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Strategic Management
The General Environment
Organising into narratives that are easier to grasp and use than great volumes of
data.
They are aimed at challenging the existing mind-set.
In India RBI is the Central bank dealing with monetary policy and interest
rates.The economic data which they monitor often gives conflicting
signals.Patterns may make them believe that the economy is overheated and
hence increase interest rates.Implementing rate hike and its impact on the
economy may take over six months.By this time the economy make actually take
a downturn.Hence we need to exercise caution and judgement when using
PEST analysis.
SOCIAL FACTORS
Includes cultural changes within the environment and are referred to as socio-
cultural.
Due to falling birth rates,Johnson & Johnson is targeting their baby care
products at the adult female audience.Its being marketed as being kind and
gentle to women,s skin as well as that of babies.This represents a response to
changes in the general environment that directly affects their industry.
Experts argue that the competitive environment is the only true area for the
company to analyse since it has the greatest impact on the firm’s market and
products.
SWOT ANALYSIS
• SWOT analysis refers to strengths, weaknesses,
opportunities and threats
• Strengths and weaknesses refer to the organization’s
internal environment
• Opportunities and threats refer to the organisation’s external
environment over which it has much less control
• SWOT may arise in both the general and the competitive
environment
• The unpredictable nature of events in the general
environment make the use of SWOT analysis more
problematic
INFERENCE
Taken together scenario planning and PEST analysis can
help identify external opportunities and threats(OT) facing the
company.
The firm’s internal strengths and weaknesses (SW) can be
determined by auditing its resources and capabilities.