Competency: Formulate Strategies Based On External And Envir

Competencyformulate Strategies Based On An External And Environmental

All of the six organizations (Google, Walt Disney Company, Amazon, P&G, 3M, or Ford Motor Company) you chose from have invested in different methods of analysis to gain and retain industry standing. The threats and opportunities that exist for an organization are identified through studying and appraising the external environment. In order to be competitive, an organization must look closely at these aspects to properly formulate a successful strategic plan. Write a three- to four-page APA formatted paper with at least two outside sources (in addition to the text) incorporating the following aspects: Organizations as Open Systems: One key aspect is the “Environment as Information Perspectives.” Discuss what was determined to be the environmental uncertainty for your chosen organization. Another important aspect is the “Environment as Source of Resource Perspective.” Discuss the way in which management has been able to attain and regulate these critical resources for your organization. Provide a breakdown of these two perspectives to better see how they can be applied. If these perspectives are not readily available for your organization, you may infer them from information about the organization that is available. External and Environmental Analysis: Within the specific environment, multiple variables exist. Discuss which two of the five competitive forces were found to be most valuable and why. The general environment also needs to be examined. There are five sectors that should be analyzed. After evaluating each, discuss which two you believe will most impact the strategic management plan for your chosen organization and why. In addition to the aspects above, please share the advantages and disadvantages that exist when performing an external analysis. What did you find to be the most beneficial and detrimental factors during this analysis? Incorporate information from the readings, your research, and personal experience (using APA citations where appropriate).

Paper For Above instruction

Strategic management necessitates a thorough understanding of an organization’s external environment, which significantly influences its capacity to achieve competitive advantage. For this analysis, Amazon has been selected, given its dynamic positioning within the global retail and cloud computing sectors. This paper explores Amazon’s external environment through the lenses of open system perspectives, competitive forces, and sectoral impacts, while also examining the advantages and disadvantages of external analysis.

Organizations as Open Systems: Environmental Uncertainty and Resource Perspective

Amazon operates within a complex and rapidly evolving external environment characterized by technological advances, shifting consumer preferences, and regulatory changes. The environmental uncertainty faced by Amazon is primarily driven by technological disruptions and regulatory pressures. The fast pace of innovation in e-commerce and cloud services demands continual adaptation, creating unpredictability in market responses and competitive positioning (Johnson, Scholes, & Whittington, 2017). Additionally, regulatory uncertainties, such as data privacy laws and tax regulations, pose threats that require agile strategic responses.

From the “Environment as Source of Resource Perspective,” Amazon’s management has been adept at acquiring and regulating critical resources such as technological talent, data, and infrastructure. The company's investments in data centers, logistics networks, and artificial intelligence exemplify its strategic resource management. Amazon’s ability to attain these resources often involves building strategic alliances and investments that secure access and control over key assets, while regulation of these resources is achieved through rigorous operational standards and continued innovation (Barney & Hesterly, 2019). This dual approach—securing critical resources while regulating their use—has allowed Amazon to sustain its competitive edge in fast-changing markets.

Most Valuable Competitive Forces and Sectoral Impacts

Among Porter’s five competitive forces, the bargaining power of suppliers and the threat of new entrants stand out as most influential for Amazon. The bargaining power of suppliers is mitigated through Amazon’s scale and its ability to negotiate favorable terms, leveraging its order volume to secure low-cost inputs (Porter, 1980). Conversely, the threat of new entrants remains significant due to low barriers in e-commerce sectors, with startups and technological firms continually entering the market through innovative platforms. Amazon’s strategy involves maintaining economies of scale and technological leadership to deter potential entrants and sustain its market dominance.

Regarding the five sectors in the general environment, economic and technological sectors are particularly impactful for Amazon. Economic factors such as fluctuating currency values and global economic conditions directly influence consumer spending and supply chain costs. Technological sectors are even more critical, as rapid tech innovations enable new services and efficiencies that Amazon exploits to stay at the forefront. For example, advancements in artificial intelligence and logistics have transformed Amazon’s operations, providing a competitive advantage (Hitt, Ireland, & Hoskisson, 2017). The interplay of these sectors directly shapes Amazon’s strategic initiatives and market position.

Advantages and Disadvantages of External Analysis

The primary advantage of conducting external analysis is gaining insights into emerging opportunities and threats, which enables proactive strategic decisions. It also enhances an organization's ability to adapt swiftly to external changes, fostering resilience and competitiveness. In the case of Amazon, external analysis aids in identifying technological trends and regulatory shifts that influence expansion strategies (Hambrick, 2007).

However, disadvantages include the potential for information overload and the difficulty in accurately predicting future external conditions. External environments are inherently complex and unpredictable, and over-reliance on external analysis can lead to strategic paralysis or misinformed decisions. For Amazon, a significant challenge is continuously filtering relevant signals from the noise within an ever-changing landscape, which may lead to misjudgments or delayed responses (Kotler & Keller, 2016).

In summation, while external analysis offers notable benefits in informing strategic direction, it must be complemented with internal assessments and flexibility to effectively navigate the external uncertainties facing organizations like Amazon.

Conclusion

Effective strategic planning involves understanding Amazon’s external environment through multiple analytical lenses, including open systems perspectives, competitive forces, and sectoral impacts. Recognizing environmental uncertainties and managing critical resources are central to maintaining competitive advantage. Despite its challenges, external analysis remains an essential component for strategic decision-making in today’s volatile markets, enabling organizations to anticipate changes and respond effectively.

References

• Barney, J. B., & Hesterly, W. S. (2019). Strategic management and competitive advantage: Concepts and cases. Pearson.
• Hambrick, D. C. (2007). The field of strategy research and the search for attention. Strategic Management Journal, 28(4), 347-352.
• Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning.
• Johnson, G., Scholes, K., & Whittington, R. (2017). Exploring corporate strategy. Pearson.
• Kotler, P., & Keller, K. L. (2016). Marketing management. Pearson.
• Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. The Free Press.
• Strategic Management Journal. (2017). Special issue on technological innovation and strategic adaptation.
• Wade, J., & Hulland, D. (2004). Review: The resource-based view and information systems research: Review, extension, and suggestions for future research. MIS Quarterly, 28(1), 107-142.
• Yoon, J., & Hwang, P. (2018). Supply chain strategies and competitive advantage in the digital economy. International Journal of Operations & Production Management, 38(12), 2284–2305.
• Zimmerman, A., et al. (2019). External environment analysis and strategic decision making: The case of Amazon. Journal of Business Strategy, 40(2), 45-59.