External Environment Analysis
An environmental analysis can be an extensive undertaking, requiring far more time and resources than we have for this course. Therefore, be sure that you do not give an inordinate amount of attention to any one factor to the exclusion of other important ones.
Keys to the Assignment
- Step One: Using the sources you identified in the SLP, collect some data to support an industry analysis of each of the Five Forces in Porter’s model.
- Step Two: Using the sources you identified in the SLP, collect some data to support an analysis of each of the four elements in the PEST analysis. When considering economic data, use the most current data you can find.
- Step Three:In a 5- to 6-page paper, write the results of your external analysis, and be sure to label each of the Five Forces ashigh,moderate, orlow. Taken together, the Five Forces analysis and the PEST analysis should lead to conclusions about the opportunities and threats facing the Kraft Foods Group as revealed by your research. The data you report from the Five Forces and PEST analysis must be properly cited using APA style.
- Step Four:Consider the Case as a formal business report that you are developing for the Board of Directors and CEO as theKraft Foods Group’sconsultant. This is a professional document. Follow the format below:
- Executive summary: This is a synopsis of the main points, conclusions, and recommendations made in the longer report. If you would like a refresher on writing an executive summary, check this website:http://www.highendfinance.com/CommercialLoans/Docs/07-4%20ES%20Guidelines.doc
- Introduction:State the main purpose of the paper (thesis statement), what you hope to accomplish, and how you will go about doing it.
- Main Body: The “meat” of the paper. Emphasize analysis, not just description. Use section headings in this paper—and all papers. For example:
- Executive Summary
- Porter’s Five Forces
- Threat of Entry
- Bargaining Power of Suppliers
- Bargaining Power of Customers
- Political Environment
- Economic Environment
- Sociocultural Environment
- Technological Environment
- Overall Impressions Concerning the Company’s Environment (Opportunities and Threats)
Module 2 -SLP
The key aspects of this assignment that should be covered in your paper are:
- Step One: Research Web and library sources that would give you the kinds of data you would need to conduct a Porter Five Forces analysis. Use the Kraft Foods Group (and thus, the foods industry) as the basis for this SLP. Note: We arenot looking for sites that describe the Five Forces, but sites that will provide you with datathat you will be able to use to conduct your own external environmental analysis (e.g., to analyze the degree of competition in an industry, or the ease of substitution). You have undoubtedly run into such websites and publications before in your core courses. Typically, they are government sources providing statistical data, industry or trade magazines or journals, general business publications, finance websites, websites for trade associations, etc.
- Step Two: This is a two-step process:
- Determine what kinds of information you would need to evaluate each of Porter’s forces (see the background materials), and then find a source that will give you that information. Find a minimum of one or two sources for each of Porter’s forces.
- Research Web and library sources that would give you data to support a PEST analysis. Find at least one or two sources for each PEST variable.
- Step Three: For each source you have given above, provide a title and a URL (if applicable), and write a sentence or two explaining what information is provided by the source and how the source would be useful in conducting an external analysis, and critiquing the source (e.g., what are the strengths and limitations of the source)?
- Note: There are no length requirements for the SLP, however, you must address the above requirements precisely (two sources for each Porter and PEST factor), and you must critique the validity of each source with adequate depth.