Environmental Analysis

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Environmental Analysis
Tosha L. Hawkins
MGT/578 Strategy Formulation and Implementation
Dr. Edward Lee Heinz
December 5, 2005

Introduction
When it comes to operating an organization, there are tons of things to consider. You have the day to day business, but one must think about the long-term goals and objectives of the company. One way of doing this is by doing an environmental analysis. An environmental analysis is made up of more than one component, such as remote, industry, and operating. These components assist in developing a long-term objective. Along with the long-term objective come seven qualities to make it work: acceptable, flexible, measurable, motivating, suitable, understandable, and achievable. For the next three years Paychex has some long-term objectives that would make them be very successful in their environmental analysis.

Remote Environment
The remote environment breaks down in five other categories: economic, social, political, technical, and ecological. These are the stages that can make or break a market segment of an organization. This can deal with a company’s credit ratings, interest rates, and inflation rates. In regards to Paychex, they are a debt free company that started out with $3000 on a credit card. They have accumulated enough clients in which they do not owe anyone. You also have those that are into beliefs, values, attitudes, legal and regulatory parameters, creative technological, and reciprocity between business and the ecosystem.

Industry Environment
“Factors that more directly influence a firm’s prospects originate in the environment of its industry, including entry barriers, competitor rivalry, the availability of substitutes, and the bargaining power of buying and suppliers” (Pearce, 2005) ADP, Ceridian, and Intuit, are some of Paychex’s competitors. They try and compare, but have a difficult time due to Paychex being a company of service. They do not only think...
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