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Pepsico Case Study
Strategic Management: Concepts and Cases
Arab World Edition
Fred R. David
Abbas J. Ali
Abdulrahman Y. Al-Aali

Chapter 3:
The External Assessment

Ch 3 -١

Copyright © 2011 Pearson Education

External Assessment

Every convenience brings its own inconvenience. – Arab Saying

“To seize opportunities and overcome threats and difficulties, we have to actively confront changing conditions.”
– Abdul Wahab Ben Naser Al Munthery, CEO, AlBatina Group, Oman

Ch 3 -٢

Copyright © 2011 Pearson Education

Figure 3-1

Source: Adapted from Fred R. David, “How Companies Define Their Mission” Long Range Planning 22, no. 3 (June 1988): 40
Ch 3 -٣

Copyright © 2011 Pearson Education

External Assessment (External Audit)
Steps

•
•
•
•

Gather competitive intelligence
Assimilate information
Evaluate
Resulting in a list of the most important key external factors

The purpose of performing an external
Assessment is to Identify opportunities and threats. External Assessment
• Environmental Scanning
• Industry Analysis

Ch 3 -٥

Copyright © 2011 Pearson Education

External Assessment

Identify & evaluate factors that are beyond the control of a single firm:
• Increased foreign competition
• Population shifts
• Aging society
• Fear of traveling
• Stock market volatility

Ch 3 -٦

Copyright © 2011 Pearson Education

External Assessment
Gather competitive intelligence and information:

•Economic

•Political

•Social

•Governmental

•Cultural

•Legal

•Demographic

•Technological

•Environmenta

•Industry

l

Ch 3 -٧

Copyright © 2011 Pearson Education

External Assessment
Sources of information include:
• Internet
• Libraries
• Suppliers
• Distributors
• Salespersons
• Customers
• Competitors

Ch 3 -٨
Ch 3 -٨

Copyright © 2011 Pearson Education

Performing External Assessment
Key Factors:
Vary over time

- Vary by industry

Variables
• Market share
•
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