Active learning ideas
Evaluating the external environment is about understanding the 'rules of the game' that a business cannot control. This topic introduces PESTLE analysis and Porter's Five Forces as frameworks for identifying external opportunities and threats. Students examine how political shifts, economic cycles, and technological disruptions change the competitive landscape. This is particularly relevant in the UK context, where factors like post-Brexit trade relations and changing UK legislation on net zero significantly impact corporate strategy.
Activity 01
Provide groups with a stable business plan. Every ten minutes, announce a 'news flash' (e.g., a new sugar tax or a sudden interest rate rise). Groups must quickly adapt their PESTLE analysis and strategy.
How does PESTLE analysis help identify opportunities and threats?
Activity 02
Assign each group a different UK industry (e.g., supermarkets, airlines, independent coffee shops). They must use Porter's Five Forces to determine which industry is the most 'attractive' for a new investor.
What is the significance of Porter's Five Forces?
Activity 03
Students list six external factors affecting a local business. In pairs, they must agree on which two factors pose the greatest threat, forcing them to justify their reasoning based on the current UK economic climate.
How do external shocks impact strategic planning?
A few notes on teaching this unit
Watch Out for These Misconceptions
PESTLE is just a list of facts about a country.
PESTLE is only useful if it links to strategy. Students need to explain *how* a specific factor, like an ageing population, creates a specific opportunity or threat for a specific business.
Porter's 'Bargaining Power of Suppliers' just means prices are high.
It refers to the relative power in the relationship. If there are few suppliers and many buyers, the supplier holds the power. Role-playing a negotiation between a small farmer and a large supermarket helps clarify this.
Methods used in this brief
Mission, Corporate Objectives and Strategy
Students explore how corporate objectives are developed from the mission statement and how they shape strategic decision-making.
8 methodologies
Analysing the Internal Position
An investigation into financial and non-financial performance metrics to assess a firm's current strengths and weaknesses.
8 methodologies