Understanding the External Environment
• How would you define the industry?
• Is the industry global?
• Is the organisation Australian or overseas based?
• Can you make any inferences about the industry value chain from the case?
• What are the key product and services segments in the industry?
• Are you able to identify the stage of the industry life-cycle?
• What have been the remote environment trends that have driven the industry to its current state?
Are these factors changing?
What will be their impact on future growth in the industry?
Use PESTEL to analyse these trends – in particular using the “Issues for consideration” within each factor in the Study Guide.
• What are the forces within the industry that determine the current profitability of the industry?
Are these forces changing?
What will be their impact on the future profitability of the industry?
Use Porter’s Five Forces to analyse this information – in particular using the “Issues for consideration” within each force in the Study Guide.
• What are the different customer market segments in the industry, and can you make an assessment of what drives customer demand in them?
• Given your remote and industry environment analyses, and your customer and market analysis, are you able to assess the basis of competition in the industry?
• What are the key factors that are critical for the organisation to do well in order to be successful?
• Are there any strategic groups that organisations in the industry compete in?
Understanding the Internal Environment
• Who are the key stakeholders of the organisation, and what are their expectations from the organisation?
• What are the strategic drivers of the organisation?
• What is the current business strategy of the organisation?
• Is the current business strategy aligned to the expectations of the key stakeholders?
• Is the organisation’s performance and capabilities aligned to its strategy?
• Identify the capabilities of the organisation and analyse them to determine whether these capabilities are strategic capabilities.
• Are there are any inconsistencies (gaps) between the current business strategy and the remote environment, the industry environment and the performance of the organisation compared to its key competitors?
Bringing the Internal and External Environment analyses together
• Depending on the case you may at this point review any gaps identified and perform an extended SWOT analysis to reveal possible alternatives and strategies that the organisation could pursue.
• These will often relate to improving the operational side of the organisation at this point. Strategic growth options usually fall into the category of new products and/or new markets, which is covered next.
Product and Market Development
Next you need to use the content to consider the product and market development options applicable to the case facts.
• What are the options for product and/or market development for the organisation?
Use Ansoff’s classifications to evaluate.
• Does the organisation have a strategy regarding development of new products or expanding its markets to remain competitive and/or to grow? Or is it possible that the company is taking another approach to growth (e.g. vertical integration)?
• If the organisation is considering new product development, review the important aspects to consider, including the key success factors for new product development.
• If the organisation is considering new market development, is the organisation trying to enter a new customer or geographic market, or both?
• What are the important considerations for new market development? Consider the strategic objectives for new market entry, evaluating the attractiveness of new markets, the key success factors for new market development and the advantages and disadvantages of different modes of market entry.
Consider the accounting challenges that moving into new products or markets are