WEEK 2 (Discussion)—External & Internal Strategic Environments

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THE EXTERNAL AND INTERNAL
STRATEGIC ENVIRONMENTS

Chapter 1 provides an overview of strategy. The core of effective strategy is at the business level of analysis. Nevertheless, strategy is also relevant to organizational success at higher (e.g., corporate) and lower (e.g., function) levels. Regardless of the level of analysis, strategy always consists of that subset of business logic that must be the same across all entities of a given organization to ensure success. For this reason, there is no strategic mind unless there is first a logical mind. In turn, in business, there is no logical mind unless there is first an economic mind, because business is fundamentally an economic enterprise. It obeys the laws of economics.

Chapter 2 then examines the external environment (i.e., the domain of opportunities and threats). When discussing SWOT analysis or any other aspect of the external environment, remember always to “speak strategy.” In Strategyspeak (if I may mimic George Orwell’s formulation), opportunity means “favorable condition.” It may be a trend, a causal dynamic, or a likelihood. The most common error in analyzing the external environment is to mistake an opportunity for a “suggestion”: It must never include “should,” “could,” or “would.” Analogously, threat means “unfavorable condition.” If we do nothing, a threat will harm us.

Chapter 3 examines the internal environment (i.e., the domain of strengths and weaknesses). Here, the most common error in strategic analysis is to claim a strength or weakness based on factors outside our control. A trait that amounts to how the environment happens to be treating us may be an opportunity or a threat, but never a strength or a weakness. Another common error is to see an anomalous factor (freak accident) as a strength or a weakness. Is having Elon Musk as your CEO a strength? Advantage yes; strength no. Only key success factors (attributes that all businesses in your industry need to perform well), can be strengths or weaknesses.

For this week’s commentary, please select just one of the following questions to answer. To respond, first cite the question by its number. Then immediately start answering, without restating the question in any way. (We already know what the question says.)

1. [Chapter 1 Mini-Case, Item 2.] Why is there a lot of imitation in the airlines industry, and how does this affect firm performance?
2. [Chapter 2 Mini-Case, Item 3.] What opportunities does the informal economy present to firms operating in the formal economy?
3. [Chapter 2 Mini-Case, Item 4.] What threats does the informal economy present to firms operating in the formal economy?
4. [Chapter 3 Mini-Case, Item 1.] What influences from the external environment over the next several years do you think might affect the way Zara competes?
5. [Chapter 3 Mini-Case, Item 2.] How easy or difficult do you think it would be for competitors to imitate Zara’s supply chain as a capability?

General Instructions

In all discussion tasks, endeavor to respond to the question astutely, logically, and piercingly, while adhering to the correct conventions of formal US English. Cite the textbook (no more than three times) and two outside sources. The optimal sources will be peer-reviewed articles in scholarly journals. If you can grow comfortable reading theoretical material, you can be a superb asset for your organization, a rarity, able to apply the most advanced ideas from the theoretical literature to your organization’s strategic discussions. Nevertheless, you must scrutinize each source carefully to make this determination on your own rather than relying on a library database to tell you.

When citing sources, strictly use APA style, 7th edition. This style guidance also applies to your treatment of other aspects of grammar and construction, although those features are subtler than in-text citation and reference formatting, which account for most points lost in the formal commentaries. Ultimately, you will manage your business with the same mentality as your writing. If you feel that the task of reading your commentary anew in search of opportunities to correct, formalize, and clarify (i.e., proofreading) is too tedious, you will later treat your business with the same nonchalance. Now is the time to exercise that critical business mind.

Once you feel satisfied that you have answered the question, continue to elaborate, such as by adding causal logic (“this effect occurs because of that cause”), hypothetical cases (“what if?”), and anecdotes of personal experience (“in my previous company…”) until you have exceeded the minimum specification of 250 words by a comfortable margin.

Note: The length assessment will exclude section headers, quoted passages, parenthetical expressions, bulleted or numbered lists in fragmentary form (i.e., incomplete sentences), tables, images, and extraneous verbiage. Extraneous verbiage includes any dispensable wording, such as sentences that merely tell the reader what question you are about to answer.

In addition to posting your formal commentary in the manner just described, be sure also to reply to at least two other students. Unlike the main commentary, formality is optional here, and no in-text citations or reference section is necessary. Each reply requires at least two complete, meaningful sentences, which directly address at least one aspect of the other student’s commentary and add genuine value by advancing new observations, facts, or ideas rather than merely agreeing with the commentator. In replying, it is always good policy to start by lauding the commentator’s astuteness and then offer your value-adding observation.

Your main commentary is due Sunday night. Your replies to the other students are due the following Tuesday night (i.e., two additional days, to allow time for people to post their main commentaries). This deadline pattern will remain the same throughout the course.