STRAMA 1&2

Environmental scanning

Refers to an in-depth examination of key factors that influence the business operation of a firm

Natural environment

Includes physical resources, wildlife, and climate that are an inherent part of existence on earth

Societal environment

Mankind’s social system that includes general forces that do not directly affect the short run activities of the firm but can influence its long term decision

Task environment

Includes elements or groups that directly affect a firm and, in turn, are affected by it.

Customers

They have the power to create or predicted the demand for a product or service

Suppliers

They provide a product or service to another business

Competitors

They have a better or a similar product to the same target segment

Employees

They directly participate in activities that help fulfill the firm’s goal

Government regulations

Any change in tax law will impact the business operation

Special interest groups

They bring attention to the firm and could affect the operation in either positive or negative way

Industry

A group of firms that produce a similar product or services

SWOT Matrix

A framework used to evaluate firm’s competitive position by listing the conditions inside and surrounding it

Strengths

Are the internal areas where N organization excel and factors that separate an organization from its competitors

Weaknesses

Are the internal areas that hinder an organization from performing its optimum level

Opportunities

These are favorable external factors that could give an organization a competitive advantage

Threats

These are the factors that may pose potential harm to an organization

PESTEL Analysis

A tool to identify the external forces that may effect an organization positively and negatively

Political

These factors determine the impact of government and government policy on particular organization or specific industry

Economic

These factor determine the impact of the economy and its performance on an organization and its profitability

Social

These factors determines the impact of the social environment and emerging trends on the business profitability of an organization

Technological

These factors determine the impact of the technological innovation and development on an particular market or industry

Environmental

These factors determine the influence the surrounding environment and ecological aspects

Legal

These factors determine the importance of understanding legal laws and procedures in a given territory where a business operates

Porter’s 5 forces

Developed by Michael E. Porter as a framework for assessing and evaluating competitive strength and position of a business organization

Suppliers power

This force analyzes how suppliers can easily influence prices increase

Buyer power

This force analyzes how Buyers can easily influence price decrease

Competitive rivalry

This force examines the intensity of competition in the marketplace

Threat of substitution

This force is threatening when buyers can easily find substitute products with attractive prices of better quality and when buyers can switch from one product or service to another with little costs

Threat of new entrants

This force determines how easy or difficult it is to enter a particular industry

Ecosystem assessment tool

The business ecosystem is demonstrated by a network composing 4 different types of players in the industry

Customers

these are the people or parties that buy the products and services of an organization

Suppliers

These parties provide the resources to produce or sell finished products or services

Competitors

These parties fight over an organization’s market share by offering similar products at services and targeting similar customers

Complementors

These organization offers complementary or harmonizing products or services

Business model

Company’s method of making money relevant to its business environment

Freemium

Offers basic version of the product or service for free to entice customers to purchase the more advanced features

Subscription based

Companies charge customers monthly or yearly fees to access their products or services

Peer to peer

These models allows two individual to buy/sell products or services directly with each other without and intermediary third party

Franchise

A franchisee grants another person or businesses a license to used it trademarks and products in exchange for paying a royalty fee

Direct sales

A company’s employee will be the one to demonstrate and sell the product or service being offered directly to the intended customer

E-commerce

A business model in which companies and individuals buy and sell price and services online

Affiliate marketing

A commission based business model by advertising products or services of other companies on their websites

Razor and blade

Where a product is sold at much lower price to make the consumer buy higher priced items later

Consultation

Companies use the consulting business model by hiring subject matter experts who can offer advice to clients on specific organization areas

Lock-in

This is done by locking customers into a company’s product or services making it difficult to abandon the company without dealing with negative consequences

Pay as you go

There is no recruiting bill or subscription necessary

Value Chain

Represents a firm’s internal activities when transforming inputs into outputs

Value chain analysis

A process that involves identifying the primary and support activities of a particular organization or industry

Inbound logistics

Involves raw materials handling and warehousing

Operations

Involves machining, assembling and testing

Outbound logistics

Involves warehousing and distribution of finished products

Marketing and sales

involves advertising, promotion and pricing channel relations

Service

Involves installation repair and parts

Firm infrastructure

Involves general management, accounting , finance, and strategic planning

Human resource management

Involves recruiting, training and development

Technology development

Involves research and development and products or process improvement

Procurement

Involves purchasing raw materials, machines and supplies

Cost advantage

Used when organization compete to achieve lower products and service costs

Differentiation advantage

This approach is driven by a firm’s desire to create superior products and services using innovation

Simple structure

Has no functional or product categories

Functional structure

Appropriate for a medium sized firm with several product lines in one industry

Divisional structure

Appropriate for a large corporation with many product lines in several related industries

Cost leadership

Strategy aims to increase profits by reducing costs while charging industry standard prices

Product differentiation

Strategy aims to create products that are significantly different from the competition

Cost focus

Strategy aims to select a niche market to sell a company’s products and services

Blue ocean strategy

Strategy aims to create new demand for a particular product

Information advantage

Strategy seeks the latest technology, strategies, and data to outpace your rival