Part 2 Strategic Analysis PDF

PART 2: STRATEGIC ANALYSIS L.O. → environment analysis (PESTLE) → analysing industry trends and dynamics → SWOT analysis → competitive force (Porter’s 5 Forces) → value chain → growth strategies 1. External analysis (PEST) → used to asses 4 specific external factors that may affect the market...

PART 2: STRATEGIC ANALYSIS L.O. → environment analysis (PESTLE) → analysing industry trends and dynamics → SWOT analysis → competitive force (Porter’s 5 Forces) → value chain → growth strategies 1. External analysis (PEST) → used to asses 4 specific external factors that may affect the market value of a business POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL → taxes → interest rates → health trends → equipment → tariffs → capital market → social movements developments & → trade policies conditions → population growth advancements → political stability → inflation → fashion trends → alternative methods of → environmental → exchange rates → demographic statistics communication regulation → GDP growth rates → system updates → labour laws 2. Analysing industry trends and dynamics → an industry is a specific group of firms that engage in similar business activities 1. Identify the industry, size of total revenues and expected growth 2. Explain industry trends: long-term directions or shifts in an industry that can affect its growth, structure and competitive landscape 3. Identify industry dynamics: factors that influence how an industry evolves over time, including competition, innovation & changes in consumer behaviour 3. SWOT Analysis STRENGTHS WEAKNESSES → characteristics of you business that make it → characteristics of your business that do not competitive within the industry or market contribute to industry or market success OPPORTUNITIES THREATS → external elements that may allow for an increase → external elements that may impede profitability in profitability 4. Competitive forces → new entrants: how easy or difficult it is for a new company to enter the industry market → supplier power: number of suppliers to an industry and how much bargaining power they have with companies → buyer power: bargaining power of consumers within an industry → substitution threat: threat of competition from similar substitute product outside of the primary industry → competitive analysis of rivals: competitiveness among companies within an industry and how the differentiation of products can add to it 5. Value chain TO COMPLETE 6. Growth strategies The Ansoff Matrix ⇒ related diversification: expansion occurs into areas similar to its existing operations ⇒ unrelated diversification: expansions occurs into areas that are not linked to its current businesses or industries - Also known as conglomerate diversification