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Environmental threat and

opportunity profile (ETOP)


Definition:

An environmental threat and

opportunity profile is a description of the

structure of external factors.


Need of ETOP
1. It helps the organization to identify opportunities and
threats
2. Consolidates and strengthens an organizations
position
3. Provides strategists information on which sectors
have a favorable impact on the organization
4. The organization gains knowledge of its standing with
respect to its environment
5. Helps formulate strategies.
Steps in an ETOP
1. Identify major Environmental factors such as:
economic, political, social, technological, competitive,
geographical, etc.

2. Environmental factors are then sub-divided into


subsectors of each factor.

3. These factors are then analyzed to determine major


weaknesses and strengths in each of the subsectors.

4. The impact of each factor is then accessed as being


either favorable, unfavorable, or neutral.
Environment
Definition:

*Surroundings, external objects, influences


or circumstances under which someone
or something exists
Economic Factors
Economic factors affect the purchasing power
of potential customers and the firms cost of
capital.

These factors include: business cycle,


inflationary trends, consumption, employment,
investment, monetary, and fiscal policies.
Political Factors
Political factors are how and to what degree

government intervenes in the economy.

Political factors include: political power, ideologies,

interest groups, social stability, legislation, and

regulation.
Social Factors
Social factors impact an organization due to the social,

cultural, demographic, and environmental profiles in the

industry.

Social factors include: age distribution, geographic

distribution, income distribution, mobility, education, family

values, and business attitudes.


Technological Factors
Technological factors impact how an organization or

company operates in relation to equipment used in the

companys environment.

Technological Factors include: rate of technological change,

future raw material availability, raw material cost,

technological developments, and product life cycle.


Geographical Factors
Geographical Factors are important to the overall

analysis of a company.

Geographical factors include: plant/warehouse location,

relocation of facilities, headquarters, and foreign

markets.
Competitive Factors
Competitive forces at work in the industry and their
strength

Companies in the strongest/weakest competitive


position

Keys to competitive success


Managerial Factors
The Scientific Method

Teams

Diversity
Technical Factors

Manufacturing
Facilities

Collaboration
advantageS of ETOP

+Help to determine the key threats and opportunities.

+Good tool to qualify the factors related to companys


strategy.

+Can consider many factors for each special case.


Disadvantage of ETOP
-It doesnt show the interaction between the factors.
-It cant reflect the dynamic environment.
-Its a subjective analysis tool.

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