Forces and Trends Wk2 Mba580
Forces and Trends Wk2 Mba580
RUNNING HEAD: Forces and Trends
Forces and Trends Paper
University of Phoenix
Introduction
Strategic adaptability is an organization’s capacity to identify major changes in its external environments, quickly commit resources to new courses of action in response to such changes (Brown, 2007). Being adaptable means leaders must not become complacent in the way they look at the world. The organization must view change as an inevitable and essential part of an organizations growth, in order to achieve this adaptability (2007). However, strategic adaptability also includes planning for change and using research to identify trends in the firm’s remote, industry and operating environment.
Part of the strategic planning process involves monitoring specific trends, which are of interest to a firm (Morrison, 1987). A firm uses forecasting to predict the future of those trends and then sets organizational objectives in response to their forecasts (1987). Next, the firm implements operational plans based upon their objectives, while monitoring the effects of their plans on those selected trends and issues. However, the must recognize the need to continuously monitor the external environment and adapt their strategy as necessary.
Described in this paper, are three companies challenged with understanding and forecasting the trends in their respective external environments. The first company, Solar Integrators (SI), is a new company operating in the solar electric industry. In their particular industry, SI is concerned about the influence of politics on government regulation from the remote environment. In addition, the company faces industry environment issues in barriers to entry and alternative sources of electricity production.
The specific trends indentified by SI start with the political influence and resultant new laws that influence their industry, see Figure 1 and 1a in Appendix A. The barriers to entry for SI include major corporation consolidations and the possibility of increased capital requirements. SI analyzed both the industry influences by ranking, Figure 2, the profits generated by other companies in the industry and determining the implications of potential for increased capital requirements.
The next company, Army Air Force Exchange Service or AAFES, reviewed the trends in ecological and economic forces. The company also assessed the threat of entry concerning government regulation in their industry.
AAFES used anecdotal information to describe the evolving trend in the “going green” movement, citing cases from firms in related industries such as Wal-Mart. Concerning economical forces, AAFES summarized current events that illustrate the economic trends in housing, disposable income and the influence on currency exchange rates.
In the analysis of government regulation, AAFES, again, used corporations in a related industry to benchmark various restrictions imposed on retail stores concerning value added services and product specific industry regulations.
Issues and Opportunities.
“Business strategy tells you where you are today, where you wish to be in the future and what you have to do to get there,” (Richard, M., 2004, p. 2). Organizations of all fields must turn issues from the remote and industry environment into opportunities for future sustained growth. Solar Integrators, the University of Cincinnati, and the Army Air Force Exchange Service (AAFES) have a myriad of opportunities to capitalize upon.
As a part of a government regulated industry, Solar Integrators faces political issues. Lobbyists influence politicians to turn their head on important issues such as alternative energy sources which translate to lost profits. SI can realize opportunities amongst these issues as the government moves to lifting restrictions on energy regulation and increasingly supports alternative energy sources by providing tax rebates for adopting this technology.
Barriers to entry at SI include increased capital requirements, a need for knowledgeable human capital, customer loyalty to larger organizations, and small profit margins. These barriers create several opportunities for SI to grow amongst competition including the increased demand for specialization within the solar energy industry, as well as growing the business amongst individuals and commercial customers. Additionally small profit margins will mean adopting innovative practices to increase