Project 3: Internal Environmental Analysis
This project is the third of four projects. Students will perform an internal environmental analysis using the tools and concepts learned in the course to date. You will also draw from previous business courses to understand how organizations develop and manage strategies to establish, safeguard, and sustain their position in a competitive market.
Students also can 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. It plays a critical role in formulating strategy by identifying a firm’s strengths to capitalize on to effectively overcome weaknesses.
Outcomes Met With This Project
- Utilize a set of useful analytical skills, tools, and techniques for analyzing a company strategically;
- Integrate ideas, concepts, and theories from previously taken functional courses including, accounting, finance, market, business, and human resource management;
- Analyze and synthesize strengths, weaknesses, opportunities, and threats (SWOT) to generate, prioritize, and implement alternative strategies to revise a current plan or write a new plan and present a strategic plan.
Step 1 Specific Company for All Four Projects
(the selected company is Exxon Mobile Corporation)
The company that your instructor has assigned to you for Project 1 is the company you will use for this project. The assigned company must be used for this project and in subsequent projects in the course. Students must complete the project using the assigned company. Deviating from the assigned company will result in a zero for the project.
After reading the course material, you will complete the steps below.
Step 2 Course Materials and Research
- You must research information about the focal company and the internal environment for this project. You are accountable for using the course materials to support the ideas, reasoning, and conclusions made. Course material’s use goes beyond defining terms and explains the ‘why and how’ of a situation. Using one or two in-text citations from the course materials and then relying on Internet source material will not earn many points on the assignment. A variety of source material is expected, and what is presented must be relevant and applicable to the topic being discussed. Avoid merely making statements but close the loop of the discussion by explaining how something happens or why something happens, which focuses on importance and impact. In closing the loop, you will demonstrate the ability to think clearly and rationally, showing an understanding of the logical connections between the ideas presented from the research, the course material, and the question(s) being asked.
Note: Your report is based on the research results and not on any prepared documentation. What this means is that you will research and draw your own conclusions that are supported by the research and the course material rather than the use of any source material that puts together any of the tools or techniques whether from the Internet, for-pay websites, or any pre-prepared document, video or source material. A zero will be earned for not doing your own analysis.
Success: The analysis is based on research and not opinion. You are not making recommendations, and you will not attempt to position the focal company in a better or worse light than other companies within the industry merely because you are completing an analysis on this particular company. The analysis must be based on factual information. Any conclusions drawn have to be based on factual information rather than leaps of faith. As stated above, you are expected to use the course materials and research on the focal company’s global industry and the focal company to ensure success. The opinion does not earn credit, nor does the use of external sources when course materials can be used. It is necessary to provide explanations (the why and how) rather than making statements. Avoid stringing one citation after another, as doing so does not show detailed explanations.
Library Resources (Company Required)
- Statista – All the information needed for your assigned company must be obtained from one of the library’s suggested online company research databases. To use these resources, go to the main navigation bar in the classroom, select Academic Support and then select Library. Next, select Databases by Title (A – Z). Since your primary online company research database is Statista, select S from the alphabet list, and scroll down to select Statista Online. See Dr. Kathy’s Notes for Week 2 for more guidance on using Statista.
- Dun and Bradstreet’s Hoovers Database, among others, is another excellent source for company research, competitor, and industry information.
- You can find relevant and significant additional information required for company project research by using https://libguides.umgc.edu/business-research
Additional Library Resources
- Research for Company Financial Ratios: Financial Research.
- Research for Industry Financial Ratios: CSI Market.
- Use “OneSearch” to find scholarly articles by clicking Library under Academic Support on the classroom main menu bar and checkmark “Scholarly Journals Only” prior to starting a search.
Library Support Personal Assistance
- Extensive library resources and services are available online, 24 hours a day, seven days a week at https://www.umgc.edu/library/index.cfm to support you in your studies. In addition, the UMGC Library provides research assistance in creating search strategies, selecting relevant databases, and evaluating and citing resources in various formats via its “Ask a Librarian” service at https://www.umgc.edu/library/libask/index.cfm.
Step 3 How to Set Up the Report
The document has to be written in Word or RTF. No other format is acceptable. No pdf files will be graded. Use 12-point font for a double-spaced report. The final product is expected to be 10 – 12 pages. The final project may not be more than 12 pages in length, including all tables and matrices, but excluding the title page and reference page. Do no use an Appendix.
- Those items identified in the technical analysis should appear under the appropriate heading in the paper. It is important to format the tables/matrices to fit the report and present the analysis clearly and concisely.
- Create a title page with the title, your name, date, the course number, the instructor’s name.
- Create Topic Headings that correspond to exact sections of the project requirements. Use the exact same Headings and Heading Numbers that are in red font below.
Step 4 Write the Report – use the Headings and Heading Numbers that appear here in Red Font
I. Corporate Level Strategy Analysis
There are three levels of strategy: corporate-level strategy, business-level strategy, and functional-level strategy. Corporate-level strategies are related to businesses or markets the focal company successfully can compete within. Corporate-level strategies affect the entire organization and are formulated by top management using middle and lower management input. Decision-making about corporate-level strategies is considered complex, affects the entire company, and relates to an organization’s resource capabilities. Corporate level strategies align with an organization’s mission statement and ideally are designed around goals and objectives.
Perform an analysis on the Corporate-level strategies of the focal company. Use both course materials and company research for support.
II. Partial SWOT (SW) Table
Create a Partial SWOT Table highlighting at least five strengths and at least five weaknesses for the focal company. Provide a citation from company research for support for each of the strengths and weaknesses. Include these citations within the table.
III. SW Analysis
Perform an SW analysis, and discuss the strategic inferences/implications of the strengths and weaknesses on the focal company. Discuss what strategies would allow the company to capitalize on its major strengths and what strategies would allow the company to improve upon its major weaknesses. Use both course materials and company research for support.
IV. IFE Matrix
Create an IFE matrix and present an analysis of the scores. Make sure to explain how the matrix was developed, provide a justification for the weights and ratings used, and discuss the strategic inferences and implications. Use both course materials and company research for support.
V. Grand Strategy Matrix
Develop a Grand Strategy Matrix in order to identify the correct quadrant for your focal company. Explain how the matrix was developed and discuss the strategic inferences/implications for the focal company. Use both course materials and company research for support. (Note, you don’t have to draw a Grand Strategy Matrix, but at a minimum you must indicate which quadrant the focal company falls in and why. See Dr. Kathy’s Notes for Week Five for further guidance on the Grand Strategy Matrix. Note: “Market Growth” means “Industry Growth”. Use 2021 and 2020 Industry Growth from CSI Market for this calculation. See link to CSI Market above under Library Resources or go to csimarket.com.)
VI. The Business Level and Business-level Strategies
VI. A.The Business Level
Evaluate the company’s product line, target market. Use company research and course materials for support.
VI. B. Business-level Strategies
Identify and explain business-level strategies of the focal company. Use course materials and company research for support.
VII. Functional Level Strategies and Alignment
VII. A. Functional-level Strategies
Assess the company’s organizational structure and the organizational culture. Also, BRIEFLY describe any marketing, production, operations, finance and accounting, and R&D that can be accomplished by viewing the company’s website or interviews. Use course materials and company research for support.
VII. B. Alignment of Functional-level Strategies
Explain how these strategies align with the company’s vision and mission statements. Use course materials and company research for support.
VIII. Strategic Financial Analysis for the Last Reported Fiscal Year
VIII. A. Financial Ratios for Company
Use the company’s income statement and balance sheet to calculate four (4) key financial ratios, OR, obtain the 4 ratios from Statista or CSI Market or other credible library sources (see Library Resources section above). One key ratio must come from each of the four key categories: leverage, liquidity, profitability, and efficiency. The four (4) specific ratios selection must come from the following categories.
- Leverage Ratios (Long term debt ratio, Total debt ratio, Debt-to-equity ratio, Times interest earned ratio, and Cash coverage ratio)
- Liquidity Ratios (Net working capital to total assets ratio, current ratio, quick ratio, and cash ratio)
- Efficiency Ratios (Asset turnover ratio, average collection period, inventory turnover ratio, and Days sales outstanding)
- Profitability Ratios (Net Profit Margin, Return on Assets, and Return on Equity)
The selection of the ratios has to be relevant to the focal company, so it is important to choose wisely. Citations should be provided to demonstrate the origin of these ratios from company research.
VIII. B. Financial Ratios for Industry
Quote industry financial average ratios correlate to the four (4) financial ratios selected for the focal company. You may find the industry averages through Statista or CSI Market (see Library Resouces and Support sections above). Provide a citation from industry research for each ratio.
VIII. C. Financial Analysis
Explain the importance of the four (4) averages you chose to use (in other words, why are these ratios relevant for this company and its industry?). Then compare the company and industry ratios and comment on whether each ratio is Strength or a Weakness for the company, in comparison to the industry average. Support this analysis with both course materials and company/industry research.
IX. Composite Analysis/Conclusion
The one-paragraph conclusion is intended to highlight the key 3-4 key findings, consequences, and recommendations resulting from your analysis. Comment on both the qualitative findings (from the matrices) and the quantitative findings (from the financial analysis). Support this composite analysis with both course materials and company research.
Course materials to use:
- (Raynor, 2007) What is Corporate Strategy, Really?
- (Aronowitz et al., 2015) Getting Organizational Redesign Right
- (Bersin, 2013) It’s Not The CEO. It’s The Leadership Strategy That Matters
- Does Your Strategy Need a Strategy Part 1
- Does Your Strategy Need a Strategy Part 2
- Strategy and Corporate Culture
- Levels of Culture