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Political future
Legislation, e.g. on taxation and employment law
Relations between government and the organization (possibly influencing the preceding
items in a major way and forming a part of future corporate strategy)
Government ownership of industry and attitude to monopolies and competition
Socio-cultural future
Shifts in values and culture
Change in lifestyle
Attitudes to work and issues
‘Green’ environmental issues
Education and health
Demographic changes
Distribution of income
Economic future
Total GDP and GDP per head
Inflation
Consumer expenditure and disposable income
Interest rates
Currency fluctuations and exchange rates
Political parties and alignments at local and national level
Investment – by the state, private enterprise and foreign companies
Cyclicality
Unemployment
Energy costs, transport costs, communication costs, raw material costs
Unit 4: External Assessment
Technological future
Government investment policy
Identified new research initiatives
New patents and products
Notes
Speed of change and adoption of new technology
Level of expenditure on R&D by organisation’s rivals
Developments in nominally unrelated industries that might be applicable
Environmental future
‘Green’ issues that affect the environment
Level and type of energy consumed – renewable energy?
Rubbish, waste and its disposal
Legal future
Competition law and government policy
Employment and safety law
Product safety issues

Some strategists may comment that the future is so uncertain that prediction is useless. If this
view were true, then strategic management would not be playing such a significant role in
organisations today. It is recognized that the future cannot be controlled, but by anticipating the
future, organisations can avoid strategic surprises and be prepared to meet environmental
changes.
SWOT Analysis
SWOT analysis is discussed in more detail in Unit 5.
ETOP
Environmental Threats and Opportunities Profile (ETOP) gives a summarized picture of
environmental factors and their likely impact on the organisation. ETOP is generally prepared
as follows.
1. List environmental factors: The different aspects of the general as well as relevant
environmental factors are listed. For example, economic environment can be divided into
rate of economic growth, rate of inflation, fiscal policy etc.

2. Assess impact of each factor: At this stage, the impact of each factor is assessed closely and
expressed in qualitative (high, medium or low) or quantitative factors (1, 2, 3). It is to be
noted that not all identified environmental factors will have the same degree of impact.
The impact is assessed as positive or negative.
3. Get a big picture: In the final stage, the impact of each factor and its importance is combined
to produce a summary of the overall picture. An example of ETOP is given below:

Table 4.1: Environmental Threat and Opportunity Profile (ETOP)
Environmental Factors Impact of each factor
Economic (+) Rising income levels
(–) Price competition
Social (–) Change in lifestyles
(–) Change in consumer tastes
Technological (+) Product becomes unique
(–) Acquisition of new technology is expensive
Customer (+) Loyalty is high
(+) Buyer preference for differentiated goods
Supplier (–) High input costs
(+) Improved quality

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