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Etop

This document discusses environmental scanning and creating an Environmental Threat and Opportunity Profile (ETOP) to identify opportunities and threats affecting a business. It provides an example ETOP chart for a bicycle company that divides the environment into sectors like Economic, Market, and International. For each sector, it analyzes the nature of impact. The ETOP provides a clear picture of which sectors and factors have a favorable, unfavorable, or neutral impact. Creating an ETOP can help organizations understand their environment and formulate effective strategies.

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Mohamed Aadhil
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2K views11 pages

Etop

This document discusses environmental scanning and creating an Environmental Threat and Opportunity Profile (ETOP) to identify opportunities and threats affecting a business. It provides an example ETOP chart for a bicycle company that divides the environment into sectors like Economic, Market, and International. For each sector, it analyzes the nature of impact. The ETOP provides a clear picture of which sectors and factors have a favorable, unfavorable, or neutral impact. Creating an ETOP can help organizations understand their environment and formulate effective strategies.

Uploaded by

Mohamed Aadhil
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Environment Threat and Opportunity Profile (ETOP)

Meaning of Environmental Scanning:

Environmental scanning can be defined as the process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business for the purpose of taking strategic decisions.

Appraising the Environment:

In order to draw a clear picture of what opportunities and threats are faced by the organization at a given time. It is necessary to appraise the environment. This is done by being aware of the factors that affect environmental appraisal identifying the environmental factors and structuring the results of this environmental appraisal.

Structuring Environmental Appraisal:

The identification of environmental issues is helpful in structuring the environmental appraisal so that the strategists have a good idea of where the environmental opportunities and threats lie. There are many techniques to structure the environmental appraisal. One such technique suggested by Gluek is that preparing an ETOP for an organization. The preparation of an ETOP involves dividing the environment into different sectors and then analyzing the impact of each sector on the organization

Environment threat and opportunity profile (ETOP)


S. No Environmental bicycle company sector Economic Nature of Impact Impact of each sector

Up Arrow

Growing affluence among urban consumers rising disposable incomes and living standards

Market

Horizontal Arrow

Organized sector a virtual oligopoly with four major manufacturers, buyers critical and better informed overall industry growth rate not encouraging unsaturated demand systems.

International

Down Arrow

Global Imports growing but India's share shrinking Major importers are the US and EU but India exports mainly to Africa.

Up Arrow indicates Favorable Impact Down Arrow indicates unfavorable Impact Horizontal Arrow indicates Neutral Impact The preparation of an ETOP provides a clear picture to the strategists about which sectors and the different factors in each sector have a favorable impact on the organization. The organization knows where it stands with respect to its environment. Obviously, such an understanding can be of a great help to an organization in formulating appropriate strategies to take advantage of the opportunities and counter the threats in its environment.

Meaning of organizational Appraisal: The purpose of organizational appraisal is to determine the organizational capability in terms of strengths and weaknesses that lie in different functional areas. This is necessary since the strengths and weaknesses have to be matched with the environmental opportunities and threats for strategy formulation to take place.

Strategic Advantage Profile (SAP): A SAP can also be prepared directly when students analyses cases during classroom learning, without making a detailed OCP. An SAP provides a picture of the more critical areas which can have a relationship with the strategic picture of the firm in the future.

Meaning: The organizational capability profile is drawn in the form of a chart. The strategists are required to systematically assess the various functional areas and subjectively assign values to the different functional capability factors and sub factors along a scale ranging from values of -5 to +5

Meaning: SWOT Every organization is a part of an industry. Almost all organizations face competition either directly or indirectly. Thus the industry and competition are vital considerations in making a strategic choice.

It is quite obvious that any strategic choice made by an organization cannot be made unless the industry and competition have been analyzed. The environmental as well organizational appraisal dealt with the opportunities, threats, strengths and weaknesses relevant for an organization.

SWOT analysis criticized:


1.SWOT analysis consist of a long list of factors. 2.SWOT analysis does not consider priorities among factors. 3.the description of factor is imprecise 4.analysis of factors are not counterchecked at different levels with data. 5.the logical link between strategy implementation and SWOT analysis is missing. 6. considering any factor as strength or weakness is mainly based on the opinion and perception of decision makers.

Thank you

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