External Remote Environment Analysis
Order Instructions:
As mentioned in the previous papers that I submitted, this papers are all connected and the same company will be use throughout the entire course . The writer must pay attention to that and continue to note that some of the information will also be carry forward to the next paper. For this paper, the writer will have to follow the instructions included hear below to respond to the questions raise at the end of the instructions. the writer will use pear-review articles to support the facts in the paper.
When planning a vacation, you may do research on a variety of external factors that can impact the quality of your trip. Some of these factors, such as transportation costs and flight delays or road construction, will have a similar impact on the plans of a large number of travelers. Others, such as the expected weather conditions and location of attractions, are related to the specific area in which you plan to vacation.
Like travelers planning for a trip, organizations must carefully monitor the external environment in which they plan to operate. Organizations have a number of tools to aid them in doing this successfully. A General Forces Analysis encourages organizations to examine broad trends and forecasts that could potentially impact a broad range of organizations. Porter’s Five Forces Analysis allows organizations to more closely examine external forces that may impact profitability, which are closer to the specific organization. Taken together, the results of these analyses provide a comprehensive picture of the external environment of a specific organization.
To prepare, review this Learning Resources at the bottom of the page. Begin searching for scholarly peer-reviewed resources on General Forces Analysis.
(Note: You will also use the General Forces Analysis and Porter’s Five Forces Analysis in Part I of your SSP.)
Prepare both a General Forces and a Porter’s Five Forces analysis of the industry of the organization you selected for your SSP (Apple Inc.). Your total response should be 4 minimum paragraphs.
– Using General Forces analysis, identify trends and forecasts in each of the five categories of forces in the industry environment in which your organization exists.
– Explain the impact of these trends and forecasts on the industry.
– Next, using Porter’s Five Forces analysis, identify external forces that might impact the organization’s profitability and why.
– Identify potential opportunities or threats created by these five forces. Justify your response.
– Finally, evaluate the utility of General Forces Analysis and Porter’s Five Forces analyses for developing organizational strategy.
– Identify 3–5 opportunities, and 3–5 limitations for each analysis tool.
Extend the conversation by identifying implications for practice or research, as well as for your own research agenda, where appropriate. Be sure to integrate one or two new related, and engaging, questions that will extend the discussion about your paper in constructive ways. Try to think of a question that will engage your peers in critical analysis and thinking about your organization, which may provide insight for your use as you continue preparing your sections of the major Weeks 4 Sustainable Solutions Paper (SSP) due in this course.
Your response should have proper APA citations and adhere to all guidelines of APA style.
Resources
• Harvard Business School Press. (2005). Strategy: Create and implement the best strategy for your business. Boston, MA: Author.
o Chapter 1, “SWOT Analysis I: Looking Outside for Threats and Opportunities” (pp. 1–15)
The chapter briefly describes the concept and components of Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis before turning to the examination of threats and opportunities in the external environment. The authors stress the importance of examining the external environment. They identify specific elements to examine in an external analysis. These include work and lifestyle trends, customers, price sensitivity, and elasticity of demand, competitors, and emerging technologies. The chapter closes with a brief discussion of Porter’s Five Forces.
o Chapter 2, “SWOT Analysis II: Looking Inside for Strengths and Weaknesses” (pp. 17–28)
The chapter begins by describing the purpose of internal analysis before addressing three specific areas for consideration during such an analysis. The authors provide guidelines on how to analyze competencies and rate them against those of competitors. They also delineate aspects of financial performance and company culture that should be considered during internal analysis. They close the chapter by presenting a specific model for conducting internal analysis.
o Chapter 3, “Types of Strategy: Which Fits Your Business?” (pp. 29–46)
The chapter describes four broad strategies commonly implemented by organizations: low cost leadership strategy, differentiation strategy, customer relationship strategy, and network effect strategy. The authors provide examples of organizations that have successfully implemented each strategy. They also explain several means by which each strategy may be successfully implemented. The chapter closes with an explanation of how to choose the best strategy.
• Dasgupta, M., Gupta, R. K., & Sahay, A. (2011). Linking technological innovation, technology strategy and organizational factors: A review. Global Business Review, 12(2), 257–277.
Dasgupta et al. (2011) states the essence of business growth in technological innovation and successful management lies in skillful allocation of resources to enact technological change. The authors summarize research in the area of technological innovation and technology strategy and present a relationship between the organizational factors supporting technological innovation and technology strategy. Additionally, Dasgupta et al. presents practical implications and a direction for future research
• Kaplan, R. S. & Norton, D. P. (2008). Mastering the management system. Harvard Business Review, 86(1), 62–77.
Kaplan and Norton (2008) propose a five-stage process for defining and implementing strategy, with implications for assessment via metrics and results.
• Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78–93.
This article is a reprise and expansion of the author’s original seminal work. In this modern version, the author updates his original thesis and applies the ideas to contemporary business strategy analysis.
SAMPLE ANSWER
External Remote Environment Analysis
General Forces and Porter’s Five Forces analysis is a tool designed to help evaluate competitive forces and the business strategy suitable for a firm in an industry it operates (Porter, 2008). If the forces in the industry operate wholesomely then it means that the industry is not attractive. The industry becomes more vulnerable if the level of competition is higher. The paper therefore uses Porters five forces to evaluate the industry Apple Inc., operates and not the firm itself. Therefore, on that premise, the assessment as well will apply to other firms in this industry such as IBM, Nokia and others.
Computer and Smartphone manufacturing has become a key sector as the world adapt to new forms of technology. The players therefore, must define their business before there analyze them using the porters five forces (Harvard Business School Press, 2005). The threats and forces in this market will not be similar to those in other markets outside such as Japan and China. The five forces has horizontal and vertical forces that affect and industry and therefore require analysis. Horizontal forces include threat of new entrants, competition in the same industry, and threat of established rivals and substitute products. On the other hand, vertical forces are those that originate from supply-chain or the vertical competition and include bargaining power of suppliers and bargaining power of customers. In summary using General Forces and Porter’s Five Forces analysis, it can be concluded that; the industry has low threats on new entrants, bargaining power of the customers/buyers is low, there is a threat of substitute products, suppliers have much bargaining powers and there is a significant level of rivalry among competitors. Based on this analysis, the industry is open to greater opportunities in future. The fact that the threat to new entrant is low; the company can use this opportunity to increase its sales in future. Bargaining power of buyers is low and therefore, the industry can have an upper hand hence will continue to reap handsomely. Threat to substitutes exists as different companies have products that offer alternative products. The bargaining power of suppliers is high and this is likely to increase the costs of supplies. The level of rivalry is significant hence, the industry is expected to adapt to appropriate strategies to reach to the customers and win over them. As discussed, these trends and forecasts have ramifications on the industry. To ensure that the industry remains competitive, the firms must continue to invest in quality and increase marketing. The industry as well may face an increase number of new entrants if the industry is perceived to be profitable.
Based on Porter’s five analysis, a number of factors may impact on the Apple Inc., profitability. One of the external forces that may affect profitability of the industry is the increased level of competition and rivalry. This will push the company profitability low as the firm adopts strategies to attract more customers. Higher level of bargaining power of suppliers will also reduce profitability on the industry (Narayanan & Fahey, 2005). Other forces include higher bargaining power, and increased number of substitutes. Other forces may include, stiff government regulations among others. Potential opportunities created by the five forces include increased number of customers through increased advertising. The industry is open to opportunity as the market share is yet to be exploited as is low. Threats includes, increase threats of new investors due to the perception that it is profitable. General Forces Analysis and Porter’s Five Forces analyses is used to developing organizational strategy because it provides vital information about the industry. Through this analysis, a firm like Apple gets insights on the industry at large hence can adopt suitable strategies to enable it gain a competitive edge (Apple Case Study, 2012).
The opportunities of these tools include, it is easy to use, and it provides insights about the industry and allows a firm to understand the competiveness of the industry. The limitations of the tool are that it may not provide accurate result because firms in an industry may vary due to circumstances. The tool requires good analysis and it may take considerable time to understand the industry as a whole because of the size. Therefore, this analysis is important and has implication for practice. Apple Inc., can use this information to understand the industry and adopt suitable strategies that can enable it achieve its goals. In such industry, it is expected that the company remains creative and innovative to remain competitive. The two questions that should be considered in this analysis are; does the size of the industry affect analysis using Porters Five forces? How can a firm use the tool to change its weakness into strengths?
References
Apple Case Study (2012). Apple Inc.: The Steve Jobs Effect. The Steve Jobs Effect, 1-16
Harvard Business School Press. (2005). Strategy: Create and implement the best strategy for your business. Boston, MA: Author.
Narayanan, V., & Fahey, L. (2005). The Relevance of the Institutional Underpinnings of Porter’s Five Forces Framework to Emerging Economies: An Epistemological Analysis. Journal of Management Studies, 42(1): 207-223.
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78–93.
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