HRM textbook

74 PART 1 INTRODUCTION
2 Explain with examples each
of the seven steps in the
strategic planning process.
FIGURE 3-3 Worksheet for
Environmental Scanning
STEP 1: DEFINE THE CURRENT BUSINESS The logical place to start is by
defining one s current business. Specifically, what products do we sell, where do we
sell them, and how do our products or services differ from our competitor s. For
example, Rolex and Casio both sell watches. However, Rolex sells a limited line of
expensive watches. Casio sells a variety of relatively inexpensive but innovative
specialty watches with features like compasses and altimeters.
STEP 2: PERFORM EXTERNAL AND INTERNAL AUDITS The next step
is to ask, Are we heading in the right direction? No one is immune to competitive
pressures. Yahoo! s search tool predominated until Google. Amazon s Kindle Reader
forced even more bookstores to close. Prudent managers periodically assess what s
happening in their environments.
Managers need to audit both the firm s environment, and the firm s strengths
and weaknesses. The environmental scanning worksheet in Figure 3-3 is a simple
Economic Trends
(such as recession, inflation, employment, monetary policies)
Competitive and Market Trends
(such as market/customer trends, entry/exit of competitors, new products from
competitors)
Political Trends
(such as legislation and regulation/deregulation)
Technological Trends
(such as introduction of new production/distribution technologies, rate of product
obsolescence, trends in availability of supplies and raw materials)
Social Trends
(such as demographic trends, mobility, education, evolving values)
Geographic Trends
(such as opening/closing of new markets, factors affecting current plant/office
facilities location decisions)