As a business professional, you may be asked to complete an external analysis of a firm using a PEST analysis and/or a Five Forces analysis, and to report on your key findings and make recommendations to leadership based on those findings through an executive briefing report. This assessment allows you to practice implementing both types of analysis, summarize your key findings, and make recommendations to leadership in an executive briefing report.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
- Competency 1: Apply strategic theories, models, and best practices to understand and explain an organization's strategy.
- Explain key findings from PEST analysis.
- Explain key findings from Five Forces analysis.
- Summarize key findings for the PEST and Five Forces models.
- Competency 2: Analyze the fit of the internal elements (resources, capabilities, goals, structures, systems, and values) with the organizational strategy.
- Recommend organizational strategies based on the external analysis.
- Competency 4: Communicate in a manner that is professional and consistent with expectations for members of the business professions.
- Write coherently to support a central idea (in appropriate APA format) with correct grammar, usage, and mechanics as expected of a business professional.
Competency Map
Context
In this assessment, we focus on the strategic fit with the industry environment, including corporate strategies to expand the scope of the firm to succeed in the current environment. The Wall Street Journal is a particularly good source for understanding how the strategic position of the firm within the industry environment is critical to assessing competitive advantage and an integral component of strategic analysis. This analysis helps drive strategic decisions determining the direction of the firm. Key points of analysis address corporate diversification, vertical integration, or internationally expansion.
We begin the environmental analysis at a macro environmental level with strategic tools such as the PEST (Political, Economic, Social, Technological) model to forecast how the organization's external environment might change and evolve over time.
We also look at the strategic elements of the industry—buyers, suppliers, substitutes, new entrants, and competitors. Porter's Five Forces strategic model can be used to determine an industry's potential for profit and evaluate the intensity of competition.
How profit is shared among competing firms in the industry is determined by the Key Success Factors (KSFs), which are the sources of competitive advantage in the firm's market environment that allow the firm to survive and prosper. To determine the KSFs in the firm's market environment, the firm must meet two criteria: 1) supply what customers want to buy, and 2) survive the competition. KSFs are key to analyzing the complexities, costs, and benefits of the corporate strategic choices-diversification, vertical integration, and globalization.
Reference
Grant, R. M., & Jordan, J. (2015). Foundations of strategy (2nd ed.). West Sussex, UK: John Wiley & Sons.
Questions
to Consider
As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as part of your assessment.
- From your research and readings, how could applying the PEST and Porter Five Forces Model assist you in identifying environmental and industry influences that may be a concern or present an opportunity to your organization?
- Consider future trends in society, technology, economics, environmentalism, and politics that can influence your organization. Be sure to look beyond your company's current market, product, and geographic boundaries. Identify two or three factors that are most likely to create dramatic turns in the company's future strategy. How can the organization prepare today for what might happen in three years?
- Consider changing one or more of these elements for a critical strategic issue you have identified for your organization. How would you craft a strategic recommendation that your organization could realize in no more than six months?
Resources
Required Resources
Use the Assessment 4 Executive Briefing Report Template to complete the assessment.
The resources provided here are optional. You may use other resources of your choice to prepare for this assessment; however, you will need to ensure that they are appropriate, credible, and valid. The MBA-FP6024 – Organizational Strategy Library Guide can help direct your research, and the Supplemental Resources and Research Resources, both linked from the left navigation menu in your courseroom, provide additional resources to help support you.
Capella Resources
Click the link provided for more background on your selected firm:
Internet Resources
- MindTools. (2016). PEST analysis: Identifying "big picture" opportunities and threats. Retrieved from https://www.mindtools.com/pages/article/newTMC_09.htm
- MindTools. (2016). Porter's five forces: Assessing the balance of power in a business situation. Retrieved from https://www.mindtools.com/pages/article/newTMC_08.htm
Capella University Library Resources
- McGahan, A. M., & Porter, M. E. (1997). How much does industry matter, really? Strategic Management Journal, 18, 15–30.
- Rumelt, R. P. (1991). How much does industry matter? Strategic Management Journal, 12(3), 167–185.
Harvard Business Review Articles
The following readings are available from the Harvard Business Review. Search for the article by following the instructions in the Library Guide:
- Kim, W. C., & Mauborgne, R. (2004). Blue ocean strategy. Harvard Business Review, 82(10), 76–84.
- Martin, R. (2002). The virtue matrix: Calculating the return on corporate responsibility. Harvard Business Review, 80(3), 68–75.
- Porter, M. E. (1987). From competitive advantage to corporate strategy. Harvard Business Review, 65(3), 43.
- Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78–92.
Bookstore Resources
The following resources are available for purchase from the Capella University Bookstore.
- Grant, R. M., & Jordan, J. (2012). Foundations of strategy. West Sussex, UK: John Wiley and Sons.
- Chapter 2, "Industry Analysis."
- Chapter 3, "Identifying the Organization's Resources and Capabilities," page 89 only.
- Chapter 7, "Corporate Strategy."
- Assessment Instructions
Overview
The organizational leadership of your selected firm has requested that you provide them with an executive briefing report outlining the key findings of an external analysis of environmental and industry influences that could impact the strategy of the firm. You are required to use two external analysis frameworks, PEST and Porter's Five Forces Model, to support your report.
Preparation
Review the organization and the industry before applying the strategic models below to your selected firm. You will need to use at least five current scholarly or professional resources for this assessment. Follow these steps:
1. Complete a PEST analysis for the selected firm. Be sure that this is based on research of the organization, not conjecture or opinion.
2. Complete Porter's Five Forces Model for the selected firm. Pay particular attention to the relationships of elements from both models.
Requirements
Using the results from both PEST and Porter's Five Forces models, write a 4–6-page executive briefing report for organizational leadership. An Executive Briefing Report