company analysis
rt1911
Tool3ExternalFactorEvaluationMatrix.pptxStrategic Management Tool Three
MGT 4810
Dr. Amye Melton
Tool Three
Analysis of the Remote Environment
We are now moving to the EXTERNAL opportunities and threats. There are 5 areas of the Remote Environment.
Political
Economic
Social
Technological
Ecological
Tool Three
Step One
Identify 5 variables for each area of the remote environment that impact your organization.
Step Two
Using the “Jury of Executive Opinion” rank each variable according to the importance it plays for your organization. The totals of your ranking should equal one. See the next slide for an example. You will need to do this for each of the five areas of the remote environment.
Tool Three
Step Three
You will make two decisions based on information you have ascertained about your organization. You will decide on a scale of 1 to 5 (5 being the highest) if your organization is in an unattractive to attractive position in the present and then where you believe they will be in 3 to 5 years.
Step Four
Weight X Position = Rating
Step Five
Determine if the variable is a Threat or Opportunity
Tool Three
Step Six
Add up the Present Rating column
Add up the Future Rating column
Step Seven
Conclude with a summary of all variables and factors analyzed and indicating the opportunities and threats identified. This is a narrative, consisting of an explanation on each area of the external environment.
Key Points
Use Appendix 3 for resources in establishing factor trends.
Manufacturer’s inventory levels are not appropriate for service organizations.
A variable does not move more than one bar in a 3 to 5 year period.
You will have a total of 5 charts and 5 short paragraphs for this tool. Use the example provided as a guide for the charts.
