External and Internal Environment Analysis
Big 5 Sporting Goods External and Internal Environmental Analysis Big 5 Sporting Goods (Big 5) has operated within the sporting goods industry, predominantly in the western United States, for over 50 years (Hoovers, 2013). To understand the organizational structure and strategic path chosen by Big 5, it is critical to analyze various factors found within its external and internal environments. Big 5’s external environment includes remote, industry, and operating factors whereas the internal environment includes human capital resources and organizational structure factors. Ultimately these external and internal environmental factors provide opportunities and threats that help to develop and alter generic and grand strategies to meet Big 5 organizational long-term objectives and goals.
Remote Environment The remote environment include various factors that help shape, if not dictate, Big 5’s strategic approach to maximizing available opportunities and minimizing threats. It is critical to note that the macro nature of these environmental factors, including the economy, social trends, ecology, technology, and political prohibit Big 5 from applying self-serving pressure back to the remote environment. “That environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence,” (Pearce, Robinson, 2011, p. 81). The state of the economy greatly affects the regional Big 5 Sporting Goods business model because the company relies on consumer spending, which is a direct reflection of the employment rate, income, taxes, and economic confidence level. For example, a tax increase could negatively affect consumer spending. “An increase in taxes that began to shrink paychecks this month will pose a hurdle to sustaining gains in purchases,” (Chandra, 2013, p. 1). Although a percentage of Big 5 customers consider fitness and health a fundamental lifestyle budgetary requirement, others may view
Remote Environment The remote environment include various factors that help shape, if not dictate, Big 5’s strategic approach to maximizing available opportunities and minimizing threats. It is critical to note that the macro nature of these environmental factors, including the economy, social trends, ecology, technology, and political prohibit Big 5 from applying self-serving pressure back to the remote environment. “That environment presents firms with opportunities, threats, and constraints, but rarely does a single firm exert any meaningful reciprocal influence,” (Pearce, Robinson, 2011, p. 81). The state of the economy greatly affects the regional Big 5 Sporting Goods business model because the company relies on consumer spending, which is a direct reflection of the employment rate, income, taxes, and economic confidence level. For example, a tax increase could negatively affect consumer spending. “An increase in taxes that began to shrink paychecks this month will pose a hurdle to sustaining gains in purchases,” (Chandra, 2013, p. 1). Although a percentage of Big 5 customers consider fitness and health a fundamental lifestyle budgetary requirement, others may view
References: Chandra, S. (2013). Consumer Spending in U.S. Rose in December as Incomes Surged. Bloomberg. Retrieved February 13, 2013 http://www.bloomberg.com/news/2013-01-31/consumer-spending-in-u-s-climbed-in-december-as-incomes-surged.html Hellmich, N., (2012). Americans fighting fat, but odds stacked against them. USA Today. Retrieved February 14, 2013 http://www.usatoday.com/story/news/nation/2012/11/05/americans-obesity-rate/1684507/ Hoover’s Inc., a D&B Company (2012). Big 5 Sporting Goods. Retrieved February 13, 2013 http://www.hoovers.com Pearce, J.A., II, Robinson, R.B. (2011). Strategic management: Formulation, implementation, and control (12th ed.). Boston, MA: Mc-Graw-Hill/Irwin. SWOT ANALYSIS. (2011). Big 5 Sporting Goods Corporation SWOT Analysis, 1-10, Retrieved February 17, 2013, Ebscohost.com.