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2.1 The General Environment

The General Environment

2.2 Scanning, Monitoring, and Forecasting Changes in the Environment

2.3 Scenario Planning

2.4 PEST Analysis

2.5 SWOT Analysis

2.6 The General and the Competitive Environments

Key Work Strategic decision making under conditions of uncertainty

Key Work Strategic inflection points and their impact on strategy

Tools and Techniques Writing a PEST analysis

Tools and Techniques Undertaking scenario planning

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Main Reference Schoemaker, P.J.H. (1995). Scenario planning: a tool for strategic thinking. Sloan Management Review, 36(2), 25.

Learning Objectives
After completing this chapter you should be able to: • Define what constitutes the general environment • Evaluate the role of scanning and monitoring in detecting environmental trends • Apply scenario planning to decision making in uncertain environments • Evaluate PEST as a framework for analysing the macro-environment • Explain the use of SWOT analysis • Evaluate the relationship between the general and the competitive environment

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Introduction
In the previous chapter we looked at what strategy is and introduced a number of different perspectives on strategy formulation. We addressed the importance of values in determining why an organization exists, and looked at how an organization’s values, its vision, and its mission guide individuals’ behaviour by signposting what is important to the organization. We explained the importance of an organization being willing to change the assumptions that underpin its theory of the business if it is to adapt to changes in its environment. We also introduced a strategic management process which involves strategy analysis, strategy formulation, and strategy implementation. We noted that this essentially linear approach is useful for exposition but may not always accurately replicate