Docstoc

BUSINESS STRATEGY X ENV APPSL

Document Sample
BUSINESS STRATEGY X ENV APPSL Powered By Docstoc
					ENVIRONMENTAL
   APPRAISAL
   Trends & Techniques
 CONCEPT OF ENVIRONMENT
• The aggregate of all conditions, events &
  influences that surround and affect an
  organisation
• Environment is Complex – all the above factors
  interact and their sum total is difficult to
  understand in totality
• Environment is Dynamic- constantly changing
        CONCEPT (CONTD)
• Environment is Multi-faceted- a particular factor
  being seen differently by different persons
• Environment has Far-reaching impact- some
  factor may last long into the future and continue
  to influence the rest of the environment
          SIX MEGA TRENDS
             India’s Future
• The trend of acquiring scale- in 2000 the no of
  cars was half a million and in 2010a single
  company may be producing that number
• Trend of increase in connectivity and awareness-
  Indian telecom market was 5 million barely
  seven or eight years ago now about 180 million-
  12 times more TV sets
   MEGA TRENDS (CONTD)
• Trend of growth of middle class- in 2001 there
  were 61 million Indians came from families wth
  income than 2 Lakhs a year, in 2005 it was 100
  million and in 2010 likely to be 173 million
• Trend of problems of growth- ecological
  degradation, rising energy demand, income
  disparities
   MEGA TRENDS (CONTD)
• Trend of increasing openness to the world-
  foreign trade component of GDP is 55%,
  foreign investors in Indian share market about
  25%
• Demographically nearly half of India is below 25
  and culturally very different from the older
  generation
INTERNAL ENVIRONMENT
• We have gone through it in detail in our
  Organisational Appraisal
• What we have to remember that the strengths
  and weaknesses cannot be finally be determined
  and keep changing with the external
  environment
     GENERAL VS RELEVANT
        ENVIRONMENT
• The General Environment is vast and is far
  flung – not all factors are relevant for the
  business of the organisation
• The immediate factors and concerns of any
  organisation is confined to a part of the
  environment- relevant environment
• What is needed is an appraisal of the factors in
  the relevant environment and building them into
  the corporate planning process
ENVIRONMENTAL SECTORS
•   Economic
•   Political
•   Socio-cultural
•   Technological
•   Regulatory
•   International
•   Market
•   Supplier
ECONOMIC ENVIRONMENT
• The current economic stage of the country
• Economic structure- capitalistic, socialistic or mixed
• Economic policies- industrial, monetary and fiscal
• Economic Planning- annual budgets, 5 year plans etc.
• General Economic Indices- like National Income,
  GDP & its growth rate, per capita income etc.
• Infrastructural Factors like banks, transportation,
  communication facilities
SOME FACTS/PROJECTIONS
• India now is the fourth largest economy in
  purchasing power parity(PPP)
• By 2025 India will have an economy 60% of the
  US Economy
• By 2035 US, China & India will be three poles
  of the global economy in that order
• Japan & EU both will be surpassed in PPP
• But there will be bottlenecks
  SOME FACTS/PROJECTIONS
         (CONTD)
• Despite progress of the economy – poverty rate
  according to one calculation has fallen to 22%
  in 2004-5 from 50% in 1977-78-200 million have
  joined middleclass yet 300 million live in
  extreme poverty
• Economic slowdowns means lesser spending
  but the reverse is not true in India- Indian
  consumers are discerning spenders and relatively
  less swayed by brand images
   SOME FACTS/PROJECTIONS
          (CONTD)
• Economic Growth in India has been propelled by
  domestic savings rather hand by foreign investment
• Families create support systems for education, old age
  and health factors through savings in fixed assets, gold
  etc.
• Till 1980s the mistrust of private investment led to
  savings in banks, post offices- during that decade there
  have been shifts to stock markets and company
  deposits
           INTERNATIONAL
            ENVIRONMENT
• Globalisation- is process, content and direction
• Global economic forces, organisations, blocks
  and forums
• Global trade, its process & trends
• Global financial system, sources of financing
  and accounting standards
• Geopolitics
       INTERNATIONAL
    ENVIRONMENT (CONTD)
• Global demographic patterns & shifts
• Global Human Resource: institutions,
  availability, nature and quality of skills and
  expertise, mobility of labour
• Global Information System, communication
  networks and media
• Global technological and quality systems and
  standards
• Global legal system, arbitration and adjudication
      FOUR INTERNATIONAL
            FACTORS
• China No 1 and India No 2- China’s GDP is
  more than double that of India- China has
  grown at 9-10% as compared to 7-8% for
  India- yet India has pockets of excellence where
  the Chinese cannot match- Ranbaxy and Dr
  Reddy’s sell widely in Europe, US, Africa, South
  America even production facilities- Tatas
  acquisitions, AV Birla Group
      FOUR INTERNATIONAL
        FACTORS (CONTD)
• Increasing labor mobility despite better technology
  needing less labour because of falling population
  growth in EU, Japan & Singapore require influx of
  skilled people
• Historically India has been a supplier of labour
  previously unskilled and now educated- brain drain-
  reverse brain drain
• Equity markets, banks & financial institutions have
  fuelled Indian businesses – now ADRs, GDRs, foreign
  currency convertible bonds, cheap loans from foreign
  financial institutions
       FOUR INTERNATIONAL
         FACTORS (CONTD)
• WTO successor to GATT
• Its functions are administering WTO trade agreements,
  form for trade negotiations, handling trade disputes,
  monitoring national trade policies, technical assistance
  and training to developing
• Allegations: failure to set labour standards, check
  environmental impact of trade, being a tool of
  multinationals in dictating to sovereign nations
• WTO has within its purview patenting, outsourcing,
  food safety and processed food exports dismantling
  quotas for garments and textiles
   MARKET ENVIRONMENT
• Growing international trade, massive investment in
  infrastructure, increasing levels of disposable income,
  strong manufacturing and retail sectors have made
  companies responsive to customers- these have Indian
  market very dynamic- inviting investments
• Automobile industry in India has become more
  customer-focused because of competition
• Growing preference for natural, eco-friendly products
• Indians are showing attention to personal grooming
  friendly products
• Indian market is enigmatic, heterogeneous
 POLITICAL ENVIRONMENT
• Indian industrialists take keen and healthy interest in
  politics- governments still wield tremendous regulatory
  powers, political funding of elections is widespread
  among industrialists. Some openly back some parties
  and some join them
• The complex mosaic of Indian politics, leftists, rightists
  on both sides of parliament- weak and hesitant decision
  making- Vote Bank driven politics
• Violent politics on the fringe under the name of
  Maoists, Naxalites, ultra-leftists
REGULATORY ENVIRONMENT
• India is an over-regulated and under-governed
  country- there are 2500 central laws and 30000
  state laws- some of them inconsistent with the
  demands of a modern economy
• Judicial delays, judicial review and judicial
  activism in the same breath- politicians resent
  the judicial activism of the Supreme Court
• The regulations regarding FDI have been
  progressively liberalized
            SOCIO-CULTURAL
             ENVIRONMENT
• India's population of 1.1 billion hides several trends-
  growth rate has declined to 1.5%- illiteracy rates among
  women are dropping- yet gender violence, gender and
  reproductive rights, men’s les involvement in child care
  are open issues in the society
• India with its young population can yield demographic
  dividend r cause a demographic disaster- growth toward
  superpower status and yet Naxalites in a chain from
  Nepal borders to Chhatisgarh and Andhra Pradesh
• India has a vast & heterogeneous population with caste
  playing a major political and economic role
 SUPPLIER ENVIRONMENT
• Weak Infrastructure like water scarcity- Chennai
  the automobile capital of India has acute water
  shortage
• Power shortage- it affects energy intensive
  industries like Aluminium, cement,
  petrochemicals, fertilizers, pulp & paper, steel
  etc.- 15% of costs on power
• Road Transport with bad roads remain a costly
  infrastructure
    SUPPLIER ENVIRONMENT
           (CONTD)
• There are an estimated 500 million workers in India out
  of which only 7% are in the organised sector, officially
  the unemployment rate is 10% but unofficially 20%-
  the influx of engineers o IT industries has led to a
  shortage of engineers in the manufacturing and
  construction industries
• Paradox of Indian labour market- while many young
  men are desperate bout jobs many employers are
  equally desperate for the right type skilled manpower
          TECHNOLOGICAL
           ENVIRONMENT
• Knowledge-based industries with their need for
  intellectual capital- more attention needs to be
  paid to technologies which underlie the products
  and markets
• Internet has led to CRM leading to greater
  customisation
• Technology Transfer is now connected to FDI –
  no longer India has to buy know-how for a price

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:1
posted:7/28/2012
language:English
pages:25
Description: notes