Business Dynamics 4std

BUSINESS DYNAMICS
Nguyen Thu Tram, MA

Faculty of Business Administration
Banking Academy of Vietnam
The significance of the subject
v Cope effectively with the changing world in the digitalisation era
v Identify key components of the external environment
v Understand the characteristics of the external environment(VUCA)
v Recognise the impact of external environment on organisations
v Apply the complexity science in business
v Construct EFE Matrix to provide a comprehensive picture about business

situation
v Use the outcomes of external analysis for strategy formulation.
Copyright ©2017 Pearson Education, Limited 7-2

Learning Objectives
After studying this chapter, you should be able to do the following:
v LO1: Analyze key external components that must be examined in formulating strategies
and explain the role of the external environment evaluation in the formulation of strategy.
v LO2: Understand nature and dynamics of the external environment to determine an
appropriate management style and organizational structure.
v LO3: Develop an External Factor Evaluation Matrix (EFE) as a base for strategy
formulation
v LO4: Perceive the market as a complex system and explain its behaviors using key
properties of complex systems including emergence, interdependence, self -
organization, simple rules of interaction, requisite variety and the butterfly effects.
v LO5: Design business models using principles of Complexity Science.
7-3
Contents
v Chapter 1: The role of External environment evaluation
v Chapter 2: Key components of External environment
v Chapter 3: The characteristics of external environment (VUCA)
v Chapter 4: External Factor Evaluation (EFE) Matrix
v Chapter 5: The complexity science in business
v Chapter 6: Creating relevant business models

Course assessment
v Classroom attendance & participation: 10%
Attendance (8pt), Participation (4 times - 2pt)
v 01 midterm test: 20%
v 01 presentation (group work): 20%
v Final examination: 50%

Presentation (Group work)
v 5 - 6 groups of five students
v Content: analysing given problems on business dynamics, such as external

environment evaluation, external environment characteristics of a practical
company, using EFE Matrix to build up strategy for a given company, design
business model for a given company using principles of complexity science,
etc.
v Time: 15 min - 20 min. presentation, 10 min. Q&A
v Criteria: Practical, logical and deep analysis with ethics
v Assessment: content (5pt), Q&A (2pt), presentation (2pt), slide (1pt)

Course resourses
v Core textbook:
David, F. R., & David, F. R (2020), Strategic Management:

A competitive Advantages Approach, Concepts and Cases
(17th ed), Pearson.
v Other resources:
Case studies and articles assigned by lecturers

Q&A
v Q&A
v Group form
CHAPTER 1. OVERVIEW OF
EXTERNAL ENVIRONMENT EVALUATION
v 1.1. Definition of External environment evaluation
v 1.2. Role of External environment evaluation
v 1.3. Process of External environment evaluation
v 1.4. Tools for External environment evaluation

1.1. Definition of external environment evaluation
v Also called environmental scanning or industry

analysis
v Activities focus on identifying and evaluating trends
and events beyond the control of a single firm
vIt reveals key opportunities and threats confronting
an organization so that managers can formulate
strategies to take advantage of the opportunities
and avoid or reduce the impact of threats
1.2. Role of external environment evaluation
v I will tell you stories of...
7-11
v I will tell you stories of...

What do these stories (both success or failure)

have in common?
7-13
v The external environment evaluation is aimed at identifying

key variables that offer actionable responses
v Firms should be able to respond either offensively or
defensively to the factors by formulating strategies that take
advantage of external opportunities or that minimize the
impact of potential threats.
v More important with the more and and more complicated
and fast changing environment
Ø Group work: Pls analyse a succes or failure case of adapting to

external environment evaluation (10 min. discussion, 3 min.
presentation)
7-14
What do companies need to analyse in external

environment evaluation?
7-15
1.3. Process of external environment evaluation
• Gather competitive intelligence

1
• Meeting of managers to assimilate and

2 evaluate information
• Summarize prioritized list of external

3 factors

Step 1. Gather competitive intelligence

Please analyse how following trends affect companies?
1. The USD/VND exchange rate is increasing.
2. People are more concerned with environmental
problems.
3. More and more women are participating in the working
force.
=> What are your conclusions?
7-18

Source of external information
Unpublished sources Published sources

- customer surveys - periodicals, journals, reports
- market research - government, industry documents
- speeches at professional and https://valoma.vn/tai-lieu/
shareholders’ meetings - abstracts, books, directories
- television programs - newspapers, and manuals
- interviews
- conversations with stakeholders

Source of external information: Some websites
- Business (New York Times)
- Bloomberg
- Thomson Reuters Datastream
- Organizations: WB, UN, IMF, ADB, WTO, OECD
- US Census
- Vietnam General Statistics Office: https://www.gso.gov.vn/
- VnEconomy
- Vietnam Economy Forum
=> Make sure that information trustworthy and reliable => critical
thinking
Step 2. Meeting of manager to assimilate and evaluate

information
Try to avoid “elephant in the room” or “groupthink”
https://www.youtube.com/watch?v=N7cR2gArCFE
Step 3. Summarize prioritized list of external factors

- Rank the factors identified, from 1 (for the most important opportunity/
threat) to 20 (for the least important opportunity/threat).
- Instead of ranking factors, managers could simply place a checkmark by
their most important “top 10 factors.”
- Summing the rankings, or the number of checkmarks, a prioritized list of
factors is revealed.
- Prioritization is absolutely essential in strategic planning because no
organization can do everything that would benefit the firm; tough
choices among good choices have to be made.
CASE STUDY
If you want to launch new milk product for young

children, how could you do the forecasting?
1.4. Tools for external environment evaluation
v Some tools of external environment evaluation

- Assumptions: Best present estimates of the impact of
major external factors, over which the manager has little if
any control, but which may exert a significant impact on
performance or the ability to achieve desired results
- Forecasts: educated assumptions about future trends
and events. No forecast is perfect.
- Business Analytics Softwares: may be used to mine
huge volume of data, help executive make decisions

v FORECASTING METHODS
There are numerous methods to forecasting depending on
the need of the decision - makers. These can be
categorized in two ways:
1. Opinion and Judgmental Methods or Qualitative
methods
2. Time series or Quantitative Forecasting methods

v QUATITATIVE FORECASTING APPROACHES

The various forecasting methods are for quantitative data
forecasting:
- Time series models: Naive approach, Moving averages,
Exponential Smoothing, Trend Projection
Eg. weekly sales of Nike Air Jordans, quarterly earning
reports of Microsoft stock, etc.
- Associative model: Linear Regression
v QUATITATIVE FORECASTING APPROACHES

v QUALITATIVE FORECASTING APPROACHES

- JURY OF EXECUTIVE OPINION: The opinions of a
group of high-level experts or managers, often in
combination with statistical models, are pooled to arrive at
an estimate of demand
- DELPHI METHOD: Consists of a group of 5 to 10
experts who will be making the actual forecast. The
respondents are a group of people, often located in
different places, whose judgement were valued. They
provide inputs to decision makers before the forecast is
made.

v QUALITATIVE FORECASTING APPROACHES

- CONSUMER MARKET SURVEY: This method uses
input from customers or potential customers regarding
future purchasing plans. It can help not only in preparing a
forecast but also in improving product design and planning
for a new products.
- SALES FORCE COMPOSITE: Each salesperson
estimates what sales will be in his or her region. The
forecasts are then reviewed to ensure that they are
realistic. Then they are combined at district and national
levels to reach an oerall forecast.

v Business Analytics Softwares

- Using software to mine huge volumes of data to help
executives make decisions
- Sometimes called predictive analytics, machine
learning, or data mining, this software enables a
researcher to assess and use the aggregate experience
of an organization, which is a priceless strategic asset for
a firm.
How facebook track your data?
https://www.youtube.com/watch?v=JAO_3EvD3DY
7-30
CHAPTER 2.
KEY FACTORS OF EXTERNAL ENVIRONMENT
v 2.1. Macro-level factors
v 2.2. Industrial factors
v 2.3. Sources of information for External factor analysis
v 2.4. The outcome of External factor analysis

CHAPTER 2.
KEY FACTORS OF EXTERNAL ENVIRONMENT
WARM UP ACTIVITIES
Each group choose 2 students. One will explain the word
(without saying it directly), one will guess
7-32
2.1. Macro - level external factors
Macro - level external factors can be divided into broad

categories:
1. economic forces
2. social, cultural, demographic forces
3. natural environment forces
4. political, governmental, and legal forces
5. technological forces
7-33
Economic Forces
v Shift to service economy v Income differences by region and

consumer group
v Availability of credit
v Price fluctuations
v Level of disposable income v Foreign countries’ economic
v Propensity of people to spend conditions
v Interest rates v Monetary and Fiscal policy
v Inflation rates v Stock market trends
v Tax rate variation by country and
v GDP trends state
v Consumption patterns v European Economic Community
v Unemployment trends (EEC) policies
v Value of the dollar v Organization of Petroleum
Exporting Countries (OPEC) policies
v Import/Export factors v ...
v Demand shifts for different
goods and services
Example: Advantages of a Strong VND
1. Leads to lower exports

2. Leads to higher imports
3. Makes VN goods expensive for foreign consumers
4. Helps keep inflation low
5. Allows VN firms to purchase raw materials cheaply from other
countries
6. Allows VN to service its debt better
7. Spurs foreign investment
8. Encourages Vietnamese to travel abroad
9. Encourages Vietnamese to spend money because they can buy
more for their money
CASE STUDY
Starting in Vietnamese market in

2014, McDonald wanted to open
100 stores in 10 years. However,
currently they have had just about
17 stores. What is the reason for
the flopping of McDonald in
Vietnam?
https://www.youtube.com/watch?v=l9pthhpd7So
Key Social, Cultural, Demographic Forces
v Population changes by race, v Attitudes toward

age, and geographic area retirement
v Regional changes in tastes and v Attitudes toward product
preferences
quality
v Number of marriages
v Number of divorces
v Attitudes toward customer
service
v Number of births
v Number of deaths v Attitudes toward foreign
v Immigration and emigration
peoples
rates v Social programs
v Social Security programs v Social responsibility issues
v Life expectancy rates v Customs and habits
v Per capita income v ...
v Social media pervasiveness
Examples - Funny failures
Natural Environmental Forces
vClimate, weather (change)

vEnergy conservation
vEcosystem conservation
vPollution control
vAttitudes toward environmental protection (green
consumption)
v Environmental protection actions
vSocial responsibility issues
v...
GREEN CONSUMPTION
GREEN CONSUMPTION
v Green tourism
GREEN CONSUMPTION
v No one - time wares

Political, Government, and
Legal Variables
v Environmental v VN vs. other country

relationships
regulations v Political conditions in
v Number of patents foreign countries
v Global price of oil
v Changes in patent laws changes
v Equal employment laws v Local, state, and federal
laws
v Level of defense v Import–export regulations
expenditures v Tariffs
v Unionization trends v Local, state, and national
elections
v Antitrust legislation v ...
Technological Forces
New technologies such as:

v the Internet of Things
v 3D printing
v the cloud
v mobile devices
v biotech
v analytics
v autotech
v robotics and
v artificial intelligence
v digital twin
v ...
are fueling innovation in many industries, and impacting strategic-planning decisions.
- In agricultural sector: https://www.youtube.com/watch?v=lt1vnLJu1GU&t=77s
- Digital twin: https://www.youtube.com/watch?v=iVS-AuSjpOQ
Technological Forces
vMany firms now have a Chief Information

Officer (CIO) and a Chief Technology
Officer (CTO) who work together to
ensure that information needed to
f ormulat e, i mp l e me n t , a n d e v a l u a t e
strategies is available where and when it is
needed
Results of Technological Advances
1. Major opportunities and threats that must be considered in formulating

strategies.
2. Can affect organizations’ products, services, markets, suppliers,
distributors, competitors, customers, manufacturing processes,
marketing practices, and competitive position.
3. Can create new markets, result in new and improved products, change
the relative competitive cost positions, and render existing products and
services obsolete.
4. Can reduce or eliminate cost barriers between businesses, create shorter
production runs, create shortages in technical skills, and result in
changing values and expectations of employees, managers, and
customers.
5. Can create new competitive advantages that are more powerful than
existing advantages.
Global Forces
vThe increasing global interdependence

among economies, markets, governments,
and organizations makes it imperative that
firms consider the possible impact of
variables on the formulation and
implementation of competitive strategies.
7-47
Global Forces
v What has been happening in the world...

- The world financial crisis in 2008
- US - China trade war in 2018
- The US presidential elections in 2020
- Brexit in 2020
(https://www.youtube.com/watch?v=wOJzzCXCvHA)
-...
also has an impact on Vietnam, too.
7-48
BRAINSTORMING ACTIVITIES
Think and list current external environment trends

as many as possibles!!! (10 minutes)
2.2. Industry factors
vThe Industrial Organization (I/O) approach

to competitive advantage advocates that
external (industry) factors are more
important than internal factors in a firm for
gaining and sustaining competitive
advantage.

HOW TO EVALUATE INDUSTRY FACTORS?
1. I d e n t i f y k e y a s p e c t s o r e l e m e n t s o f e a c h
competitive force that impact the firm.
2. Evaluate how strong and important each element is
for the firm.
3. Decide whether the collective strength of the
elements is worth the firm entering or
staying in the industry.

Michael Porter’s Five-Forces Model of Competition

vAn important part of an external audit is

identifying rival firms and determining their
strengths, weaknesses, capabilities,
opportunities, threats, objectives, and
strategies

Characteristics of the most competitive companies:

1. Strive to continually increase market share
2. Use the vision/mission as a guide for all decisions
3. Whether it's broke or not, fix it–make it better
4. Continually adapt, innovate, improve
5. Acquisition is essential to growth
6. Hire and retain the best employees and managers possible
7. Strive to stay cost-competitive on a global basis

Rivalry among competing firms
v Most powerful of the five

forces
v Focus on competitive
advantage of strategies
over other firms
ACTIVITY:
List competitive
companies of....:
If you cannot tell a name,
you have to withdraw
from the activity

vMost powerful of the five forces

vFocus on competitive advantage of strategies over
other firms
=> When is rivalry among competing firms high?

TABLE 7-7 Conditions That Cause High Rivalry Among
Competing Firms
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
1. When the number of competing firms is ...
2. When competing firms are of ... size - excess
3. When competing firms have ... capabilities - high
4. When the demand for an industry’s products is .... - similar
5. When the product or service prices in the industry - common
are ... - perishable
- falling
6. When consumers can switch brands ... - easily
7. When barriers to leaving the market are ... - low
8. When barriers to entering the market are ...
9. When fixed costs are ... among competing firms
10. When the product is ....
11. When rivals have .... capacity
12. When consumer demand is ....
13. When rivals have .... inventory
14. When rivals sell ... products/services
15. When mergers are ... in the industry

TABLE 7-7 Conditions That Cause High Rivalry Among Competing Firms
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
1. When the number of competing firms is high
2. When competing firms are of similar size
3. When competing firms have similar capabilities
4. When the demand for an industry’s products is falling
5. When the product or service prices in the industry are falling
6. When consumers can switch brands easily
7. When barriers to leaving the market are high
8. When barriers to entering the market are low
9. When fixed costs are high among competing firms
10. When the product is perishable
11. When rivals have excess capacity
12. When consumer demand is falling
13. When rivals have excess inventory
14. When rivals sell similar products/services
15. When mergers are common in the industry
Key Questions About Competitors
1. What are the strengths of our major competitors?
2. What are the weaknesses of our major competitors?
3. What are the objectives and strategies of our major competitors?
4. How will our major competitors most likely respond to current economic, social,
cultural, demographic, environmental, political, governmental, legal, technological,
and competitive trends affecting our industry?
5. How vulnerable are the major competitors to our alternative company
strategies?
6. How vulnerable are our alternative strategies to successful counterattack by
our major competitors?
7. How are our products or services positioned relative to major competitors?
8. To what extent are new firms entering and old firms leaving this industry?
9. What key factors have resulted in our present competitive position in this
industry?
10.How have the sales and profit rankings of our major competitors in the industry
changed over recent years? Why have these rankings changed that way?
11.What is the nature of supplier and distributor relationships in this industry?
12.To what extent could substitute products or services be a threat to our
competitors?
Potential Entry of New Competitors
vBarriers to entry are important

vQuality, pricing, and marketing can overcome
barriers

Barriers to Entry
v Large capital requirements

v Need to gain economies of scale quickly
(Boeing, Albus)
v Need to gain technology and specialized know-
how
(KFC, Coca, Pepsi, Samsung with OLED)
v Strong customer loyalty
(Mango, Zara, Samsung, Apple)
v Strong brand preferences
(Coca, Pepsi)
v Lack of adequate distribution channels
(Duc Viet sausage)
v Lack of experience
(Vietnamese cooperatives to European
markets)

Barriers to Entry
v Government regulatory policies

v Tariffs
v Lack of access to raw materials
v Possession of patents
v Undesirable locations
v Counterattack by entrenched firms
v Potential saturation of the market
v Other barriers...

Potential development of substitute
products
vPressure increases
when:
vPrices of
substitutes
decrease
vConsumers'
switching costs
decrease

Bargain Power of Suppliers
v Bargaining Power of Suppliers is increased when

(there are):
vFew suppliers
vFew substitutes
vCosts of switching suppliers is high
v Backward integration is gaining control or ownership of
suppliers

Bargain power of consumers
vBargaining power of consumers
vCustomers being concentrated or buying in

volume affects intensity of competition
vConsumer power is higher where products

are standard or undifferentiated

Bargain power of consumers
Conditions where consumers gain bargining power
1. If buyers can inexpensively switch
2. If buyers are particularly important
3. If sellers are struggling in the face of falling
consumer demand
4. If buyers are informed about sellers' products,
prices, and costs
5. If buyers have discretion in whether and when
they purchase the product

2.3. Sources for external factor analysis
v Must involve various participants in the company, as

well as other stakeholders
v Sources of external information:
- Unpublished sources include customer surveys, market
research, speeches at professional and shareholders' meetings,
television programs, interviews, and conversations with
stakeholders.
- Published sources of strategic information include periodicals,
journals, reports, government documents, abstracts, books,
directories, newspapers, and manuals.

Competitive Intelligence Programs
vCompetitive intelligence (CI)

va systematic and ethical process for gathering
and analyzing information about the
competition's activities and general business
trends to further a business's own goals

Competitive Intelligence Programs
The three basic objectives of a CI program are:
1. To provide a general understanding of an industry and

its competitors
2. To identify areas in which competitors are vulnerable

and to assess the impact strategic actions would have
on competitors
3. To identify potential moves that a competitor might make

that would endanger a firm's position in the market
2.4. The outcome of external environment analysis

CHAPTER 3.
THE CHARACTERISTIS OF EXTERNAL ENVIRONMENT
“I think the next century (21st century) will be the
century of complexity”
- Stephen Hawking-

CHAPTER 3.
THE CHARACTERISTICS OF EXTERNAL ENVIRONMENT
v 3.1. The changing external environment
v 3.2. The VUCA characteristics of external environment
v 3.3. Challenges in VUCA time
v 3.4. Firms reaction in strategy formulation

3.1. THE CHANGING EXTERNAL ENVIRONMENT
- In 19th - 20th century, engineering knowledge of Henry Ford,

Frederick Winslow Taylor or Henry Fayol applied to stabilize processes,
to increase efficiency in production and to create giant global
corporations. They were believed to be sufficient also for the future.
(Modern times - Chapli Chaplin)
- Stagnating markets, increased global competition, steadily growing
pace and the demand for continuous change makes organizations
today feel more and more unsure whether the paradigms and tools of
yesterday can address the challenges we will face tomorrow.
- Organizations need to be aware of and need to be prepared for rapid
changes in the environment (Drucker, 2001 and 2007)
- Managers and leaders have to react on the new evolving situations by
applying adapted approaches and tools.

3.2. THE VUCA CHARACTERISTICS
INTRODUCTION TO VUCA

As opposed to:
V: Volatile Stable
U: Uncertain Predictable and certain
C: Complex Simple and linear
A: Ambiguous Clear

- Life before VUCA, between the World War 2 and 1990, there were
different worlds on the same planet. The two big power blocks trying to
outperform each other in terms of military, or technological development
like the ability to send people into the space, ect. You know who you
are against.

- After 1990, strategist at the US Army War College started to think
about the world after the Cold War, and came up with the acronym
VUCA to describe it: a world where you are no longer up against a
known “Big Enemy”, but you might be under attack from various
terrorist or guerilla groups in various parts of the world that can
organize themselves quickly and successfully appear, attack and
disappear before you had the chance to organize your response.
- In the 21st century, business people have also adopted the term
VUCA.

V - VOLATILITY
- Organizations experience volatility when unexpected events upset an
established routine with the speed, magnitude, and volume of change creating
disorder. The more volatile the world is, the faster things change.
- The catalysts of volatility are broad and far-reaching fuelled by globalization
triggering increased interconnectivity and interdependence,technology
instigating digital and social media disruptions, financial interdependences
producing volatile markets, and growing consumer awareness leading to
constantly changing demands.
- The frequency and unpredictability of the changes compound risk exposure
and decision-making.
- Examples: price fluctuation of global raw material or stock prices.

VOLATILITY

VOLATILITY

VOLATILITY
DO YOU SEE ANY VOLATILITY AROUND

COMPANIES?
(5 mins)

U - UNCERTAINTY
- A lack of clarity to evaluate a situation properly to identify
challenges and opportunities
- In the past statistical regression models were able to
predict the future, today it becomes more and more difficult
to extrapolate future developments and link them with a
probability distribution.
- Two school of thoughts: organizations experience
uncertainty in situations where:
1) they know the change happening yet are unable to
determine the level of change impact
Ex: customer demand, technology developments, post
Covid - 19
2) they are unable to predict events and lacking clarity on
what is happening in the business environment
Ex: tetorism, cyber attack Copyright ©2017 Pearson Education, Limited 7-82
DECISIONS MAKING UNDER “STABILITY”
INTEREST RATE -----> ECONOMIC GROWTH

VUCA: UNEXPECTED SIDE EFFECTS
DEBT CURRENCY EXCHANGE RATES
PENSION FUNDS
INFLATION
- What are other side effects?

- How to make decisions?
C - COMPLEXITY
- A situation, where interconnectedness of parts and variables is so high, that the same
external conditions and inputs can lead to very different outputs or reactions of the
system.
- The idea of linear causality cannot be applied any more.
- External business environments have become more complex as globalization and
technology increase both the volume and the rate of networking
- Ex: Doing business in many countries, all with unique regulatory environments, tariffs
and cultural values or provide several products to several customer segment.

C - COMPLEXITY (SOURCE OF COMPLEXITY)
- Individuals and social systems

have difficulties dealing with
complexity
- An increase in environmental
complexity has certain impacts on
the individual level, as well as on
the organizational level.
Ex: Airport simulation
https://www.youtube.com/watch?v=JuXwEbAvk2Q

PENSION FUNDS
INFLATION
Why is it so difficult to estimate impact?

COMPLEXITY
DO YOU SEE ANY COMPLEXITY

AROUND COMPANIES?



A - AMBIGUITY
- Causal relationships are completely unclear. The meaning or interpretation
of a situation cannot be definitely resolved according to a rule or process
consisting of a finite number of steps.
- Multitude of different perspectives and viewpoints, cause-and-effect
confusion, inability to correctly interpret, events & situations. No precedents
and unknown unknowns.
- Ex: Doing business in immature or emerging markets or to lauch products
outside core competencies. Developing and implementing new startup
business.

PENSION FUNDS
INFLATION
- What are other side effects?

- How to make decisions?
VUCA RELATIONSHIP
- Two drivers: volatility and complexity
- Both complexity and volatility drive
uncertainty (in terms of ignorance
about the value for a variable) and
ambiguity (in terms of ignorance of
whether a variable exists in the space
at all
- U nc er t ai nt y and am bi gui t y ar e
related to each other using a four-
level scale

3.3. CHALLENGES IN VUCA TIME
RISK DUE TO VUCA FROM BUSINESS PERSPECTIVE?

VUCA Description Examples Risks

RISK DUE TO VUCA FROM
Elements
BUSINESSRate
Volatility PERSPECTIVE
of change Price fluctuations - Outdated information
after a natural disaster - Too slow responses
takes a supplier - Risk adversion
off-line
Ex:
- Nokia, Yahoo, IBM, traditional taxi companies
- Grab, Uber, Airbnb, Tesla, Amazon, companies with smart locker, smart homes


Elements
Uncertainty
BUSINESSNPERSPECTIVE
o t k n o w i n g Pending launch of a - I n c o m p l e t e
what will happen competitor’s product information
and what the - Resort to what work
future will hold. in the past
Surprises are
possible.
Ex:
- Vietnamese retailers companies


Elements
BUSINESSMPERSPECTIVE
Complexity u t i p l e k e y Business present - Analysis Paralysis
decision factors, in many countries - Address symptoms
interconnectedne a l l w i t h u n i q u e - Resort to short-term
ss of parts and regulatory fixes and quick - wins
variables environments and
cultures
Ex: Russia - Ucraine war impact the Vietnamese agricultural companies.
https://www.youtube.com/watch?v=780l9hq0mvQ (from 1min)


Elements
BUSINESSL aPERSPECTIVE
Ambiguity c k o f c l a r i t y Emerging markets, - F a i l u r e s t o
a b o u t t h e new products understand the
m e a n i n g o f a n outside of your core significance of events
event competencies. - N o t t a k i n g
appropriate actions
- Mis - interpretation
Ex:
- Mc Donald’s, Vietnam orange fruit, Vietnam fish sauce in European countries,
Vinamilk beer (Zorok)

WHAT IS YOUR EXAMPLE?

Group work: Analyse a case to see how it has suffered from VUCA.
(15 mins)
3.4. FIRM REACTIONS TO STRATEGY FORMULATION
MODEL 1: VUCA PORTFOLIO


Elements
BUSINESSRate
Volatility PERSPECTIVE
of change Price fluctuations - Outdated information
after a natural disaster - Too slow responses
takes a supplier - Risk adversion
off-line
Ex:
- Nokia, Yahoo, IBM, traditional taxi companies
- Grab, Uber, Airbnb, Tesla, Amazon, companies with smart locker, smart homes
- Build in slack or devote resources to preparedness, eg. stockpile inventory or overbuy talent
- Have to balance between expenses and risk. Risk management.
Eg: Multi-outsourcing, buying derivatives, insurances...


Elements
Uncertainty
BUSINESSNPERSPECTIVE
o t k n o w i n g Pending launch of a - I n c o m p l e t e
what will happen competitor’s product information
and what the - Resort to what work
future will hold. in the past
Surprises are
possible.
Ex:
- Vietnamese retailers companies
- Invest in information - collect, interprete and share it. This works best with
structural changes, such as adding information ananalysis networks, that can
reduce ongoing uncertainty
Eg: establishing agencies to collect information, technological intelligences,...

Elements
Complexity
BUSINESSMPERSPECTIVE
u t i p l e k e y Business present - Analysis Paralysis
decision factors, in many countries - Address symptoms
interconnectedne a l l w i t h u n i q u e - Resort to short-term
ss of parts and regulatory fixes and quick - wins
variables environments and
cultures
Ex: Russia - Ucraine war impact the Vietnamese agricultural companies.
https://www.youtube.com/watch?v=780l9hq0mvQ (from 1min)
- Restructure. Bring in or develop specialists and build up resources

adequate to deal with complexity

RESTRUCTURE ORGANIZATION

RESTRUCTURE ORGANIZATION


Elements
Ambiguity
BUSINESSL aPERSPECTIVE
c k o f c l a r i t y Emerging markets, - F a i l u r e s t o
a b o u t t h e new products understand the
m e a n i n g o f a n outside of your core significance of events
event competencies. - N o t t a k i n g
appropriate actions
- Mis - interpretation
Ex:
- Mc Donald’s, Vietnam orange fruit, Vietnam fish sauce in European countries,
Vinamilk beer (Zorok)
- Experiment. Understand causes and effects requires generating hypothesis and testing them.
Design your experiments so that lessons learnt can broadly applied.
Eg: Pilot trial product, trial film before launching

MODEL 2: MC KINSEY’S THREE HORIZONS MODEL
Value
is when companies begin to acknowledge that the world

revolving around them is no longer what it used to be and
that their ‘business as usual’ has outgrown its relevance.
This is the juncture at which organizations begin to
experiment with new modi operandi of functioning.
Time

MC KINSEY’S THREE HORIZONS MODEL
is the point at which business leaders begin to consider coming out

of their comfort zones. The second horizon is the juncture at which
business leaders are being led into taking tough decisions on giving up
Value
their tried and time-tested ways of working and replacing them with
new-age modes and methods.
Time

MC KINSEY’S THREE HORIZONS MODEL
is when the organizational leaders have now woken up to the

reality and can see it as clearly as daylight all around them.
Innovative business ideas and re-engineering notions that
were hither to in the conception stage are now being
translated into physical reality.
Value
Time

Value
Time
What have external factors of LEGO changed?

Value
Time
LEGO Universe: Virtual lego brick:

https://www.youtube.com/watch?v=84EUMfYHbTE
7-111
Value
Time
LEGO Starwar: https://www.youtube.com/watch?v=bna4W6x4h8w
7-112
MODEL 3: BEVUCA CRITICAL FACTORS

21st LEADERSHIP IN VUCA ENVIRONMENT
BRAINSTORM ACTIVITY:
WHAT CHARACTERISTICS OF LEADERSHIP IN VUCA
ENVIRONMENT?

21st LEADERSHIP IN VUCA ENVIRONMENT

CHAPTER 4.
EXTERNAL FACTOR EVALUATION MATRIX
v 4.1.Overview of the EFE Matrix
v 4.2.The significance of the EFE Matrix
v 4.3.The application of EFE matrix in strategy formulation
v 4.4. EFE matrix under VUCA time

4.1. OVERVIEW OF THE EFE MATRIX
v External Factor Evaluation

(EFE) Matrix is a strategy
tool used to examine
c o m p a n y ’s e x t e r n a l
environment and to
identify the available
opportunities and
threats.

4.1. OVERVIEW OF THE EFE MATRIX
“In God we trust. Everyone else bring data.” - Edward Deming
v External Factor Evaluation (EFE) Matrix does the best job

possible in identifying and evaluating the key affecting
factors
v The summarized information is evaluated and used for
further purposes, such as, to build SWOT analysis or IE
matrix
4.2. THE SIGNIFICANCE OF THE EFE MATRIX
v External Factor Evaluation (EFE) Matrix is comprised of 4

parts:
1. Key external factors
2. Weights
3. Ratings
4. Weighted scores

1. KEY EXTERNAL FACTORS:

- List 20 key external factors as identified in the external-audit
process, including both opportunities and threats that affect the
firm and its industry
- Requirement:
+ Based on PESTEL, Micheal Porter’s five forces, CPM...
+ Information must be specific as possible, using percentages,
ratios, and comparative numbers whenever possible (try to
AVOID ambiguous data like rising, creasing, reducing...)

Industry Analysis:
Competitive Profile Matrix (CPM)
vIdentifies firm's major competitors and their
strengths & weaknesses in relation to a
sample firm's strategic positions
vCritical success factors include internal and

external issues

Ex: Competitive Profile Matrix
TABLE 7-12 An Example Competitive Profile Matrix

▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
Company 1 Company 2 Company 3____________
Critical Success
Factors_ ___ _ Weight Rating Score Rating Score Rating Score____ ____
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product Quality 0.10 4 0.40 3 0.30 2 0.20
Price Competitiveness 0.10 3 0.30 2 0.20 1 0.10
Management 0.10 4 0.40 3 0.20 1 0.10
Financial Position 0.15 4 0.60 2 0.30 3 0.45
Customer Loyalty 0.10 4 0.40 3 0.30 2 0.20
Global Expansion 0.20 4 0.80 1 0.20 2 0.40
Market Share 0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20
Note: The ratings values are as follows: 1 = major weakness, 2 = minor weakness, 3 = minor strength, 4 =
major strength.
As indicated by the total weighted score of 2.50, Competitor 3 is weakest. Only eight critical success
factors are included for simplicity; this is too few in actuality.
EFE Matrix for a Local 10-Theater Cinema Complex

2. WEIGHTS:
- Give priority. The weight indicates the relative importance of that factor to
being successful in the firm’s industry.
- A weight ranges from 0.0 (not important) to 1.0 (very important)
- Appropriate weights can be determined by comparing successful with

unsuccessful competitors or by discussing the factor and reaching a group
consensus.
- Requirement:
+ Based on estimation, not by mere guess (0.08 is mathematically 33% more

important than 0.06, so even small differences can become very important due
to the need to allocate scarce resources)

3. RATING:
- A rating between 1 and 4 to each key external factor indicates how
effectively the firm’s current strategies respond to the factor
- 4 = the response is superior
3 = the response is above average
2 = the response is average
1 = the response is poor
- Different from weights?
- Requirement:
+ Based on estimation, not by mere guess

4. WEIGHTED SCORES:
- Multiply each factor’s weight by its rating to determine a weighted score
- Sum the weighted scores for each variable to determine the total
weighted score for the
organization.
- 4 = the highest possible total weighted score for an organization
2.5 = the average total weighted score
1 = the lowest possible total weighted score
- Different from weights?
- Requirement:
+ Based on estimation, not by mere guess


Build EFE Matrix for the Vietnam National Cinema?
7-130
4.3. THE APPLICATION OF THE EFE MATRIX IN STRATEGY
FORMULATION
- EFE matrix only helps identify and evaluate external business factors
- EFE analyses do not directly help formulate a strategy or the next best
strategic move.
- Information in the EFE matrix can be applied SWOT analysis or IE to
help formulate strategies.
FORMULATION
SWOT ANALYSIS
- SWOT analysis analyzes factors
that are internal (strengths and
weaknesses) and external
(opportunities and threats)
- Based on SWOT analysis,
companies can formulate adequate
strategies
7-132
FORMULATION
SWOT analysis
Strengths ( ) Weaknesses ( )
1.... 1....
SWOT analysis 2.... 2....
3.... 3....
Opportunities ( )
1.... Exploiting strengths to Take avantages of
2.... take avantages of opportunities to
3.... opportunities overcome weaknesses
Threats ( )
1....
2.... Exploiting strengths to Minimize weaknesses to
3.... avoid threats avoid threats
2016
FORMULATION
IFE analysis EFE analysis
IE ANALYSIS
- The IE matrix is based on analysis of internal and external business factors
which are combined into one suggestive model.
- The IE matrix is based on two criteria:
Score from the EFE matrix (on the y - axis)
Score from the IFE matrix (on the x - axis)
FORMULATION
IE ANALYSIS
- The IE matrix is based on two
criteria:
Score from the EFE matrix (on the
y - axis)
Score from the IFE matrix (on the x
- axis)
- Score: 1.00 - 1.99 (weak), 2.00 -
2.99 (average), 3.00 - 4.00 (strong)
4.4. THE EFE MATRIX UNDER VUCA TIME
“It is not the most intellectual of

the species that survives; it is
not the strongest that survives;
but the species that survives
is the one that is able best to
adapt and adjust to the
changing environment in
which it finds itself”
- Charles Darwin -
=> Look at the example again and

discuss about the pros and cons
of the EFE Matrix?
VUCA#: The addition of VUCA to the EFE matrix

- Provides essential information about the essential information about the potential impact of
both opportunities and threats to a company.
- VUCA# is calculated by the multiplication of all items for a particular factor.
Individual rankings ranges from 1 (low) to 4 (high)
- Neither analysis (EFE or VUCA#) on its own can provide the overall assessment necessary
to make the best business decisions but the combination could do it.
=> Regarding VUCA#, what could be

changing in the EFE matrix?
VUCA#: The addition of VUCA to the EFE matrix

Eg: Two new neighborhoods developing within 3 miles with high
volatility, uncertainty or ambiguity => change the impact of
weight according to VUCA level
Eg: Major
competitor The
accross town response of
recently closed company
with high regarding to
complexity VUCA#
(closed to open
new
substitutions or
merged with
other
competitive
ones) =>
opportunities
turn into threats
CHAPTER 5.
THE COMPLEXITY SCIENCE IN BUSINESS
v 5.1. The nature of complexity science
v 5.2. Components of a complex adaptive system
v 5.3. The application of complexity science in business

5.1. THE NATURE OF COMPLEXITY SCIENCE
What do these systems have in common?

THEY ARE COMPLEX SYSTEMS!

https://www.youtube.com/watch?v=M7Hf6VfsJ0U
v COMPLEX SYSTEM
- A system, where interconnectedness of parts and
variables is so high, that the same external conditions
and inputs can lead to very different outputs or
reactions of the system.
Eg:
-Flock of bird: The same flock of bird, different
shapes
- Football team: he same football players, different
tactics
- Financial market: The same financial participants,
different overnight interbank interest rates
- A customer: The same customer(s), different
demands
- The idea of linear causality (cause and effect) cannot be applied any more.
Eg of non - linearity:
- Team of talented football players could not win
- Surplus of money in banks, interest rates stay low
- Large number of customers, no/small demand
- Price increases, people try to buy
v THE COMPLEXITY SCIENCE

- The complexity science is concerned with investigating how complex systems
work
- The complexity science seeks to identify common features of the dynamics of such
systems or networks in general. Key questions to ask:
+ What are orderly patterns of behaviour? (flock of birds, customer behaviour)
+ Do these orderly patterns of behaviour evolve into new ones?
Ø The complexity science research has allowed for new insights into many
phenomena. The use of complexity science metaphors can change the way
managers think about the problems they face, and therefore figure out
appropriate solutions.
v COMPLEX ADAPTIVE SYSTEM

To survive and evolve in the complex situation, the system or its parts
changes themselves into complex adaptive ones.
- A Complex Adaptive System(CAS) consists of a large number of agents,
each of which behaves according to some set of rules;
- These rules require the agents to adjust their behaviour to each others or to
the environments
- Out of these adjustment, novelty, spontaneity and creativity emerge –
sometimes in unpredictable ways
Eg: - A football team: team players move accordingly to their mates
- A family: husband and wife relationship (old times and recent times)
- A company: it creates new products to compete with peers
5.2. COMPONENTS OF
A COMPLEX ADAPTIVE SYSTEM
WHAT MAKES A COMPLEX SYSTEM ADAPTIVE?

5.2. COMPONENTS OF
Emergence
Butterfly
Diversify
effects
COMPLEX
ADAPTIVE
SYSTEM
Self
Edge of
organizatio
chaos
n
5.2. COMPONENTS OF
v EMERGENCE AND INTERACTION
- Emergence is of centre interest to the study of complexity because complex
system are composed of many small parts distributed out without centralized
coordination.
- Emergence is formed by parts/elements and their relations/interaction.
- Emergence is a stage where new things (entity, object, patterns, capabilities,
qualities, ideas) are created from interactions
5.2. COMPONENTS OF
v SELF ORGANIZATION
- Self organization is the spontaneous
creation of a globally coherent pattern
out of local interactions.
- No single person absolutely in
command or control of the situation
- Agents interacting with each other in
simple rules
- Order is created out of chaos
Eg: A flock of bird
5.2. COMPONENTS OF
v EDGE OF CHAOS
- Not a fixed state, it is a transition
phase from chaos to order
- It is a critical phase where system
participants find creativity and stability
in an optimal balance
5.2. COMPONENTS OF
v DIVERSIFY
- The system combines the most different variants, characters,
functions. Differences not flattened out or levelled.
- High diversity creates more possibilities to react flexibly, on
environmental changes
5.2. COMPONENTS OF
v BUTTERFLY EFFECTS
- It is too easy to happen that small change in one state of a
deterministic nonlinear system can result in large differences in a later
state.
- When one thing changes everything else changes – maybe not
immediately but there would definitely be some consequence
somewhere.
5.2. COMPONENTS OF
HOW IS COMPLEXITY SCIENCE APPLIED

IN BUSINESS?
CHAPTER 6.
CREATING RELEVANT BUSINESS MODELS
v 6.1.Definition of Business models

v 6.2. Creating business models for organisations
- Types of business models
- Factors influencing business models
v 6.3. Review and Revise business models

6.1. DEFINITION OF BUSINESS MODELS
HOW COMPANIES AROUND YOU FUNCTION?

TRADITIONAL BUSINESS MODELS
Functional structure Push distribution

NEW BUSINESS MODELS
Dropshipping
MASS CUSTOMIZATION vs. MASS PRODUCTION

Mass customization:
- is the process of producing affordable market goods and services
that are customized to meet a specific customer's needs.
- refers to a business strategy to manufacture, market, and deliver
products and services customized per the needs of individual
customers.
MASS CUSTOMIZATION vs. MASS PRODUCTION

Share coke with...
Nike by you...
Website: https://www.nike.com/vn/w/nike-by-you-black-6ealhz90poy
Video: https://www.youtube.com/watch?v=fcEjIix_Z8U
- A holistic definition of business model does not exist yet, may be

understood as combination of many themes.
v The first theme:
- Describe business models as an organizational design/architecture
- The design of a business model is agent - driven by emergent
company characteristics
- The design might result from the composition of products, activities
and market influences
- Business model as a design seeks to avoid operational inefficiencies
to achieve corporate strategy


v The second theme:
- Links business model with resource - based view. An organization’s
structure depends on assets stocks or its core activities.
- The acquisition and distribution of resources are essential factors of a
business model.


v The third theme:
- Depicts business models as a form of innovation
- Creates a framework that enable technological potentials to be
transformed into economic returns via customers and markets
- Is a mediator between technological progress and economic value
creation


v The fourth theme:
- Sees business models as opportunity facilitators
- Understands a business model as an expectation of how a company
can succeed in its environment.
- Links business model to perceived commercial potential, a process for
opportunity exploitation

A business model describes how the company creates, communicates,

delivers, and captures value out of a value proposition
(Abdelkafi, 2012)
7-166
A business model is a conceptual tool containing a set of objects,

concepts and their relationship with the objective to express the
business logic of a specific firm to achieve firm strategies.
Competitive Quality, price,

strategy time...
Functional
strategies
Human
Manufacturing Marketing
resource
Finance Distribution ...

7-167
6.2. CREATING BUSINESS MODEL FOR ORG.
Team work (10 min brainstorming + 2 min. discussion)

You want to manufacture toys for young children aged up to 12
years old.
Please elaborate on the business model and analyze it.
6.2. CREATING BUSINESS MODEL FOR ORG.
6.2. Creating business models for organisations

v Types of business models
v Factors influencing business models
7-169
6.2. TYPES OF BUSINESS MODELS
v Functional organizational structure
v Product/Location/Customer - based organizational

structure
v Matrix organizational structure
v Dropshipping
v Dropshipping with customer pick up
v And many other more...
170
FUNCTIONAL ORGANIZATIONAL STRUCTURE
v Pros
- Specialization
- Operational clarity
- Operational speed
v Cons:
- Segregation (not see common picture of the company)
- Weakening of common bonds and lack of coordination
- Territorial disputes
171
PRODUCT - BASED
The organization is divided into self - contained

divisions according to the particular lines of
products or services they produce.
v Pros:
- Focus on specific market segments
- Meet customer needs more effectively, respond
to market changes more flexibly and quickly
- Encourage positive competition between each
department
- Coordinate and measure the performance of
each division directly
v Cons:
- Duplicate functionas and resources, eg different
sales team...
- Nurture negative rivalries among divisions
- Over - emphasising divisional, rather than
organisational goals
172
LOCATION - BASED
The organization is divided into self - contained divisions according to the specific
geographic location.
v Pros: v Cons:
- Better efficiency for division - Duplicate activities
- Flexible market response - More expensive
- Logistical efficiencies - Potential conflict and lack of central control
- Leadership opportunities - Lack of company culture
173
CUSTOMER - BASED
The organization is divided into self -

contained divisions according to demand
changes among its different audience
segments
v Pros:
- Focus on specific market segments
- Meet customer needs more effectively,
respond to market changes more flexibly
and quickly
- Coordinate and measure the
performance of each division directly
v Cons:
- Duplicate functionas and resources, eg
different sales team...
- Lead to divisions developing systems
that are incompatible with one another
174
MATRIX ORGANIZATIONAL STRUCTURE
A matrix organizational structure doesn't follow the traditional, hierarchical model. All
employees have dual reporting relationships. Typically, there is a functional reporting
line as well as a product- based reporting line.
v Pros: v Cons:
- Promote collaboration and communication - Complexity
- Ultimately share resources within businesses - Cause frustration over who has
- Allows employees develop new skills from authority over which decisions and
working within different departments products — and who's responsible for
compatible with one another those decisions when things go wrong.
175
DROPSHIPPING
A model where a store doesn’t keep the products it sells in stock.

Instead, the seller purchases inventory as needed from a third party—
usually a wholesaler or manufacturer—to fulfill orders.
v Pros: v Cons:
- Less upfront capital is required - Low margins
- Easy to start - Inventory issues
- Wide selection of products to sell - Shipping complexities
176
DROPSHIPPING WITH PICK- UP SITE
A model where a store doesn’t keep the products it sells in stock.

Instead, the seller purchases inventory as needed from a third party—
usually a wholesaler or manufacturer—to fulfill orders.
177
6.2. FACTORS IMPACTING BUSINESS MODELS
WHAT ARE FACTORS IMPACTING

BUSINESS MODELS?
FACTORS IMPACTING BUSINESS MODELS
v INTERNAL FACTORS v EXTERNAL FACTORS

- Leadership - Market pressures:
- Products Customers demand
- Finance Technology
- Management competency Competitors
- Employees competency Suppliers,
- Organizational learning/inertia Informal social institutions,
- Organizational culture - Governmental regulations
- Power distribution - Globalization
- Risk philosophy and appetite - VUCA
- Complex adaptive system - ...
- ...
179
6.3. REVIEW AND REVISE BUSINESS MODELS
v Review the business model: Criteria

- The implementation of business strategy:
Product or service quality, price, delivery time, etc.
- Financial performance
- Innovativeness
- Cost reduction
- Stakeholders satisfaction:
Customers, Government, Suppliers, Employees, etc.

v Revise the business model

Impact factors Business performance
- Market pressures: - The implementation of
Customers demand business strategy:
Technology Business Product or service quality,
Competitors model price, delivery time, etc.
Suppliers, innovation - Financial performance
Informal social institutions, - Novelty - Innovativeness
- Governmental regulations - Scope - Cost reduction
- Globalization - Stakeholders satisfaction:
- VUCA Customers, Government,
- ... Suppliers, Employees, etc.
Mediator factors
- Leadership
- Products
- Finance
- Risk philosophy and appetite, etc 7-181
v Revise the business model (Foss and Saebi, 2017)

Scope
Modular Architectural
Evolutionary BMI Adaptive BMI

- Individual aspects of the business - Represent a revolution for a company's
model might be changed own business model
- Use examples from other companies
New to company that have already tested desirable
aspects in their business processes.
Novelty Eg. Companies apply dropshipping in Eg. Companies change into franchising
their distribution, outsourcing in their chains
manufacturing
Focused BMI Complex BMI

- Industrial innovations triggered by - Create a business model structure that
changes in a company's individual no competitor in the same industry has
activities without changing the business used before
New to industry model's core characteristics.
Eg. Development of new customer Eg. Grab and Uber
segment like cosmetics for men, part Airbn
time house help
HOW TO DESIGN EFFECTIVE BUSINESS

MODELS USING PRINCIPLES OF COMPLEX
ADAPTIVE SYSTEM?

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BUSINESS DYNAMICS

Nguyen Thu Tram, MA

v Identify key components of the external environment

v Understand the characteristics of the external environment(VUCA)

v Recognise the impact of external environment on organisations

v Apply the complexity science in business

v Construct EFE Matrix to provide a comprehensive picture about business

v Use the outcomes of external analysis for strategy formulation.

Copyright ©2017 Pearson Education, Limited 7-2

v LO2: Understand nature and dynamics of the external environment to determine an

appropriate management style and organizational structure.

properties of complex systems including emergence, interdependence, self -

v LO5: Design business models using principles of Complexity Science.

v Chapter 2: Key components of External environment

v Chapter 3: The characteristics of external environment (VUCA)

v Chapter 4: External Factor Evaluation (EFE) Matrix

v Chapter 5: The complexity science in business

v Chapter 6: Creating relevant business models

Attendance (8pt), Participation (4 times - 2pt)

v 01 midterm test: 20%

v 01 presentation (group work): 20%

v Final examination: 50%

v Content: analysing given problems on business dynamics, such as external

v Time: 15 min - 20 min. presentation, 10 min. Q&A

v Criteria: Practical, logical and deep analysis with ethics

v Assessment: content (5pt), Q&A (2pt), presentation (2pt), slide (1pt)

David, F. R., & David, F. R (2020), Strategic Management:

Case studies and articles assigned by lecturers

v 1.1. Definition of External environment evaluation

v 1.2. Role of External environment evaluation

v 1.3. Process of External environment evaluation

v 1.4. Tools for External environment evaluation

v Also called environmental scanning or industry

v I will tell you stories of...

v I will tell you stories of...

What do these stories (both success or failure)

v The external environment evaluation is aimed at identifying

Ø Group work: Pls analyse a succes or failure case of adapting to

What do companies need to analyse in external

• Gather competitive intelligence

• Meeting of managers to assimilate and

• Summarize prioritized list of external

Copyright ©2017 Pearson Education, Limited 7-16

Step 1. Gather competitive intelligence

Step 1. Gather competitive intelligence

Unpublished sources Published sources

Step 1. Gather competitive intelligence

Step 2. Meeting of manager to assimilate and evaluate

Step 3. Summarize prioritized list of external factors

If you want to launch new milk product for young

v Some tools of external environment evaluation

Copyright ©2017 Pearson Education, Limited 7-24

Copyright ©2017 Pearson Education, Limited 7-25

v QUATITATIVE FORECASTING APPROACHES

v QUATITATIVE FORECASTING APPROACHES

v QUALITATIVE FORECASTING APPROACHES

Copyright ©2017 Pearson Education, Limited 7-28

v QUALITATIVE FORECASTING APPROACHES

Copyright ©2017 Pearson Education, Limited 7-29

v Business Analytics Softwares