It describes the procedures followed for the selection of the sample, the questionnaire design and statistical methods used. In an effort to achieve sustainable competitive advantage, it is essential to study the environment of the organization and evaluate the environmental influences on the organization and relate the degree of change to strategic approaches - both prescriptive and emergent.
THE PROBLEM STATEMENT
OBJECTIVE OF THE STUDY
BENEFITS OF THE STUDY
LIMITATIONS OF THE STUDY
ASSUMPTIONS
DEFINITION OF TERMS
Relevant questions related to consulting finns were included in the questionnaire that was sent to the manufacturing companies for completion. The extent to which each of the five competing powers exerted competitive pressure on the Finns.
SUMMARY OUTLINE PER CHAPTER
A report on and interpretation of the results of the statistical analysis applied to data collected from the research. A discussion of the results obtained from the research in relation to the purpose and motivation of the study.
CONCLUSION
This study focuses primarily on the value and scope of the environmental scanning process in relation to strategy formulation. However, it is important to also examine key aspects of the strategy formulation process.
INTRODUCTION
The development of any strategy will need to be done with an understanding of the environment within which the organization operates. Strategists are convinced that an understanding of the environment is essential in the development of strategy.
INDUSTRY /EXTERNAL FACTORS
A thorough understanding of the industry's life cycle is an integral part of environmental analysis. Identifying industry drivers is essential, as these key drivers are what drive industry change and competitive conditions. Before adopting a strategy, organizations must identify the dominant drivers and assess the impact they will have on the industry (Thompson and Strickland: 2001: 94).
To succeed, strategists must identify what the driving forces are and assess the impact they will have on the sector.
INDUSTRY COMPETITION: PORTER'S 5 FORCES MEDAL
New entrants are attracted to an industry when profit margins are high and barriers to entry are low. New entrants need to examine the brand strength and financial strength of existing companies. Often the total investment required to successfully enter the market is extremely high and limits the number of new entrants.
The level of competition and the number of new entrants will depend on the cost of capital required to acquire market share.
COMPETITOR PROFILING
Objectives - Knowing what the competitor wants to do is essential to implement an appropriate strategy. The competitor's objectives will determine his stance in the market - whether he is aggressive or moderate. Current Strategies - Assessing the competitor's approach to change, technology, customer care and finance is helpful.
A company that can predict its rival's next move and beat it as the first mover can gain a significant competitive advantage.
KEY FACTORS FOR SUCCESS
PROFIT ABILITY PROSPECT FOR THE INDUSTRY
Whether competition currently enables sufficient profitability and whether competitive forces will become stronger or weaker. The company's competitive position in the industry and whether this position is likely to strengthen or weaken. The company's potential to take advantage of the vulnerabilities of weaker rivals (perhaps turning an unattractive industry situation into a potentially rewarding business opportunity).
Whether the company is able to defend against or prevent factors that make the industry unattractive.
COMPANY SITUATION ANALYSIS
The company's current strategy is actually being tested to determine what changes are needed to ensure sustainable competitive advantage. The company must identify its resource gaps and take steps to improve its resource base. This will help the company to take advantage of opportunities and utilize its resources to gain a competitive advantage.
Value chain analysis is ideal for identifying which activities support the competitive advantage enjoyed by the company.
COST COMPETITIVENESS
Management must be able to distinguish between moderate threats and those that can have a serious impact on one. Management must successfully pursue opportunities that match the firm's resource capacity and take steps to defend the firm against external threats. Strategic cost analysis helps managers compare how well they are managing their value chain compared to their competitors.
Overall, if a company manages its value chain activities better than its competitors, it can build valuable competencies and use them to achieve sustainable competitive advantage.
COMPETITIVE STRENGTH ASSESSMENTS
Knowing its strengths and weaknesses relative to its competitors will allow a company to take specific actions to strengthen its long-term competitive position. Knowing the vulnerability of its competitors can give a company the advantage to adopt a more energetic stance and attack the competitor's market share. The organization itself may therefore be a member of other strategic groups with other products or services.
STRATEGIC ISSUES FACED BY THE COMPANY
Management should use all analyzes performed to make the right decisions so that the company can become financially and competitively successful. 2001: 144) will help management determine whether to continue with the current strategy, or revise the existing strategy and embark on clear new strategies that will better suit the company's external environment and its strengths and capabilities from the company. Is the current strategy adequate to protect and improve the company's market position in the face of the five competitive forces – especially those that are expected to become stronger?
Should the current strategy be adjusted to better respond to the driving forces operating in the sector?
ORGANISATIONAL STRUCTURE AND STRATEGY
Business size is, for the most part, a good indicator of the relative availability of resources available to undertake the task of business strategy formulation and the research required. Smaller local or regional firms will certainly have less use for global environmental information than larger global firms. Smaller firms, operating primarily in local or regional markets, do not have access to similar resources to undertake the global environmental scanning process.
This information will enable a proactive strategist to use such information to exploit opportunities, protect the company's market share and expand its competitive advantage.
CONCLUSION
A company can be harmed by emerging competitors or substitute products just as much as by current competitors. A good example is the failure of physical stores to appreciate the value of Internet marketing (KotIer: 2000). This forms the basis of the research instruments and techniques used to investigate the extent of environmental scanning carried out by manufacturing companies in Pietermaritzburg.
INTRODUCTION
THE CITY OF PIETERMARITZBURG
The report aims to establish a regional socio-economic database based on the declarations of the municipality's approximately 12,000 tax payers. The recent relocation of the South African Revenue Services and uncertainty over its capital status have had a negative impact on the local economy. The aim is to attract investment, which will lead to an increasingly profitable and productive use of the city's assets.
In the next chapter, a thorough analysis of the self-administered questionnaires is carried out as well as a critical comment on various aspects.
INTRODUCTION
DATA ANALYSIS: SECTION A
In larger companies, the Board of Directors is often not fully involved in daily operations and is often disconnected from the market. 62.5% of respondents indicated that their strategists are not assisted by external consultancies in formulating strategy. The role of external advisory Finns in the strategy-making process is a secondary aim of this study.
Respondents have indicated in subsequent answers to the questionnaire that they would use external advisory finns if such information complemented their own environmental scanning process and provided added value.
DATA ANALYSIS: SECTION B
B2 If you perform the environmental scanning/audit function, to what extent or scope is it performed regularly? A high percentage (68.75%) of respondents indicated that their strategists take on the external environmental scanning function. Of the companies that do carry out the environmental scanning process, 12 to 75% indicated that their environmental scans are limited to their sector.
Nevertheless, the respondents strongly agreed that environmental scanning could and should be expanded to a global basis.
DATA ANALYSIS: SECTION C
Question C2 aimed to determine whether companies changed the nature of their environmental scanning or strategy formulation in light of the 1998/99 global effect on the South African economy. Surprisingly indicated that they have not changed their environmental scanning processes despite the 1998/99 global economic turmoil or non-commitment on this aspect. Seven companies indicated that they had not changed their environmental scanning processes and 3 were non-committal.
Six companies believed that the global economic turmoil of 1998/99 had an impact on their environmental scanning process and strategy formulation.
IMPACT OF GLOBALISATION
Strategies can rarely be 'cast iron' and so stable that they can stand the test of time. Respondents clearly agree with this scenario and have confirmed that they have shortened the time horizon and increased it. Respondents overwhelmingly confirm that strategic planning and formulation has traditionally had a long-term objective.
However, fifteen respondents confirmed that, due to the impact of globalization on their business, they have shortened the time horizon and increased the frequency of strategy formulation and environmental scans.
CONCLUSION
INTRODUCTION
A more extensive study of the external environment can help a company avoid adopting a myopic view of its competitors. Such information can significantly contribute to the strategy formulation process by helping strategists gain a broader view of the external environment and identify any opportunities and threats that any specific company may face. To achieve a sustainable competitive advantage, there must be a strategic fit between the organization and its environment.
Conscious and planned strategies are essential, but they must be flexible and adapt to changing market conditions.
CONCLUSION
However, those who learn the art and science of strategy have an advantage over their 'unschooled' competitors (Finnie: I 994). What makes each strategy better than the other is the information available before the strategy is adopted. The collection and use of environmental data is what gives any company a competitive advantage over others.
This information can be obtained cost-effectively, and once combined with a company's internal resources and strengths, it can be individualized to provide a competitive advantage.
BIBLIOGRAPHY
CJ Are strategists fully aware of the impact of global events and the impact such events will have on their businesses in the short and long term. A4.2 Are any of the above assisted by external consulting firms in the strategy formulation process. i . a) the industry(s) in which the firm operates, as described by Professor Michael Porter of Harvard Business School, with all sources of competitive advantage attributable only through the 5 forces of industry and all influences beyond the industry that affect firms equally and not a source of competitive advantage. b) the external macro environment beyond the industry, consisting of political, environmental, technological and social forces.
We currently use the services of an external consulting firm to provide or assist with strategy formulation.