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REQUIRED TEXTBOOK: Strategic Management 16 ed Fred R. & Forest David
Complete exercise 2B and 2C in chapter 2
Complete exercise 3B. Write a 3 page summary for chapter 3.
Complete Exercise 4C - perform a financial ratio analysis for Hershey's chapter 4
Complete exercise 5C: What strategies should Hershey's pursue ? Chapter 5
Determine 3 new strategies that Hershey's is actually pursuing and identify 3 proposed strategies that you feel would be excellent for Hershey to pursue. Give a rational for each of your proposed strategies.
Complete Exercise 6A - Perform a SWOT Analysis for Hershey's Company.
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THE EXTERNAL ASSESSMENT
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Chapter 3 Summary: The External Assessment
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THE EXTERNAL ASSESSMENT
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In chapter 3, David & David (2017) focus on external assessment. The goal of an external
audit involves establishing a finite record of the opportunities that a business could exploit and
threats that the company can avoid (David & David, 2017).
There are five classes of external forces including economic forces, social, cultural,
demographic and natural environment forces, political, governmental, and legal forces,
technological forces and competitive forces (David & David, 2017). Shifts in these external
forces can result in shifts in consumer demands. Also, these external forces impact the types of
goods created, nature of positioning and strategies for market segmentation, forms of services
provided and the type of business to purchase or sell. Similarly, external forces can impact both
suppliers and distributors (David & David, 2017). Therefore, it is important to recognize and
assess external opportunities and threats brought about by these external forces to allow a firm to
establish a clear vision and structure its strategies to realize long-term goals as well as create
policies to realize yearly goals.
To perform an effective external audit, a firm must involve several managers and
employees in the process. Also, the firm must further collective competitive intelligence and data
regarding trends and patterns in economic, social, cultural, demographic, environmental,
political, governmental, legal, and technological environments (David & David, 2017). To gather
such information, a firm can rely on various sources such as newspapers, trade journals, and the
internet, which serves as a key source for obtaining strategic data (David & David, 2017).
Economic factors
These are factors directly related to the economy. These factors have a direct effect on the
possible viability of several strategies. Some of the examples of economic factors that a firm
must take into account during an external audit include interest rates, inflation rates, taxation
rates, unemployment trends, import/export factors and among others (David & David, 2017). For
instance, when the stock prices fall, the attractiveness of equity as a source of capital for market
growth, falls.
Social, cultural, demographic, and environmental factors
These factors have serious implications on nearly all goods, services, consumers and
markets. Firms, big or small, are often affected by opportunities and threats that emerge from
shifts in social, cultural, demographic, and environmental variables (David & David, 2017). For
example, a country with an aging population may have low productivity because of the lack of
enough labor in the market.
Political, governmental and legal forces
These forces serve as major opportunities or threats for firms. In an external audit, a
political forecast is a major element because of the role of government in the markets. Examples
of political, governmental and legal forces include patent laws, changes in tax laws,
environmental protection laws, and changes in fiscal and monetary policies and among others
(David & David, 2017). For example, a company that deals in the auto industry may find its
strategy significantly affected by changes in environmental protection laws. For instance, if a
government toughens its emissions regulations, such a firm may be forced to exit the market or
focus on their product development to meet the new emission regulations.
Technological forces
Extraordinary advancements in technology have massively affected firms. For example,
the emergence and development of the internet has altered the nature of opportunities and threats
since it has resulted in changes in the lif...
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