Chapter 4
Analyzing Environments
© David O’Sullivan
4-1
Case > Riversimple Car
http://www.youtube.com/watch?v=iAfhDB0CDr4
http://www.gizmag.com
4-2
Reflections
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Outline a process for defining innovation goals
Use techniques for conducting environmental analysis
Understand the importance of benchmarking in
innovation
Explain how to develop statements such as mission
and vision statements
Identify stakeholders and their requirements
Describe the process of strategic planning
Outline the process of creating performance
indicators
4-3
Activities
[Discussion of selected student
‘Activities’ from previous chapter]
4-4
Learning Targets
 Outline the process of defining goals for an
organization
 Understand the five-forces model used in
business analysis
 Explain the difference between rational and
incremental goal definition
 Explain the benchmarking process
 Understand the PEST process for
environmental analysis
 Develop SWOT statements for innovation
 Begin the process of codifying critical data for
innovation
4-5
Goal Planning
4-6
Perspectives of Goal Definition
 Rational perspective views goal
definition as a conscious effort to
structure the development of an
organization toward a planned future
 Incremental perspective views goal
definition as an ongoing stream of
decisions regarding the development
of the organization that eventually
determines an organization’s future
4-7
Environment Analysis
4-8
PEST Analysis
4-9
PEST Analysis
4-10
Porter’s
Five
Force
Model
4-11
Benchmarking
4-12
SWOT Statements (Sun Hotel)
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Strengths
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Family tradition
Many years of experience and culture of hospitality among staff
Multicultural staff
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Old infrastructure
Weak marketing
Aging (retiring) management
Lack of experience in international cooperation
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City plans new annual festival to increase tourist market.
City has great tourist potential.
Government is expected to launch business expansion tax incentives.
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New hotels and hotel chains in city
More demanding business travelers
Health and safety legislation
Weaknesses
Opportunities
Threats
4-13
Other Statements
 Statements is to communicate key
messages and beliefs across the
organization that will guide the
behavior of all members
 Examples include
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Mission
Vision
Safety
Quality
4-14
Core Competencies
 Core competencies can be viewed as
the integrated set of abilities that
distinguish an organization in the
marketplace
 Organization’s can perform these core
competencies better than competitors
and add value to the customer
4-15
Strengths/Core Competencies
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Workforce
Facilities
Market Understanding
Financial Know How
Technology
4-16
Mission
 Purpose: Why the organisation exists
 Strategy: The competitive position and
distinctive competence
 Values: What the organisation believes in
 Behaviour Standards: The policies and
behaviour patterns that underpin the
distinctive competence and value system
4-17
Ashridge Mission Model
First Hanson
Hewlett Packard
Purpose
The shareholder is king. Think of the pensioner
living off her investments.
Be respected by our customers, our people and
society.
Strategy
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Better financial discipline
Knowledge of cash cows
Skill at buying up and breaking up poor
performing groups
Better operators
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Better people, better motivated
Engineering excellence
New product development
Better after sales service
Values
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Individual responsibility
Autonomy and accountability
Efficiency is good
Victorian work ethic
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Good people need space
Informality is good
Creativity is a human being’s ultimate purpose
Caring is good
Borrowing is weak
Behaviour
Standards
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Budgets must be met
Managers work hard
Keep businesses simple
Decentralise
Focus on short term financial performance
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Management by objectives
MBWA (Management By Walking Around)
Open door
Team work
Communication
No Borrowing
4-18
Summary
 Outline the process of defining goals for an
organization
 Understand the five-forces model used in
business analysis
 Explain the difference between rational and
incremental goal definition
 Explain the benchmarking process
 Understand the PEST process for
environmental analysis
 Develop SWOT statements for innovation
 Begin the process of codifying critical data for
innovation
4-19
Activities
4-20
Search Online
 http://mitworld.mit.edu/
 The Art of Engineering (J. Dyson)
 Innovation Through Design Thinking (T.
Brown)
 The World is Flat (T.L. Friedman)
4-21