Business Strategy
Environment
PESTEL
The PESTEL framework categories environmental influences into six main types: * Political (Taxation changes, foreign trade, political risk in foreign markets, government policies) * Economic (Interest rates, GDP trends, unemployment rates, exchange rates) * Social (Population changes, income distribution, consumerism, changes in culture and fashion) * Technological (new discoveries and technologies, ICT innovations, increased spending on R&D) * Environmental (Environmental protection regulations, energy consumption, global warming, waste disposal and recycling) * Legal (health and safety laws, employment laws, licensing laws)
Thus PESTEL provides list of influences on the possible success or failure of particular strategies.
Scenarios are detailed and plausible views of how the environment of an organization might develop in the future based on key drivers of changes about which there is a high level of uncertainty.
Porter’s five Forces Framework
Porter’s five forces theory analyses the competition that surrounds a company, measuring its intensity and helping this same company finding solutions to adapt its strategy depending on the type of existing competition. * The threat of entry * The threat of substitutes * The bargaining power of buyers * The bargaining powers of suppliers * The extent of rivalry between competitors.
The five forces constitute an industry’s structure.
* The threat of Entry & Barriers to entry
The threat of entry is low when the barriers to entry are high and vice versa.
The main barriers to entry are: * Economies of scale/ high fixed costs * Experience and learning * Access to supply and distribution channels * Government restrictions (licensing)
LOW: in football equipment sector, main brands (Adidas, Nike and Puma) have strong position. They spent lot of money in sponsoring to win market shares.
* Threat of substitutes
PESTEL
The PESTEL framework categories environmental influences into six main types: * Political (Taxation changes, foreign trade, political risk in foreign markets, government policies) * Economic (Interest rates, GDP trends, unemployment rates, exchange rates) * Social (Population changes, income distribution, consumerism, changes in culture and fashion) * Technological (new discoveries and technologies, ICT innovations, increased spending on R&D) * Environmental (Environmental protection regulations, energy consumption, global warming, waste disposal and recycling) * Legal (health and safety laws, employment laws, licensing laws)
Thus PESTEL provides list of influences on the possible success or failure of particular strategies.
Scenarios are detailed and plausible views of how the environment of an organization might develop in the future based on key drivers of changes about which there is a high level of uncertainty.
Porter’s five Forces Framework
Porter’s five forces theory analyses the competition that surrounds a company, measuring its intensity and helping this same company finding solutions to adapt its strategy depending on the type of existing competition. * The threat of entry * The threat of substitutes * The bargaining power of buyers * The bargaining powers of suppliers * The extent of rivalry between competitors.
The five forces constitute an industry’s structure.
* The threat of Entry & Barriers to entry
The threat of entry is low when the barriers to entry are high and vice versa.
The main barriers to entry are: * Economies of scale/ high fixed costs * Experience and learning * Access to supply and distribution channels * Government restrictions (licensing)
LOW: in football equipment sector, main brands (Adidas, Nike and Puma) have strong position. They spent lot of money in sponsoring to win market shares.
* Threat of substitutes