CIPS External Factor Evaluation EFE and Competitive Profile Matrix CPM Planning

CIPS External Factor Evaluation EFE and Competitive Profile Matrix CPM Planning

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THE EXTERNAL ASSESSMENT The Nature of an External Audit Economic Forces Social, Cultural, Demographic, and Environmental Forces Political, Governmental, and Legal Forces Technological Forces Competitive Forces Competitive Analysis: Porter’s Five-Forces Model Sources of External Information Forecasting Tools and Techniques The Global Challenge Industry Analysis: The External Factor Evaluation (EFE) Matrix The Competitive Profile Matrix (CPM) 1. Describe how to conduct an external strategic-management audit. 2. Discuss 10 major external forces that affect organizations: economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive. 3. Identify key sources of external information, including the Internet. 4. Discuss important forecasting tools used in strategic management. 5. Discuss the importance of monitoring external trends and events. 6. Explain how to develop an EFE Matrix. 7. Explain how to develop a Competitive Profile Matrix. 8. Discuss the importance of gathering competitive intelligence. 9. Describe the trend toward cooperation among competitors. 10. Discuss the political environment in Russia. 11. Discuss the global challenges facing American firms. OVERVIEW This paper examines the tools and concepts needed to conduct an external strategic-management audit (sometimes called environmental scanning or industry analysis). An external audit focuses on identifying and evaluating trends and events beyond the control of a single firm, such as increased foreign competition, population shifts to the Sun Belt, an aging society, information technology, and the computer revolution. An external audit reveals key opportunities and threats confronting an organization, so managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats. This paper presents a practical framework and guidelines for gathering, assimilating, and analyzing environmental information. EXTENDED OUTLINE WITH TIPS 38
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I. THE NATURE OF AN EXTERNAL AUDIT The purpose of an external audit is to develop a finite list of opportunities that could benefit a firm and avoid threats. VTN (Visit the Net): http://horizon.unc.edu/projects/seminars/futuresresearch/strategic.asp#planning describes how strategic planning evolved from long range planning and environmental scanning. A. Key External Forces 1. External forces can be divided into five broad categories: (1) economic forces; (2) social, cultural, demographic, and environmental forces; (3) political, governmental, and legal forces; (4) technological forces; and (5) competitive forces. 2. Relations among these forces and an organization are depicted in Figure 3-2 in the textbook. External trends and events significantly affect all products, services, markets, and organizations in the world. 3.
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CIPS External Factor Evaluation EFE and Competitive Profile Matrix CPM Planning

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