Strategic Analysis of the External

Environment

Kevin Hinde
 Aims

 wewill be examining some of the

techniques used by organisations to
explore the complex and uncertain external
environment over the short, medium and
long term.

2 May 16, 2010

 Learning Outcomes
– Identify a number of techniques for assessing
the external environment.
– Undertake a PESTEL analysis of your
organisation and compare it with those from
other organisations.
– Work through a web based assignment on
scenario planning
– demonstrate awareness of the complexities
involved in assessing dynamic environments.

3 May 16, 2010

 A Copernican view of the
Organisation.

Network

unions regulators

suppliers org customers

special
interests partners

competitors

4 May 16, 2010

 A Ptolemaic view

org
C
A
5 May 16, 2010
 Why Environmental Analysis?
 To provide information on emerging issues and
trends.
– to develop networks and partnerships among the
scanners and their organisations
– To educate the participants about the scanning
function and about specific issues and trends
 To provide useful information for the strategy
process.
Bryson (1995)

6 May 16, 2010

 Bryson (1995)

It is important too that

 key issues are selected.
 The issues cycle is understood
 (i.e.when fundamental policy questions or challenges
that affect an organisation, or community’s, mandate,
mission and values; product or service level mix;
clients, users, or payers; or costs, financing,
management or organisational design).
A record of the process is kept.

7 May 16, 2010

 Techniques for Monitoring the
Environment
Political

The
Technological Organisation Economic

Social

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 Porter's Five Forces Model

Potential
Entrants
Threat
of Entry

Bargaining
Power
Suppliers Competitive Buyers
Rivalry
Bargaining
Power Threat
of
Entry

Substitutes
Source: Porter
(1985)
9 May 16, 2010
 Techniques for determining future
trends

 ScenarioPlanning.
 The Delphi method.

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 1
Choose a Panel of Experts

2
Phrase the questions or issues, or 1a
describe the possible futures on Consult experts on
which an opinion has to be sought questions, issues and
possible futures to be
3 considered
Panelists, individually and anonymously, express
their views on the questions or issues, or on the
likelihood of the different futures.

4
Results are collate and summarised.
6a
Repeat steps 4, 5
5 and 6 if necessary 6b
Results are fed back to the to reach If necessary, ask those
panelists. No individual views consensus. who still hold extreme
are capable of identification. views to feed in,
anonymously, the
6 reasons for their views.
Panelists submit revised
views The Delphi Technique
7
Results are written up, Source: Smith (1994)
11 conclusions drawn p.67
May 16, 2010
 Auditing the Future: Bryson (pps.
87- 89)
– Social and organisational complexity.
– Privatisation and the consequent interaction among
public, private and non-profit organisations.
– Continuation of technological change.
– Limited public sector resources and Growth.
– Diversity of of the Workforce, customer base, and
citizenry.
– Individualism, personal responsibility, and community
involvement.
– Quality of life and environmentalism.
– Transitions with continuity, not revolution.

12 May 16, 2010

 Public Services in 2015?
TRENDS PERCEPTIONS SCENARIOS

TECHNOLOGY RESOURCE
SCARCITY
COMPETITION
DEMOGRAPHY
ECONOMIC
AWARENESS

Re-emphasis on the nature of

public service delivery

Re-positioning of public
service functions

POLITICAL
DYNAMIC
NEW EUROPE
POLITICAL CONSUMERISM
INSTITUTIONS (ANTI- REGULATORY
MONOPOLY) EXPANSION

13 Scenarios for Public Services: Based on work by past students

May 16, 2010
 Web Exercise:
Scenario Planning

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 And Finally...

 Summary.
 Have you covered the learning outcomes?
 Any Questions?

15 May 16, 2010