Key success factors of

environmental analysis
Factors that influence a companies ability to
compete successfully, dominate the market,
take competitive advantage in industry.
A key success factors can be:-
Specific skill or talent
Competitive capabilities
Something a firm must do to satisfy customers
Driving forces
Driving forces are the major underlying causes
of changing industry and competitive
condition.
Causes of driving Forces:-
Product innovation
Technological change
Entry or exist of major firms
Increasing globalization in industry
Regularity influences & government policy
changes
Changing in the lifestyle
Strategic Group Mapping
According to porter, a strategic group is the
group of firms in an industry following the same
or similar strategy along the strategic
dimension.
Companies in the same strategic group can
resemble one another in any of several ways:
Comparable product line breadth
Sell in the same price quality range
Emphasize the same distribution channel
Use essentially the same product attributes to
appeal to similar types of buyers
Cont

Or offer buyers similar services and technical
assistance
Value Chain Analysis
The primary analytical tool of strategic cost
analysis is a value chain identifying the separate
activities, functions, and business processes that
are performed in designing, producing, marketing,
delivering and supporting a product or service
Value is the amount buyers desire to pay for what
a firm provides to them in the form of a
product/service/product-cum-service.
Value chain analysis examines the areas of
advantages of low cost and disadvantages of high
costs.
VALUE CHAIN
=A value chain is a set of interlinked value
creating activities performed by an
organization
=A tool to dissect your organization into core
and supporting activities
=A holistic look at your organization and how
department work with other departments
=A way to prioritize resources & activities
based on your customer needs


CONCEPT OF COMPANY VALUE CHAIN







Sales and
marketing
Inbound
logistics
operation
Outbound
logistics
service
Profit
margin
Product R&d, technology and systems development,
human resources management
General administration.
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SUPPORTIVE ACTIVITY
Swot analysis
Strengths
Weaknesses
Opportunities
Threats


Conti..
SWOT analysis evolved during the 1960s at
Stanford Research Institute
It is a very important strategic planning
technique
Perform to understand their internal and
external environments
through such an analysis organization can
know about the strength and weaknesses
existing within an organization and
opportunities and threats operating in the
environment so the effective strategy can be
formulated
A typical SWOT matrix
STRENGTHS:-
Favorable Location
Excellent distribution network
good management reputation
Establish R&D Center
ISO 9000 quality certificate
WEAKNESS:-
Uncertain cash flow
Low worker commitment
Weak management information
system
OPPORTUNITY:-
Favorable industry trend
Low technology option available

THREATS:-
Unfavorable political Environment
Obstacle in licensing new business

Tows matrix
Tows is another way of swot
Tows matrix is given by Weihrich
How the strengths and weaknesses
existing within an organization can be
matched with the opportunity and threat
operating in an environment so the
effective strategy can be formulated
Strategy formulation matching tool.


Conti..
Tows: threats, opportunities, weakness,
strengths.
WT strategy
WO strategy
ST strategy
SO strategy
Factors Strengths
(Internal)
Weakness
(Internal)
External
opportunity
So strategy
Use strengths
to take
advantage of
opportunity
Wo strategy
take
advantages of
opportunity by
overcoming
weakness
External
threats
St strategy
strength to
avoid threat.
Wt strategy,
strategy that
minimize
weakness.
Tows matrix

Evaluation techniques
Value chain analysis
Bench marking
Balance scorecard
Quantitative performance measure
Key factor rating



Value chain Analysis
A companys value chain identifies the primary
activities that create value for customers and
the related support activities.
It is a primary analytical tool of strategic cost
analysis.
Value chain helps the organization to improve
its capabilities to attain competitive advantage
by using resources effectively.
Benchmarking
Benchmarking is a tool that allows a company
to determine whether the manner in which it
performs particular functions and activities
represent industries best practice when both
cost and effectiveness are taken into account.

Balanced score card
Balance score card method takes into
consideration four important key performance
measures.
Customer perspective
Internal business perspective
Innovation and learning perspective
Financial perspective
Quantitative Performance
measure
Quantitative performance measures involves
ratio analysis, ROI, etc used for comparing the
actual performance with the predetermined
standards.

Key factor Rating
Those factors which have a significant impact
on the overall organization capability