Week 2: External Environmental Analysis
- What economic factors have to be considered in identifying an industry analysis?
- What competitive forces do companies face in an industry?
- What factors are driving industry change and what impacts will they have?
- What market positions do rivals occupy – who is strongly positioned and who is not?
- What strategic moves are rivals likely to make next?
- What are the key factors for future competitive success?
- Does the outlook for the industry present the company with an attractive opportunity?
Project 1: Starting an External Environmental Analysis
· Topps Tiles Plc (NBB:TPT)
BMGT 495 – Project 1: Starting an External Environmental Analysis (Week 2)
NOTE: All submitted work is to be your original work (only your work). You may not use any work from another student, the Internet or an online clearinghouse. You are expected to understand the Academic Dishonesty and Plagiarism Policy, and know that it is your responsibility to learn about instructor and general academic expectations with regard to proper citation of sources as specified in the APA Publication Manual, 6th Ed. (You are held accountable for in-text citations and an associated reference list only).
Project 1 is due Sunday at 11:59 p.m. eastern time of week 2 unless otherwise changed by the instructor.
This project is the first of four projects. This project provides the first steps in completing an external environmental analysis of your focal company’s strategic management plan. You will use tools and apply concepts learned in this and previous business courses to demonstrate an understanding of how organizations develop and manage strategies to establish, safeguard and sustain its competitive position in the 21st century’s (rapidly evolving/shifting/changing), uncertain hyper-competitive business environment.
Completing a company overview and assessing the general environment is a key aspect of performing an external environment analysis. This project provides you with the opportunity to evaluate the competitive position of one of the organizations listed below and integrate that information in the beginnings of a external environmental analysis.
The company you will be analyzing operates within the global market. You will assess the company in terms of the global industry. Industries differ widely in their economic characteristics, competitive situation and future profit potential.
In this project, you are presenting a report document. The expectation is that the report provides the level of details to help the audience grasp the main topics and to understand the General Environment.
Analysis is the operative word. In analyzing the external environment, you are expected to thoroughly research and take that research and break it into small parts to gain a better understanding of what is happening in the external environment of the business. In researching an industry, it is important to understand that every company within an industry is different so gathering information on one company does not mean that the collected information is relevant to other companies within that industry. When researching, parsing the material is critical to an accurate analysis. Avoid presenting just any information as that may lead to using irrelevant information.
You will then write the report in your own words to share the external analysis. You are expected to present information and support the ideas and reasoning using the course material and your research. You will not lift any information from source documents without properly citing and referencing. For the technical analysis aspect of the project, you are required to create the technique on your own and may not use from any source material that you happen to find. No work from a clearinghouse or similar website may be used or cited as a credible source.
Outcomes Met With This Project:
· utilize a set of useful analytical skills, tools, and techniques for analyzing a company strategically;
· integrate ideas, concepts, and theories from previously taken functional courses including accounting, finance, market, business and human resource management;
In completing the report, you will use the chapters in the eBook and other course material, and perform research on the company and industry in which the company operates and answer the required elements below in narrative form following the steps provided.
Step 1: Specific Company for All Four Projects
In this project, you will complete a Company Overview, an Evaluation of the General Environment and a conclusion.
You will be assigned by your instructor one focal company to complete the analysis. The assigned company must be used for all four projects in this course. You are not allowed to write the report on any other company different from the company specifically assigned by your instructor. If a company other than that assigned to you is used, a zero will be assigned.
The instructor will assign you a company from the list below. (Students may not select the company). All companies can be found on Mergent Online.
· Topps Tiles Plc (NBB:TPT)
· Students must complete the project using the assigned company. Deviating from the assigned company will result in a zero for the project. You will look for the company assigned to you in the Announcement area of the classroom.
Step 2: Course Materials and Research
· You are required to research information about the focal company and the internal environment for this project, You are accountable for using the course materials to support the ideas, reasoning and conclusions made. Course materials use goes beyond defining terms but is used to explain the ‘why and how’ of a situation. Using one or two in-text citations from the course materials and then relying on Internet source material will not earn many points on the assignment. A variety of source material is expected and what is presented must be relevant and applicable to the topic being discussed. Avoid merely making statements but close the loop of the discussion by explaining how something happens or why something happens, which focuses on importance and impact. In closing the loop, you will demonstrate the ability to think clearly and rationally showing an understanding of the logical connections between the ideas presented from the research, the course material and the question(s) being asked.
· Note: Your report is based on the results of the research performed and not on any prepared documentation. What this means is that you will research and draw your own conclusions that are supported by the research and the course material rather than the use any source material that puts together any of the tools or techniques whether from the Internet, for-pay websites or any pre-prepared document, video or source material. A zero will be earned for not doing your own analysis.
· Success: The analysis is based on research and not opinion. You are not making recommendations and you will not attempt to position the focal company in a better or worse light than other companies within the industry merely because you are completing an analysis on this particular company. The analysis must be based on factual information. Any conclusions drawn have to be based on factual information rather than leaps of faith. To ensure success, as stated above, you are expected to use the course materials and research on the focal company’s global industry and the focal company. Opinion does not earn credit nor does using external sources when course materials can be used. It is necessary to provide explanations (the why and how) rather than making statements. Avoid stringing one citation after another as doing so does not show detailed explanations.
· On the main navigation bar in the classroom select, Resources and then select Library. Select Databases by Title (A – Z). Select M from the alphabet list, and then select Mergent Online. You may also use Market Line and should be looking at the focal company’s Annual Report or 10K report. You are not depending on any one resource to complete the analysis. It is impossible to complete a Porter’s Five Forces, competitive analysis or OT by using only course material.
· You should not be using obscure articles, GlassDoor, or Chron or similar types of articles.
· Research for Financial Analysis: Financial Research
· Research for Industry Analysis CSI Market
· UMGC library is available for providing resources and services. Seek library support for excellence in your academic pursuit.
· Extensive library resources and services are available online, 24 hours a day, seven days a week at https://www.umgc.edu/library/index.cfm to support you in your studies. The UMGC Library provides research assistance in creating search strategies, selecting relevant databases, and evaluating and citing resources in a variety of formats via its Ask a Librarian service at https://www.umgc.edu/library/libask/index.cfm.
· Scholarly Research in OneSearch is allowed.
· To search for only scholarly resources, you are expected to place a check mark in the space for “Scholarly journals only” before clicking search.
Step 3: How to Set Up the Report:
· The document has to be written in Word or rtf. No other format is acceptable. Pdf files will not be graded. Use 12-point font for a double-spaced report. The final product cannot be longer than 8 pages in length, which includes all tables and matrices but excludes the title page and reference page. Do no use an Appendix.
· Create a title page with title, your name, the course number, the instructor’s name.
Step 4: Company Overview
· Provide a company overview, which is an essential component to the strategic management process. The company overview includes the purpose(s) for the founding of the company, i.e, what problems was it formed to solve and/or opportunities it was formed to exploit, who are the founders, home country or state, current management, employee headcount, last year’s revenue, etc.).
Step 5: Evaluate the General Environment
· Identify the global industry in which the company operates. This will come from Mergent Online.
· Discuss the company’s general environment by developing a PESTEL analysis. First, use the course material to identify the elements of the PESTEL and what components make up each element. Then, complete the analysis using research on the industry and the focal company. Be sure to thoroughly present and support the reasoning for what is presented. You may not use a PESTEL analysis that is already completed and available on the Internet. A zero will result if used as the analysis has to be the result of your research and your own development. NOTE: A PESTEL analysis is not a table and it is not a bulleted assessment.
· Identify and discuss one key trend for each letter of the PESTEL for the industry. Key trends are separate from the PESTEL analysis.
· Select one of the six trends identified in the previous requirement and discuss how the focal company could be affected by the selected trends.
· Discuss key areas of uncertainty related to the identified trend for the focal company that could potentially impact the company’s strategy.
· Perform a strategic analysis of the company’s mission, vision and objectives.
Step 6: Conclusion
· Create a concluding paragraph. The Conclusion is intended to emphasize the purpose/significance of the analysis, emphasize the significance/consequence of findings, and indicate the wider applications that are derived from the main points of the project’s requirements. You will draw conclusions about the findings of the external environment analysis.
Step 7: Review the Paper
Read the paper to ensure all required elements are present.
The following are specific requirements that you will follow. Use the checklist to mark off that you have followed each specific requirement.
Specific Project Requirements
Proofread your paper
Read and use the grading rubric while completing the paper to ensure all requirements are met that will lead to the highest possible grade.
Third person writing is required. Third person means that there are no words such as “I, me, my, we, or us” (first person writing), nor is there use of “you or your” (second person writing). If uncertain how to write in the third person, view this link: http://www.quickanddirtytips.com/education/grammar/first-second-and-third-person.
Contractions are not used in business writing, so do not use them.
Paraphrase and do not use direct quotations. Paraphrase means you do not use more than four consecutive words from a source document. Removing quotation marks and citing is inappropriate. Instead put a passage from a source document into your own words and attribute the passage to the source document. There should be no passages with quotation marks. Using more than four consecutive words from a source document would require direct quotation marks. Changing words from a passage does not exclude the passage from having quotation marks. If more than four consecutive words are used from source documents, this material will not be included in the grade.
You are expected to use the research and weekly course materials to develop the analysis and support the reasoning. There should be a robust use of the course material. Material used from a source document must be cited and referenced. A reference within a reference list cannot exist without an associated in-text citation and vice versa. Changing words from a passage does not exclude the passage from having quotation marks.
Use in-text citations and provide a reference list that contains the reference associated with each in-text citation.
You may not use books in completing this problem set unless part of the course material. Also, do not use a dictionary, Wikipedia or Investopedia or similar sources. You may not use Fern Fort University, Ibis World or any other for-fee website.
Provide the page or paragraph number in every in-text citation presented. Since the eBook does not have page numbers, include the chapter title and topic heading. If using a video, provide the minutes and second of the cited material.
Step 8: Submit the paper in the Assignment Folder (The assignment submitted to the Assignment Folder will be considered the student’s final product and therefore ready for grading by the instructor. It is incumbent upon the student to verify the assignment is the correct submission. No exceptions will be considered by the instructor).
Self-Plagiarism: Self-plagiarism is the act of reusing significant, identical or nearly identical portions of one’s own work. You cannot re-use any portion of a paper or other graded work that was submitted to another class even if you are retaking this course. You also will not reuse any portion of previously submitted work in this class. A zero will be assigned to the assignment if self-plagiarized. Faculty do nothave the discretion to accept self-plagiarized work.
NOTE: All submitted work is to be your original work. You may not use any work from another student, the Internet or an online clearinghouse. You are expected to understand the Academic Dishonesty and Plagiarism Policy, and know that it is your responsibility to learn about instructor and general academic expectations with regard to proper citation of sources as specified in the APA Publication Manual, 6th Ed. (Students are held accountable for in-text citations and an associated reference list only).
Week 2: Mar 23 – 29
Theme: The External Environment Assessment
To successfully craft a strategy that fits with a company’s situation, builds competitive advantage and improves performance, managers have to have insight into a company’s external and internal environment. The internal environment will be discussed in week 3. The external environment comprises all of the entities that exists outside of an organization’s boundaries that affect its growth and survival. An organization has little to no control over the external environment so there is a need to constantly monitor, prepare and adapt to the changes that occur. Understanding the information that comes from the external environment is crucial to an organization’s long-term planning and in identifying its competitor’s actions. Completing an external environmental analysis helps an organization update or adapt its internal core competencies, structure, culture or other internal environmental factors.
To identify and analyze the key drivers of change in an organization’s general business environment, a PESTEL analysis is completed. A Porter’s Five Forces is a framework that helps an organization analyze the level of competition within a specific industry and a partial SWOT (OT) helps identify the threats and opportunities that exist in the environment.
At this point, it is necessary to clarify a few points. An industry consists of a group of companies that are related based on their primary business activities. When you hear industry, this refers to the global industry and not to a specific country or region of the world. Individual companies are classified into an industry based on the largest source of revenue. Industries are grouped into larger categories called sectors. When you research using Mergent Online, both industry and sector are provided.
When completing either an external or internal environmental analysis, you should note patterns, trends and relationships as techniques that help with completing an analysis and that uncertainty reduces an organization’s ability to predict with confidence the future of its environment. A pattern is a series of data that repeats in a recognizable manner whereas a trend has to do with the general movement or change in a situation over time. Relationships have to do with how concepts, information, organizations, people are connected.
Mastering Strategic Management:
· Chapter 3: Evaluating the External Environment (Scroll down to see chapter readings)
· Hard Ball: Five Killer Strategies for Trouncing the Competition. (HBR)
· Porter’s (1980) Generic Strategies as Determinants of Strategic Group Membership and Organizational Performance
· Rumelt, R. (2011, June) The perils of bad strategy, McKinsey Quarterly.
· Bradley, C., Hirt, M. & Smit, S. (2011, January). Have you tested your strategy lately? McKinsey Quarterly.
· How to Stress-Test Your Strategy (10:15 minutes; transcript available)
Tools and Techniques:
You will be using the following tools/techniques in the projects. These tools are also part of the quizzes that you will complete so make sure you understand their use and how to do the calculations.
· External Factor Evaluation (EFE) Matrix
· PESTEL Analysis
· Porter’s Five Forces
· Using Porter’s Five Force Model
· The Five Competitive Forces That Shape Strategy (13:11 minutes)
· SWOT Analysis: How to perform one for your organization
Rubric Name: Project #1 15%
This table lists criteria and criteria group name in the first column. The first row lists level names and includes scores if the rubric uses a numeric scoring method.Criteria
Equivalent to an A
Equivalent to a B
Equivalent to a C
Equivalent to a D
Equivalent to an F
Thoroughly and correctly presents company overview describing the purpose of the founding of company, why company was formed, opportunities, founding father’s names, home country or state, current management, employee headcount, last year’s revenue, etc. all clearly and strongly supported by thorough research to explain the reasoning.
(0.81 – 0.9)
Missing one identified element of company overview; uses research that supports the reasoning and conclusions; needs some development.
(0.72 – 0.80)
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