Lesson Two : Environmental scanning and STEEP Analysis. Adapted from the Heriot Watt University ppt slides
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1 Lesson Two : Environmental scanning and STEEP Analysis Adapted from the Heriot Watt University ppt slides 1
2 D39BU Business Management in the Built Environment Vision & mission Swot analysis STEEP & Scenarios Planning feedback Strategic analysis & options decision making implementation feedback Evaluation & monitoring 2
3 A Model of Strategy Process The Built Environment Environment Identifying Options Stakeholder Expectations Selecting a Strategy Strategic Analysis Strategy Implementation Strategic Choice Resource Capability Strategic Capability Organisational Structure 3
4 Environmental analysis MACRO ENVIRONMENT STEEP ANALYSIS SOCIAL TECHNOLOGICAL ECONOMICS Industry Environment Suppliers Competitors Customers POLITICAL ENVIRONMENTAL Pg 4 unit 5 4
5 Auditing Environment Influences Strategic Analysis SOCIAL STEEP ANALYSIS POLITICAL TECHNOLOGICAL ECONOMICS ENVIRONMENTAL 5
6 Environmental analysis: The STEEP ANALYSIS SOCIAL values / demographics / life styles TECHNOLOGICAL new products / innovations / technological trends ENVIRONMENTAL pressure groups / energy efficiency / resources ECONOMICS recession / interest rates / inflation / tax POLITICAL election / policy / budget / legislation 6
7 Auditing Environment Influences Strategic Analysis STEEP ANALYSIS When Should STEEP be used? Times of Uncertainty Times of Information Overload Times of Disorganization 7
8 Auditing Environment Influences Strategic Analysis 1. Comprehend the element of the environment 2. Assess interrelationships between trends 3. Relate trends to issues 4. Forecast the future direction of issues 5. Derive implications STEEP ANALYSIS 8
9 Auditing the Built Environment SOCIAL Affordable Housing Strategic Analysis POLITICAL TECHNOLOGICAL Systems Building ENVIRONMENTAL Waste Management PFI / PPP ECONOMICS Recession 9
10 Auditing the Built Environment Affordable Housing Strategic Analysis *PFI / PPP Systems Recession Building Waste Management Note:* PFI = Private Finance Initiatives PPP = Public Private Partnerships 10
11 s;l/2015 Business Management in the Built Environment Resource & Strategic Capabilities Strategic Analysis SWOT ANALYSIS STRENGTHS WEAKNESSES THREATS OPPORTUNITIES 11
12 Resource & Strategic Capabilities Internal Audit Positive Factors STRENGTHS WEAKNESSES (Potentially) Negative Factors OPPORTUNITIES THREATS External Audit 12
13 Resource & Strategic Capabilities STRENGTHS WEAKNESSES OPPORTUNITIES THREATS STAFF TURNOVER PROFIT GROWTH STAFF POOR MARKET LOW PROFIT INNOVATION DIVERSIFY ALLIANCES SKILLS FUNDING ECONOMY STAFF LEAVE TECHNOLOGY CASH FLOW SWOT Summary STEEP & SWOT Analysis / Interpretation 13
14 STEEP & SWOT Analysis & Interpretation STEEP & SWOT Analysis / Interpretation Use in conjunction with other techniques Porter s Five Forces Porter s Generic Strategies Boston Consulting Group Matrix Diversification Analysis 14
15 Analysis of strategic position of the organisation Identify key Forces through 5-Forces structural analysis Audit the envm influences Strategic position Identify the firm s position In the industry Examine and idendify Opportunities and threats Through SWOT Pg 2 of Unit 5 Examine the nature of envm 15
16 Analysis of strategic position of the organisation Identify key Forces through 5-Forces structural analysis Audit the envm influences Strategic position Identify the firm s position In the industry Examine and idendify Opportunities and threats Through SWOT Pg 2 of Unit 5 Examine the nature of envm 16
17 Michael Porter s 5 forces Threat of Entrants Potential Entrants Suppliers Bargaining Power COMPETITIVE RIVALRY Buyers Bargaining Power Threat of Substitutes Substitutes 17
18 18
19 Exam question: (for discussion) Critically appraise Porter s five forces model, provide a view on the school of thought that underpins the model and explain how the model could be used by a built environment organisation to develop organisational strategy. REFER TO Pg : 4-7 OF UNIT 5 (TEXT) This question will be discussed in lesson 5 19
20 The Built Environment: The UK Construction Industry (GDP) STEEP ANALYSIS Public / Private (Spending) Civils Construction Housing R & M Strategic Direction (Markets / Portfolio / Competition) 20
21 The Built Environment: The Singapore Construction Industry (GDP)? STEEP ANALYSIS Public / Private (Spending) Civils Construction Housing R & M Strategic Direction (Markets / Portfolio / Competition) 21
22 Challenges in the Built Environment Industry Statistics:(Companies / Employment) Client Involvement:(Novice / Enlightened) Characteristics:(Project-based / Sub-Contracting) Procurement:(Contractual Governance / Route) Modern Methods of Construction:(incl. Environmental) Future Strategies:(Consolidation / Merger / Acquisition) 22
23 Sl/2015 Discussion & assignment (exam Question) As the senior executive of a built environment firm, critically appraise and discuss what you consider to be the key issues and their impact upon the environment within which the organisation competes. Furthermore clearly explain how these issues affect the organisation s strategy. 23
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