflation rate, consumption patterns, worker productivity level and many more. All these variables
are studied at country level. We have to collect data from authentic sources (well sited reports,
publications etc)
II. Social, Cultural, Demographic and Natural environment forces (we have to see in the light of
post Covid situation) we can collect data from worldometer site. Then we forwarded towards Key
Variables. We have to pick the variables which are directly linked with our industry or project.
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III. Political, Government and legal forces During the analysis of political variable we have to make
unbiased opinion with references/evidence and for political instability we have to give reference
why it is so?

Conclusion:
The lecture was conclusive and demanded our theoretical knowledge to be in physical/solid
(project) form. We learned number of references (and how to get data from them) and how country
reports can be used for forecasting future events in a country. We started with External analysis
following I/O view and started PESTEL analysis and came across Economic and social variables
which can determine the industry performance. This project will help us boost our knowledge.