UNIT-II

TOPIC
“ETOPS ANALYSIS”

SUB:- BUSSINESS POLICY

BY:- DR. SUSHMA SHARMA
MEANING:- ETOP
 ETOP analysis (environmental threat and
opportunity profile) is the process by
which organizations monitor their
relevant environment to identify
opportunities and threats affecting their
business for the purpose of taking
strategic decisions.
Who has given ETOP analysis?

There are many techniques available for

environmental appraisal (assessment), one such
technique suggested by Glueck is ETOP the
preparation of ETOP involves dividing the
environment into different sectors & then analyzing
the impact of each sector on the organization.
ETOP ANALYSIS
Why is ETOP analysis Important?

 profile is a technique of environment analysis

was organizations make of profile of their
external environment.
 ETOP analysis provides information about

environment threats & opportunities &

their impact on strategic opportunities for
the company.
 It helps in making decisions based on future

environment.
WHY IS ETOP NEEDED
ETOPS:- EXAMPLE
• For example, GE Oil & Gas as an existing
organization in this sector requires to scan the
environment from an industry perspective: O&NG
industry is divided into three major sectors –

• upstream,
• midstream
• downstream
PREPARING ETOP
Dividing the environment in different sector.

✓ Analyzing 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.
ETOP, PROFILE INVOLVES
ETOP analysis provides information about
external environment threats & opportunities
& their impact on strategic opportunities for
the company. The profile contains mainly 3
issues, they are-

1] Forecasting
2] Verbal Written information
3] Management Information System [MIS]
1] Forecasting
 Forecasting means predicting the future events
& analyzing their impact on present plans
business organizations analyze the
environment but applying various techniques
to forecast government is used to formulate
business plans & strategies
2 Verbal Written Information:-
 Verbal information is collected but hearing &
written information is collected by reading articles,
journals, newspaper, newsletters etc.., common
sources of information are radio, television,
workforce, outsiders.
 It informs changes in the environment & prepares
business organization to incorporate than in their
business plans & strategies.
3] Management Information System

 It is a formal method of making available to

management to management the accurate & timely
information necessary to facilitate the decision
making proceeds & enable the organization
planning, control & operational functions to be
carried out effectively.
 It helps in making decisions based on future
environment
The Profile Involves:- ETOP
A] ENVIRONMENTAL
FACTORS
1] Economic factors:
✓ General economic condition.
✓ Rate of inflation.
✓ Interest rate/Exchange rate
3] Socio cultural factors:
✓ Demographic
characteristics.
✓ Social attitudes.
✓ Education level, awareness,
and consciousness of rights.
2] Technological factors:
✓ Source of technology.
✓ Technological development.
✓ Impact of technology
4] Environmental factors:
✓ Weather change
✓ Climatic change.
✓ Demand related factors.
✓ Suppliers related factors
 CONTI…
5] Political factors: 6] Legal factors:
✓ Political system. ✓ Policies related to licensing ,
✓ Political structure, its goals and monopolies.
stability. ✓ Policies related to export and
✓ Government policies , degree of import.
intervention ✓ Policies related to distribution
and pricing
 ETOPS :- FACTORS
S.No FACTORS COULD INVLOVE

1 POLITICAL international trade taxation policy

2 ECONOMIC interest rates, exchange rates, national income,

inflation, unemployment, Stock Market

3 SOCIAL ageing population, attitudes to work,

income distribution

4 TECHNOLOGICAL innovation, new product development, rate of

technological obsolescence

5 ENVIRONMENT global warming, environmental issues

6 LEGAL competition law, health and safety, employment law

B] THREAT MATRIX

HIGH

ATTRACTIVENESS

LOW

HIGH LOW

PROBALITY OF ACCURANCE
 C] OPPURTUNITY MATRIX

HIGH

ATTRACTIVENESS

LOW

HIGH LOW

PROBALITY ACCURACY
 ETOP: PROS
Pros
✓ Help to determine the key factor of threats and
opportunities.
✓ Good tool to qualify the factors related to company’s
strategy.
✓ Can consider many factors for each special case.
✓ It provides a clear of which sector & subsectors have
favourable impact on the organization.
✓ It helps to interpret the result of environmental analysis.
✓ The organization can assess its competitive position.
✓ Appropriate strategies can be formulated to take
advantage of opportunities & counter the threat.
Cons

✓ It doesn’t show the interaction between the

factors.
✓ It can’t reflect the dynamic environment.
✓ It’s a subjective analysis tool
 THANK YOU