1.The global recession forced thousands of firms into bankruptcy. Does this fact alone confirm that external factors are more important than internal factors in strategic planning? Discuss. Your response should be at least 200 words in length.2. Describe the process of performing an external audit in an organization doing strategic planning for the first time. Your response should be at least 200 words in length.3, Read “Exemplary Company Showcased: Netflix, Inc. (NFLX)” on page 90 of your
course textbook. As you read, pay close attention to Netflix’s strategy,
and write a case study describing the points listed below.
What are Netflix’s internal strengths and weaknesses?
Who are Netflix’s competitors?
Do you see Netflix’s strategy as effective or ineffective? Why?
Your case study must be at least one page in length, not counting a
title page and reference page. Outside sources are not a requirement for this
case study, but if you choose to use them, they must be cited and referenced
according to APA standards.
exemplary_company_showcased.docx

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Exemplary Company Showcased
Netflix, Inc. (NFLX)
Based in Los Gatos, California, Netflix does an outstanding job analyzing customer buying
trends and desires and incorporating that information into its strategic-planning process. Netflix
gathers extensive information about its customers’ usage and content choices, utilizing
voluminous individual data into strategic information. An analyst for Janney Capital Markets
recently said, “Netflix understands its viewers by tracking every single thing they do; and
develops patterns among its subscribers, and matches them up properly with content offerings.”
Doing such an excellent job with customer analysis has enabled Netflix to reportedly obtain onethird of all Internet prime-time traffic in the United States. Lately, the company’s streaming
video services are focusing more on popular TV shows and less on hit movies. Netflix now has
32 percent of the top 75 TV shows from the past 4 years, compared to Amazon’s 12 percent, but
Amazon is actively promoting its Prime Instant Video service that competes with Netflix. In
early 2015, Netflix’s stock surged 42 percent in a single day to a 52-week high over $500.
Analysts expect Netflix’s addressable subscriber base to reach 207 million globally by 2017, as
the company grows rapidly across Europe and beyond. Netflix recently entered six European
countries: Germany, France, Austria, Switzerland, Belgium, and Luxembourg—after already
providing services in the U.K., Ireland, Netherlands, and Scandinavia. Netflix entered Australia
and New Zealand in March 2015, followed by Italy, Portugal, Spain, and Japan in October 2015.
Netflix’s stock is expected to split in late 2015 for only the second time in the company’s 13year history. With Netflix stock currently being almost $700 per share, a lowered split stock
price is expected to widen the pool of people interested in buying the stock, which has been
soaring throughout both 2014 and 2015. As of April 1, 2015, Netflix had 20.9 million
international subscribers and 41.4 million streaming subscribers in the United States.
UNIT III STUDY GUIDE
External and Internal Assessment
Course Learning Outcomes for Unit III
Upon completion of this unit, students should be able to:
3. Analyze external and internal audit processes.
9. Assess the strategy evaluation process.
Reading Assignment
Chapter 3: The External Assessment
Chapter 4: The Internal Assessment
Unit Lesson
External Assessments
During this unit, we will explore the factors that impact an internal and external assessment. Let us begin with
the external assessment. To effectively develop a successful strategic plan, the organization must be aware
and adapt to the external environments. These environments include identifying and incorporating trends
affecting their stakeholders. These trends can shift and be affected by the economy, competition, tax burdens,
and many other factors.
Take a look at the Chipotle Mexican Grill Case Study on the bottom of page 60 of your course textbook.
Chipotle is a chain of about 1,700 restaurants in the United States and in several other countries. Chipotle
Mexican Grill is considered as a fast, casual dining establishment whose vision statement is Food With
Integrity. It extends many benefits to its salaried, part-time, and entry-level workers. It tries to meet society’s
expectations for the humane treatment of animals. Unlike its competitors, it is experiencing revenue growth of
about 20% a year. The restaurant sector grows about 1% annually. Consider the sustainability of the Chipotle
business strategy that invests in its workers, promotes its managers from within, and insists on humane
operations. Do you think it will be able to maintain its revenue growth in 5, 10, and 20 years in a changing
economy and with potential new competitors? What strategies would you recommend for them?
Let us also consider external assessments outside of the United States. What happens when a company has
reached its fullest potential within the United States? Should they remain steady, or should they seek global
opportunities? Many organizations to include retailers, fast food, and other entities have expanded
internationally to grow their companies. Examples include Starbucks, McDonalds, and Walmart, which can be
found in many different countries. In addition, you may notice outside companies expanding within the United
States. A prime example is Ikea, who continuously grows their North American operations. Organizations also
consider the economic outlook before proceeding with development in a country. For example, China has had
a decade long economic boom, and many corporations have taken this opportunity to expand into new
territories, thus increasing our overall reliance on a global-based community. Take a look at the chart located
on page 64 of your textbook—Table 3-2 Ten Advantages of a Strong Dollar for Domestic Firms. Which do you
think is more beneficial for a domestic organization? A strong or weak dollar?
Other external factors often affecting a corporation include political, governmental, and legal challenges both
domestically and abroad. One issue with a clear divide is minimum wage and a living wage. The minimum
wage is determined by the government, while a living wage can be influenced by the corporation and other
competing factors. Another governmental external factor is the Healthcare Reform Act, which requires
corporations to provide health insurance for their employees. This cost can be expensive to the company and
BBA 4951, Business Policy and Strategy
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is generally passed on to consumers and also may decrease the overall salaryUNIT
of the
employee.
Another
x STUDY
GUIDE
challenge is deciphering whether to tax or not to tax Internet commerce. ManyTitle
states feel they are losing out
on needed revenue due to the tax free association with Internet sales. Some states have lobbied and passed
bills to formally tax all Internet sales transactions. Amazon.com has been an opponent of taxation but must
abide by the state requirements.
As we have learned, the external assessment can be a very powerful tool if approached with the correct
perspective. If the external assessment is used in a punitive way to restructure leadership or redesign the
business structure, we have missed the boat on the real power of the external assessment. As leaders, we
need to have a general understanding of the industry and be able to identify areas in which competitors are
vulnerable and be able to predict potential moves that competitors might make that could be a threat to us.
Successful businesses are constantly looking in the rear view mirror while, at the same time, looking well into
the economic future (David & David, 2017). The key is to constantly be aware of the needs of the customer.
“When customers are concentrated or large in number or in volume, their bargaining power represents a
majority force affecting the intensity of completion in an industry” (David & David, 2017, p. 74), thus the
external assessments utilized by the business need to be sensitive to the consumer.
Internal Assessments
There is not a one size fits all related to an internal assessment of an organization. There are multiple types of
organizations to include colleges, hospitals, retailers, and government. These entities all function differently
and often need a customized assessment to truly assess their performance. An internal audit is the
organization’s self-evaluation of their strength and weaknesses. The audit can better illustrate how an
organization’s departments are incorporated and how modifications and updates can be implemented. It is
also just as important to ensure the organization properly communicates their intent and expectations of an
audit to their employees.
Every organization has an organizational culture. Let us use an example of the U.S. Armed Forces; the Army
and Air Force have a very distinctive culture, even though they are both on the same side and work toward
the same goals. An organizational culture is defined by a pattern of behavior that an organization has
developed to handle a problem or external threat. New members coming into the organization will often be
integrated into the organization’s culture, thus continuing the pattern of behavior. These examples include
ceremonial, values, beliefs, and rituals.
Management and Marketing
There are five main characteristics related to the activities of management. These include planning,
organizing, motivating, staffing, and controlling.
Function
Description
Stage of
Strategic
Management
Strategy
formulation
Planning
Preparing for the
future.
Organizing
Job description,
control and
coordination.
Strategy
implementation
Motivating
Shaping human
behaviors
Strategy
implementation
BBA 4951, Business Policy and Strategy
Example
Planning for
the next
release of a
product or
service.
Coordinating
the efforts to
release the
product to
include where
and how.
Encouraging
the company’s
sales
associates to
become
excited and
2
Staffing
Human resource
management
Strategy
implementation
Controlling
Results oriented,
rewards, sanctions
Strategy
evaluation
motivated by UNIT x STUDY GUIDE
the release of Title
the new
product. This
excitement will
trickle down to
the consumer
and other
stakeholders.
Identifying the
right
personnel for
the
organization to
include
implementers,
managers,
and leaders.
Identifying
goals and
rewards for
top sales
person(s) for
the new
product
release.
Marketing
Marketing includes the process of creating and fulfilling a customer’s needs and wants for a particular service
or product. Let us use an example of the energy drink “Red Bull.” Who are the commercials targeting for this
beverage? The target audience can be a demographic of adventurous young adults who are seeking new
challenges. The commercials promote that Red Bull “gives you wings,” thus you will feel a huge rush of
energy and will have the ability to keep going well into the night. Red Bull must also consider pricing and
distribution in an effort to remain relevant and profitable. For example, do you feel Red Bull would be a drink
of choice at an affluent sushi bar, or would this drink be more appropriate at a sporting venue or a late night
concert?
Reference
David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach, concepts and
cases (16th ed.) [VitalSource Bookshelf version]. Retrieved from
https://online.vitalsource.com/#/books/9780134167947
Suggested Reading
The chapter presentations below will provide you with additional information on this unit’s concepts.
Click here to access the PowerPoint version of the Chapter 3 Presentation.
Click here to access the PDF version of the Chapter 3 Presentation.
Click here to access the PowerPoint version of the Chapter 4 Presentation.
Click here to access the PDF version of the Chapter 4 Presentation.
BBA 4951, Business Policy and Strategy
3

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