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* Helps organization to identify Opportunities


and Threats position

* To consolidate and strengthen organizations * Provides the strategists of which sectors have a
favourable impact on the organization respect to its environment

* Organization knows where its stands with


* Helps in formulating
appropriate strategy

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* Surroundings, external objects, influences or


circumstances under which someone or something exits

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* Socio-cultural factors
* Demographic characteristics
* Social attitudes * Educational level, awareness and consciousness
of rights

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* Environmental Factors

* Weather change
* Climatic change * Demand related factors

* Supplier related factors

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* Political factors

* Political system
* Political structure, its stability * Government policy and its intervention

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* Legal Factors

* Policies related to licensing , monopolies


* Policies related to export and import * Policies related to distribution and pricing

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* Dividing the environment into different


sectors.

* Analysing the impact of each sector on the


organization.

* Subdividing each environmental sector into sub


factor.

* Impact of each sub sector on organization in


form of a statement.

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+Help to determine the key threats


opportunities.

and

+Good tool to qualify the factors related to


companys strategy.

+Can consider many factors for each special


case.

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- It doesnt show the interaction between the


factors.

- It cant reflect the dynamic environment.

- Its a subjective analysis tool.

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Marketing Intermediaries Availability of skilled workers Suppliers

Industrial relation climate

Micro Environment

Market Types

Regulatory Provisions

Market Demand

Financial Institutions

Competition

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Trends T1 T2 . .
+2 +1 0 -1 -2

Probability of Occurrences

Impact on strategies S1 S2 S3

Extremely favorable impact Moderately favorable impact No impact Moderately unfavorable impact Extremely unfavorable impact

Degree of quality of impact on each trend on different strategies

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Macro Environment Micro Environment

Relevant Environment

Firm

Internal Environment

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Sales of Passenger Cars in India is likely to grow at an average of 14.9% each year to touch the 2.1 million mark by 2011 (Source: Frost n Sullivan)

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S. No. 1.

Environmental Factors Macro-Economic Factors -Per capita Income -Loans Availability - Interest Rates

Opportunity /Threat

Reasons/Remarks

Rising PCI means more affordability. (Sixth Pay Commission) Banks are not sceptical in giving loans. People cant pay easy instalments

2.

Social/ Demographics Factors -Urbanization ( 28% to 40% by 2020 ) Middle Class Increasing -Penetration Levels -Labor (JVs)

-Growing Working Class (Ex. BPO) -Improving Public Transport

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Demand for Passenger cars Sales are increasing at a YOY of over 60 % in the long run. LOW (10 per 1000) India has one of the cheapest labour available hence many foreign companies are eyeing to merge with Indian players. Resulted in more no of cabs. With an advent of projects like Delhi Metro .
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S. No . 3.

Environmental Factors

Opportunity /Threat

Reasons/Remarks

Policy -Import Duty -Excise Duties -FDI -Regulatory Issues like Acts, Safety Standards etc.

4. Technology -Emission Standards

Currently import duty is 100%. Excise duty has been reduced from 16 %to 14%. 100 % FDI is allowed . MVA 1988 and MVR 1989 which promotes use capital intensive technology Bharat III resulting in dependence on other countries for technology Excise duty has been reduced from 24 % to 12 %. With upcoming Bio- fuels ,LPG & CNG. India has one of the 27-11-2010 cheapest IT Resources.

-Hybrid Cars
-Fuels -IT (CAD/CAM, Design and Automation)


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S. No. 5.

Environmental Factors Industrial Factors

Opportunity

/Threat

Reasons/Remarks

-Raw material price

Steel Prices have touched Rs 5000 since May 2010

6.

Business Environment -ROCE -Expansion Plans of Incumbent players In future has huge capacity plans which will give the incumbent companies a cost advantage. With players like Hyundai and TATA having ROCE of 9% and 32%.

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*Presented By,
>Deval Naik >Ashley T >Tushar Sharma >Rohit Kulkarni

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