Strategic Management

1) Key source of environmental information

* Industry periodicals and general news sources

* Analyst reports available on business databases

* Interviews with industry experts

* Annual reports of existing companies that disclose environmental factors in the Management Discussion & Analysis of risks and assumptions.

2) Key environmental variables

a. Economic: At the macro- and micro- levels, what is the economic environment that will impact your customers and your suppliers? What factors in the economic environment will directly impact your costs and revenue potential?

b. Technological: What old technologies are being used? What new technologies are emerging? Do they help you pursue your business goals, or do they compete with your product or service?

c. Political-Legal: Will you face any restrictive regulations, or a political-legal environment that offers benefits?

d. Sociocultural: What demographic and social trends affect your main customer base or related markets? Will they cause the market to expand or shrink? Are attitudes shifting in favor of your product? Are they shifting against a competitor?

Economic Technological Political-Legal Sociocultural

GDP Trends Total government Antitrust regulations Lifestyle changes

Interest rates spending for R&D Environmental Career expectation

Money Supply Total industry spending protection law Consumer activism

Inflation rates Focus of technological Tax Laws Rate of Family

Unemployment levels efforts Special incentives formation

Wage/price control Patent protection Foreign trade Growth rate of

Devaluation/ New products regulation population

Disposal and Laws on hiring and Age distribution of

Discretionary income promotions populations

Stability of government Birthrates

Regional shift in population

Forecasting tools and techniques

There are basically three types of questions about future states which efforts at forecasting might address. When might an event occur? What are the qualitative characteristics of the outcome of an expected event? What will be the magnitude of a quantity at a future point in time? An example of the first question is "When will the next vacancy occur in the sales department?" An example of the second is "What will be the sex of the next salesperson employed?" And an example of the third is "What will be the likely volume of sales during the third quarter of the year?"

Event-timing forecasts can perhaps be best approached by seeking to identify some sort of leading indicator (e.g., the date at which a terminal illness is diagnosed).

Qualitative-outcome forecasting is best approached by seeking to add to the stock of information upon which probability assessments