Tools And Techniques Used In Environmental Analysis Tourism Essay

Tools And Techniques Used In Environmental Analysis Tourism Essay Environmental analysis is a very important part of decision making. Managers need to take this aspect of taking decisions very seriously. It has been proved time and time again that decisions that are made from gut feelings or instincts may not work how the manager envisioned it to work out. It is always better for analysis to be done and different scenarios to be worked out to see how a decision can work out. This reduces the risk associated with taking decisions. This process of analyzing the environment is a dynamic process not a static process. The environment in which an organization works in is divided into internal and external environment its respective factors. The following article talks about the tools and techniques which are used in analyzing the factors of the business environment. Introduction: Strategic management is also called institutional management. It is the art and science of the creation of strategies and plans, the implementation and evaluation of these strategies and plans which helps an organization to achieve its long-term objectives. In this process the organizations mission, vision and objectives are discussed and developed. After these objectives are developed, the policies, plans, with respect to projects and programs, are designed, and then resources are allocated or budgeted to implement them and achieve the objectives. (wikipedia n.d.) Strategic management consists of a set of activities that come under setting goals and over the process of putting together tactics to achieve these goals and objectives. How strategic management is carried out depends on the organizational structure of the company. The Board of Directors, the management team as well as other stake holders of the company can be involved in these activities that fall under strategic management. Strategy can be defined as unified, comprehensive and integrated plan that maps the strategic advantages of the organization to the challenges of the environment. It is designed to ensure that the core objectives of the enterprise are achieved through the proper execution by the organization. (Jauch and Glueck 1988) Formulating a strategy for achieving an objective or a set of objectives is a combines three main processes which are: à ¢Ã¢â€š ¬Ã‚ ¢ By analyzing the situation, evaluating themselves and comparing themselves with their competitors i.e. internal and external as well as micro-environmental and macro-environmental. à ¢Ã¢â€š ¬Ã‚ ¢ After this assessment, the objectives are determined. These objectives should be created with respect to a time-line; where some are short-term and others are long-term objectives. This involves creating a vision statement, a mission statement, setting corporate level, strategic business unit level and tactical level objectives. à ¢Ã¢â€š ¬Ã‚ ¢ These objectives should be studied along with the results of the situation analysis and a strategic plan can be formulated which will provide details of how to achieve these objectives. Environmental analysis begins from the identification of environmental factors (internal and external), assessing their nature and the impact of these factors and making various profiles for positioning of the firm. All the decisions taken by the organization and the impact of these decisions depend on the organizations internal and external environmental factors. These environmental factors should be carefully analyzed before taking any decisions. Environmental analysis is made up of the processes which scan, monitor, analyze, and forecasts the situations which the organization can face and variables of the environment. Scanning is done to get information from the environment. Monitoring is done to test the impact of the environmental factors. Analyzing deals with data collection and the use of tools and techniques to study and measure the environmental factors. Forecasting is a method to find the possibilities of the future based on the historical data and present scenario. (Busine ss Environment Analysis n.d.) Different tools, methods, and techniques are used for environmental analysis. Some of the major methods of analysis are benchmarking, scenario building and network methods. Scenario building gives an overall picture of the total system with the factors which affect it. Benchmarking is the process of finding the best standards in an industry and comparing the strengths and weaknesses of the firm with these identified standards. The network method is used to assess organizational systems and its external environment to find the strengths, weaknesses, opportunities and threats faced by an organization. (Agarwal n.d.) Few of the techniques of primary information collection are brainstorming, the Delphi technique, conducting surveys, and historical enquiry. The Delphi technique collects independent information from the experts without mixing them. Brainstorming is done with a group of people usually cross-functional which discuss the problem in hand and try to come up with solutions irres pective of whether the solution is feasible or not. Conducting a survey first involves the design of questions and then asking these questions to people who become the participants. The historical enquiry technique is a case analysis of previous time periods. Analysis tools can be descriptive tools such as mean, median, mode, frequency or tools can be statistical such as ANOVA, correlation, regression, factor, cluster, and multiple regression analysis. (BADU 2002) SWOT analysis: Figure 2.1 A study of the internal and the external environment is a critical component of the strategic planning process. The firms internal environmental factors can be classified as strengths (S) or weaknesses (W), and those factors which act as external agents to the firm can be classified as opportunities (O) or threats (T). This is called SWOT analysis. (QuickMBA n.d.). This analysis gives information that is useful in matching the organizations resources and abilities to the environment in which it operates. 2.1 The SWOT Matrix: A matrix of these factors can be constructed. This matrix will be helpful in developing the strategies for the firm. The SWOT matrix (also known as a TOWS Matrix) is shown in the next page: SWOT / TOWS Matrix Strengths Weaknesses Opportunities S-O strategies W-O strategies Threats S-T strategies W-T strategies Table 2.1 S -O strategies helps to pursue identified opportunities fit well according to strengths of the firm. W-O strategies helps to overcome weaknesses to pursue opportunities identified. S-T strategies identifies ways in which the firm can use its strengths to reduce its vulnerability to external threats. W -T strategies establishes plans to overcome the firms weaknesses and less vunerable to external threats. Environmental analysis or external audit: The organizations should adapt themselves and their strategy to the external environment which is constantly changing. The external environment is also called macro environment. These forces of the external environment cannot be controlled and can be analyzed using a variety of tools and techniques such as Environmental Scanning and PEST analysis. 3.1 Environmental Scanning Environmental scanning is defined as the process that seeks information about events and relationships in a firms environment, the knowledge of which help top management chart the firms future. Environmental scanning is used to gather information from the environment. In this process, the external environment is divided into sectors or areas such as political, economic, cultural, technological and further analysis such as PEST analysis can be done after scanning the environment. Information is collected by monitoring and forecasting any changes that occur to the variables of the environment that have been identified earlier. This collection of information helps the organizations to find out where they are lacking and what exactly they need which helps them in formulating the strategies. (Acar 1995) 3.2 PEST Analysis PEST analysis identifies the external forces that affect the organization such as Political, Economic, Social and Technological drivers. It is very useful for the organization when used together with other tools such as the SWOT analysis. (wikipedia n.d.) Political Factors These factors may have a direct or an indirect impact on the way the organization operates. Laws made by the government may have a huge impact on the way business is conducted by the organization. Economic Factors Economic factors such as the market prices and market cycles which in turn affects the buying power and the behavior of the organizations customers. Sociological Factors Sociological factors include the lifestyles, demography characteristics, and the cultural habits and characteristics of the customers. These factors have a huge sway on the requirements and desires of the customers and also affects the size of potential markets. Technology Factors Technological changes have an important role in modeling how organizations operate with the resources that they have. Technology is a factor which is very important to gain a competitive advantage over the closest competition. Technological innovations can also improve the efficiency of production, speed and quality. Evolving technologies will change how organizations operate. 3.3 Porters Five Forces Model Analysis: Michael Porter is credited for his five forces model of competitive strategy. The power of each of these forces varies from industry to industry, but taken together they determine long-term profitability. These five factors will affect the strategies which will be adopted by the organization and hence should be carefully analyzed. To be successful, the organization must respond in an effective manner to the environmental pressures exerted on it. (Kazmi 2002) The diagram given on the next page shows the five forces of this model. C:UsershaiDesktopPorter.GIF Figure 3.1 Internal environmental analysis: The resources, strengths, behaviors, weakness and distinctive competences are major components of the internal environment of an organization. An organization uses different types of resources which help them achieve their objectives and the way in which they utilize their resources can be the source of their strengths or weaknesses. This can also be defined as organizational capability which is used to develop the strategies and objectives which the organization can achieve and these should not unrealistic according to its capabilities. Some of the components of the internal environment of an organization are: 4.1 Organizational Resources These are all the tangible and intangible inputs used in the organization to create the outputs of the organizations product or services. 4.2 Organizational Behavior The behavior of an organization demonstrates is the result of forces operating internally which will determine the abilities of the organization or constraints in the usage of resources. 4.3 Competency Competency of an organization is the ability to do what its competitors cannot do or the ability to do better than what they can do. This concept is used for strategy formulation. Conclusion: It can be seen that the analysis of the environment is critical to the success of the decisions that managers have to make which have widespread impact on the functions and processes of the business.

A merger between Kennecott and Carborundum Essay

In 1968, Kennecott Copper Corporation made a hasty decision when it purchased Peabody Coal Company. In the years preceding the acquisition, Kennecott had experienced wide swings in its profitability, which it was looking to offset by diversification. Investing in another company in a different industry was an intelligent decision; however, Peabody was the wrong company to do this with. Although Peabody had been profitable and stable over the past few years leading up to the acquisition, the internal rate of return related to the investment was not high enough to justify a purchase of the company. Peabody’s cost of debt was .038. This was calculated by assuming a 40% tax rate and .095 rate on debt (Exhibit 3). There was a .095 interest rate on notes payable due June 30, 1998; therefore, we assumed the rate of debt at the time of purchase would have been similar. Also, Peabody’s cost of equity was .1397. This was calculated by using a risk-free rate of .055, which was the rate of the 90-day T-bill in 1968. A beta of 1 was assumed and a .082 market risk premium was used. The latter figure was determined by taking the average returns on the short-term T-Bill rate from 1951-1975. This rate was used because we know Peabody was a short-term investment and the years 1951-1975 give a more accurate reflection of the market return than using the figure from 1926-1987. Furthermore, the weight of debt and equity were .35 and .65 respectively. These figures were used because we are told that approximately 65% of Kennecott’s net worth was tied up in Peabody. These figures gave a weighted average cost of capital of 9.70%. The IRR for this purchased was calculated by using $621.5 million as the initial investment. This figure was determined as a result of Kennecott giving Peabody $285 million in cash, assuming $36.5 million in liabilities, and taking on a reserved payment of $300 million. Also, the figures used to determine IRR came from the figures given under cash flow from operation for the 8 years preceding the Peabody acquisition. This gave us an IRR of 6.8% (Exhibit 3), which is less than the WACC. When the IRR of a project is less than the WACC, the project should not be accepted. Likewise, after Peabody was acquired, it under-performed for several years until Kennecott sold it. Because of its underperformance, Kennecott had to sell Peabody for less than it paid for it. After being forced to sell Peabody, Kennecott had a large amount of cash on hand, which it did not know what to do with. Instead of giving the money back to its investors in the form of dividends or repurchasing shares of Kennecott stock that was trading below book value of the firm, Kennecott once again chose to diversify by investing in another company. This time Kennecott tendered an offer to Carborundum, a company that produced abrasives and ceramics used in the high-technology industry. Kennecott is correct in its decision that it must do something with its excess cash. By doing nothing, it will be vulnerable to a takeover; however, we do not believe diversification is the most prudent form of action. Kennecott is simply reacting to low and unstable copper prices, which have drastically hurt its bottom line. Furthermore, there are no obvious synergies connected with this deal. During an acquisition, the company being acquired should provide a greater value to the acquiring firm, than to any other firm. Because there are no synergies and the fact that the $66 tender is over $31 greater than Carborundum’s book value, the acquisition should not be made. Similarly, when discovering the terminal value, we took the total capital for 1976 and divided it by the net profit (Exhibit 1). We then took this figure, which was 10.68, and used it as our multiplier. We multiplied the projected net incomes for the next 10-years by 10.68 (Exhibit 2) to discover the firms terminal value. Finally we added the firm’s projected terminal value in 1977 to its net present value, which we calculated to be ($1.05 Million). This was achieved by discounting the cash flow each year by the IRR. So for year 1 the formula was (410)/1.054 giving (389). We discounted through 1987 (Exhibit 4). The large initial investment is what hurt Kennecott. They paid too much for a company they knew little about. This gave us a firm value of $ 409.06 million in 1977. At the time of the tender there were 8 million outstanding shares. At $66 per share, Kennecott was paying $528 million for a firm with a value of only $409.6 million. Obviously, it does not make sense to acq uire this firm. Like wise, Kennecott was ignoring its responsibility to its shareholders. Making this acquisition would dilute shareholder value. This was most evident in the actions of one investor who took the time to file a suit against Kennecott. This investor also believed the tender offer was too high. We feel Kennecott would best benefit from a stock repurchase. At the time of the Carborundum tender offer, Kennecott’s stock was trading at $28 per share, which was $14.50 less than its book value. By not partaking in a stock repurchase, it appears as if Kennecott does not believe it can turn its own operations around. If it cannot fix its own business, it should not be expanding. Kennecott must take an inward look at itself and discover where its problems lie. Until this is done, it should put ambitions of expanding on hold.

Knowledge Brings Sorrow

Knowledge Brings Sorrow; Fate vs. Free Will The themes of â€Å"fate versus free will† and â€Å"knowledge brings sorrow† are present throughout the play Oedipus Rex, by Sophocles. Fate and free will are antitheses of each other, just as knowledge and sorrow are. Many years before Oedipus began his journey to Thebes, his father, King Laius, heard a prophecy saying that his son would kill him (65). In order to prevent this from happening, Laius had the baby abandoned, and had his feet bound together with a nail for extra precaution. Since prophecies usually turned out to be true, this is an example of how Laius tried to escape his fate. However, he didn’t know that Oedipus survived. On his way to Thebes, Oedipus ran into Laius on the road, not knowing he was his father. He ended up killing him, just as the prophecy said. The prophecy also said that Oedipus would marry his mother. You can infer that fate yet again fulfills its role, and the prophecy becomes true after Oedipus kills his father and continues to Thebes. Just as Oedipus didn’t know that Laius was his father, he didn’t know that Jocasta was his mother. He became the new king of Thebes because he married Jocasta (65). Throughout the play, Oedipus believes that all of his actions are based on free will, not fate. He doesn’t find out that he killed his father and married his mother until awhile after it happened. Everything that happens to Oedipus is really his fate. Once Jocasta and Oedipus Strineka 2 realize they are mother and son, Jocasta kills herself. Here, fate plays another role. Free will really isn’t present in this play. Everything that happens is due to fate. As Amit Sodha said, â€Å"All events are fated in some way. † This is also where â€Å"knowledge brings sorrow† comes into play. Because Jocasta and Oedipus found out that they were mother and son, Jocasta kills herself and Oedipus gouges out his eyes. They do not want to accept the fact that they were mother and son and married. Sodha also said â€Å"The trouble with fate is that it can leave you with a feeling of helplessness. † It’s obvious that Oedipus and Jocasta definitely felt helpless in their situation. Although the prophecy said nothing about Oedipus killing himself, it said hat he would kill his parents. He didn’t kill Jocasta himself, but the reason she killed herself in the first place was because of Oedipus and their marriage. This is a good example of how some things are better off left unknown. In this situation, knowing everything was obviously not such a good idea. People wouldn’t want to know every single detail if things w ere said clearly, and not in such an ambiguous manner. When things are said so that they could possibly have multiple meanings, people become curious to figure out what is actually meant. The outcome of figuring out meanings could be good or bad. Just like the saying â€Å"curiosity killed the cat,† curiosity killed Laius, Jocasta, and Oedipus, and placed a curse on their whole family. In the play, fate triumphs over free will, and knowledge definitely brings sorrow. It’s ironic that fate triumphs over free will and knowledge brings sorrow because most people do things without thinking that it’s part of their fate, and you would think that knowing more would enlighten you rather than bringing you grief and sorrow. In reality, people who are generally â€Å"smarter† and have more knowledge are usually the ones who are most successful in life, and being successful is usually associated with having a good life and being happy. Strineka 3 However, it makes more sense that people who are more aware of life and their surroundings are the ones who feel sorrow and grief. They’re the ones who know what life is really like. They see the flaws of the world and how careless and ignorant people can be. It is possible for knowledge to limit the lives of people, because those who know what is going on often try to change things so the outcome will hopefully be different. For example, if someone had a serious illness but didn’t know about it, they would go on living their life normally without any worry. But if this person knew about the illness, they would probably live their life worrying about what’s going to happen to them. In Oedipus, Laius worries about whether or not the prophecy that his son would kill him will come true. He takes ridiculous actions just to prevent it from happening, but he ends up being killed by his son anyways due to his fate.

Essay The Ethics of Longevity - 894 Words

Within the last century, the advancements of modern science, technology and research have increased the average human life expectancy worldwide. While new research has produced drugs to help us live longer with diseases like cancer, AIDS and diabetes, it has also created designer drugs to aid and relieve the side affects of aging. With these benefits come personal rights and social responsibilities not faced by previous generations. For all of the of those that work tirelessly to bring these drugs to improve the daily life of others for little rewards, there are pharmaceutical giants whose profits climb to new heights by marketing drugs to the aging population. This paper will discuss two ethical issues surrounding longevity, the ethics†¦show more content†¦(Phatak, 1998) Many companies have found deceptive ways around the medical community to sell consumers a magic pill, whether it’s truly a new drug or not. A small little tablet called Protandim was released on the market claiming to ‘reverse the damages of aging’ by a company called LifeVantage. (marketwatch.com, 2012) These patented pills are classified as ‘supplements’, not pharmaceuticals, and the company is registered as a ‘food product’ manufacturer. The general public may not know they don’t have the protection of FDA standards if they take these pills, supplements don’t need FDA approval in the U.S., as a new drug coming to market would. (FDA, 2012) The decision to take products to maintain a healthy lifestyle, whether it is medications, supplements, vitamins, or energy drinks, is an individual’s choice. The struggle to stay young as we all inevitably age raises the question: What is life worth if you do not have quality of life? Quality as defined by the individual. What if, as many face across the globe, ‘quality’ becomes the right to choose not to live longer, but to die with dignity? 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