Essays on Internal and External Operational Environments - NAPCO Case Study

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The paper "Internal and External Operational Environments - NAPCO" is an outstanding example of a management case study.   For the attainment of business goals and objectives, it is imperative to control the business operational environment {Quinet2004}. The environment includes both the internal and external operational environments which have both direct and indirect implications on the business outcomes {Wang2011}. Internal environment refers to the immediate operational environment within the entity’ s operations including management procedures, staff interactions and various internal company policies {Powell2001}. On the other hand, the external environment refers to factors such as political, competition and other external trends that implicate on organizational performance {Aaltonen2011}.

Controlling the business environments both external and internal is tantamount in achieving success in business operations. Most companies thus rely on intensive and in-depth market research in order to understand the various external factors and their potential impacts on the organization's performance {Barney1991}. This research guides the strategic planning processes and measures involved in operations with the aim of improving and sustaining competitive advantage. As such, external environment analysis in recommending change processes necessary for outcome improvement.

This perspective paper discusses the concepts of external environment analysis, five forces analysis and sustainable competitive advantage {Peteraf1993}. Additionally, these concepts are used in providing an analysis of their practical applications using two selected case studies. External Environment Analysis and Competitive Advantage External environment analysis refers to an in-depth and detailed look into the external market forces that have implications on organizational outcome {Aaltonen2011}. Michael Porter designed the Porters Five Forces Analysis that stipulates five main market forces that are considered when analyzing the external environment. {Barney1991}. These five forces are the buyers’ bargaining power, suppliers bargaining power, new entrants’ threats, substitute products threats and industrial rivalry {Porter1985}.

To survive negative impacts, competitive advantage is imperative which is achievable in various ways {Mason2008}. Firstly, response to customer needs achieves customer satisfaction by delivering products and services that meet their expectations hence earning customers loyalty and support {Peteraf1993}. Secondly, researching is key in designing developments {Powell2001}. Additionally, intellectual rights such as trade names, trademarks, patents and copyrights, when well exploited could offer entities competitive advantage {Claudiu2011}. Fourthly, holding distribution rights, within various territories imply that consumers would only get products through the right holders or distributors {Vorhies2005}.

Where heavy machinery is needed, capital equipment ownership presents a competitive advantage. Furthermore, producing in high volumes and reducing profit margins would increase volume sales and turnover {Durand2009}. Additionally, strategic market locations in consideration of economic factors may present competitive advantages to the organizations {Woodruff1997}. Manufacturing firms in India and China, for instance, enjoy favourable labor and start-up overhead costs hence gaining a competitive advantage over similar US industries {Claudiu2011}. Superior marketing strategies are essential in enhancing competitive advantage {Wang2011}.

In industries such as telecommunication and banking, the speed and accuracy in data processing influence customer preferences hence attracting competitive advantage {Cockburn2000}. Working capital access, arguably, is among the strongest competitive advantage sources {Claudiu2011}. Additionally, an effective management and operations team harnesses opportunities hence enhancing business success by boosting its competitiveness {Powell1992}. Finally, monopoly and entry barriers reduce the new entrants’ threats especially in cases where circumstances limit new entries {Banham2010}.

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