Week 6 External Environmental Report - Brittany...

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EXTERNAL ENVIRONMENT REPORT Week 6: External Environment Report Brittany Jamison University of Maryland Global Campus MGMT 670 Strategic Management Capstone June 30, 2020 1
EXTERNAL ENVIRONMENT REPORT Introduction External analysis typically is done when an organization is entering a new market, or when they are trying to position themselves successfully to compete in the market. The external environment is more complex than the internal environment so we will be using the PESTEL framework to see the current conditions, Five-Forces Model, the Strategic Group Map, and a SWOT analysis to analyze the external factors of a business. The external factors consist of “external conditions and forces that have the potential to influence the organization.” (Lowengrub, 2020). In this report I will examine the external factors of my current place of employment, a local home security company based out of Dallas, TX know as American Defense Systems (ADS). Current Condition The PESTEL Framework (PESTEL) is done as an advantage before the SWOT analysis is performed. It looks at the six most common macro-environmental factors: political, economic, social, technological, environmental, and legal. (Lowengrub, 2020). The basis for this framework is looking at it from a strategy perspective and identifying opportunities and threats in the market to determine their current position. The framework will be able to identify specific significant relevant factors for a SWOT analysis to be performed after to classify them as either opportunities or threats. (Lowengrub, 2020). All the aspects of the PESTLE are critical for an industry a business might be in. The framework will be able to not only define what a company should do, but also account for an organization’s goals and the strategies stringed to them. (What is PESTLE Analysis? A Tool for Business Analysis, 2019) Below is a PESTEL framework for ADS to define and demonstrate these six external factors that impact a company. 2
EXTERNAL ENVIRONMENT REPORT Political Political factors are the ones that the government has influencing the economy. Some of the common examples the government has are tax policies, fiscal policy, trade tariffs, etc. (What is PESTLE Analysis? A Tool for Business Analysis, 2019) These changes in government effect the economy, which in return effects the business environment. For ADS, some of their political factors that affect their business environment is the Freedom of the press. Anyone can go and write a review, it is their right to circulate their own opinions. This right can either make or break the company depending on what is being circulated. Economic Economic factors “are determinants of an economy’s performance that directly impacts a company and have resonating long term effects.” (What is PESTLE Analysis? A Tool for Business Analysis, 2019) One common example of this is a rise in the inflation rate. This rise in the economy would affect the way companies’ price their products and services. This rise will

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