Discuss key areas of uncertainty related to trends or events that potentially could impact the company’s strategy.

Strategic Management- Environment Analysis

Purpose:  This assignment is the first of three assignments.  Students will use the 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 position in a competitive market.

Monitoring competitors’ performance is a key aspect of performing an external environment analysis.  This assignment provides students the opportunity to evaluate the competitive position of one of the organizations listed below and integrate that information in an External Factor Evaluation (EFE) matrix and Competitive Profile Matrices (CPM).


Students also have the opportunity to review an organization’s objectives and goals and the key functional areas within the organization. Performing an internal environment analysis helps assess a firm’s internal resources and capabilities and plays a critical role in formulating strategy by identifying a firm’s strengths to overcome weaknesses.  In completing the internal environmental analysis students will construct an Internal Factor Evaluation (IFE) matrix and calculate financial ratios.



Part I

Students will perform an external analysis on a company from the list below or from a list of companies provided by the instructor.

  •          Spirit Airlines


Step 1:  Create a double-spaced, 12-point font Word or Rich Text Format (RTF) document.  The final product will be between 5-6 pages in length excluding the title page, exhibits and reference page.


Step 3:  Follow this format:

  • Title page with assignment title, your name, the course, the instructor’s name;
  • Introduction;
  • Comprehensive Written Analysis:
    • External Environmental Analysis
    • Internal Environmental Analysis

Step 4:  In writing the analysis, the writing is in the third person.

 Part 1:  External Environmental Analysis


  •          Use tools, concepts and information from your own research, perform an external analysis of the company’s environment.

1) an industry analysis and

2) a competitive analysis.  Use the top two competitors plus the company selected from the list above or the list provided by the instructor;

  •          Analyze the market environment and identify opportunities and threats that challenge the organization;
  •          Construct an EFE for selected company,
  •          Develop a CPM for selected company;
  •          Evaluate trends significant to the industry and company.
  •          Discuss key areas of uncertainty related to trends or events that potentially could impact the company’s strategy.


Part 2 Internal Environmental Analysis


  •          Identify the company’s mission, vision and objectives;
  •          Provide a company background;
  •          Perform an internal analysis:

o   Corporate Level Strategy

o   Business Unit Level Strategy

o   Functional Level Strategy

o   Assess the company’s interactions with its stakeholders, the organizational structure, the organizational culture, and communication/decision making among managers within human resources, marketing production, operations, finance and accounting, R&D, and computer information systems, which can be accomplished by viewing the company’s website, interviews, and surveys.

  •          Identify company strengths and weaknesses.  What must the company do to perform successfully in the industry?
  •          Construct an IFE Matrix for selected company;
  •          Perform a financial analysis for the last reported fiscal year:

o   Use the company’s income statement and balance sheet and calculate key (emphasis added), but no less than 10 key financial ratios to the business;

o   Research the industry average financial ratios for the same ratios above and record in a second column;

o   In the third column, indicate whether the company’s ratio is a strength, a weakness or a neutral factor.

  •          Discuss what strategies would allow the company to capitalize on its major strengths;
  •          Discuss strategies that would allow the company to improve upon its major weaknesses.



Create an introductory paragraph.  The Introduction should clearly and concisely convey the main points of the assignment’s requirements. Review the following website to learn how to write an introductory paragraph:  http://www.writing.ucsb.edu/faculty/donelan/intro.html

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