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Process of Strategic Management - Assignment

   

Added on  2019-10-16

11 Pages1580 Words180 Views
Running head:STRATEGIC MANAGEMENT PROCESS FORMULIZATIONSTRATEGIC MANAGEMENT PROCESSFAMILIARIZATION

STRATEGIC MANAGEMENT PROCESS FORMULIZATION1I.GENERAL ENVIRONMENT ANALYSISA.PESTEL MODELThis model describes the framework of the external analysis or external factors while conducting a strategic analysis and while doing a market research and give a brief of the overall factors that are considered. On the other hand, it can be said that the result that is drawn by using the PESTEL Model further helpful in evaluating the weaknesses and Threats of the business organizations. For example, a large number of companies like PepsiCo, Apple Inc., and others perform the internal or external environment analysis by using SWOT or PESTELModel analysis. This helps them in taking a good decision in favor of the customers as well as the potential market.Variables that built the PESTEL framework include:Where,

STRATEGIC MANAGEMENT PROCESS FORMULIZATION2P stands for Political factors: Political Factors are the combination of different factors which determine the extent to which a government can affect a certain industry or the economy. For example, a new tax or duty scheme of Government. E stands for Economic factors: The factors included in the Economic are main determinants of an economy's performance that directly influence an organization and have resonating long term effects such as the rise in the rate of inflation. S stands for social factors: These are the factors that scrutinize the social environment of the market and gauge determinants such as population analytics, cultural trends, and demographics. T stands for Technological factors: These are the factors that mainly related to the innovations in technology. These factors have great potential of influencing the operations of market and industry in positive or negative manner. L stands for legal factors: The legal factors have mainly both internal and external sides. Legal factors are a combination of different laws that influence thebusiness environment in a particular country while there are certain policies that the organizations maintain for themselves.E stands for environmental factors: The last and final component is environmental factors. These factors mainly contain those that are determined or influenced by the surrounding environment. For example, farming, tourism, and agriculture. It is basically the composition of all these factors. FACTORSRisk factor adds to the major loss

STRATEGIC MANAGEMENT PROCESS FORMULIZATION3Rise or fall in tax Level of corruptionEnvironmental laws Compensation and company law Stability of the governmentRestrictions on import and exportIntellectual property rights Stability of politicsII.INDUSTRY ENVIRONMENT ANALYSIS(Five forces)It is the study done to assess the current industry environment. This exercise helps to understand the various aspects and analyze the trends in the industry in the better way. Basically, it is done through the external research agency or the external kind of businesses itself. This five forces model is also known as porter five model. These five forces include:1.The rivalry of the industry: due to this force intense competition increases and that leads to the profit reduction for the potential users in the same industry.2.Threats of the substitutes: the availability of the substitute also affect the profits ofthe company as consumer become indifferent among using any substitute.3.Bargaining power of buyers: the buyers use to bargain so much as due to this the company suffers loss as if the companies will not agree with that price then they may shift to their competitors.

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