External and Internal Environment Analysis

Topics: Environment, Economics, SWOT analysis Pages: 8 (2366 words) Published: February 26, 2013
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 Big 5 fitness products as disposable wants and will not spend during bleak economic times.

There are numerous social factors in the remote environment that affect Big 5, including values, opinions, attitudes, and lifestyle (Pearce, Robinson, 2011). For example, the desire to increase quality of life, participation in sports, added value put on healthy lifestyles (wellness), and the fight against obesity continues to increase across all demographics throughout the U.S. “More than half of Americans (55%) say they are trying to drop some weight, up significantly from 43% in 2011” (Hellmich, 2012, p. 1). This change in social values presents opportunity for Big 5 to highlight specific weight loss product lines, such as its treadmills, exercise bikes, running shoes, and complimentary apparel accessories, to name just a few.

A growing factor in Big 5’s remote environment is the concern for ecology, including the air, water, and soil (Pearce, Robinson, 2011). As society has become more educated on the factors that damage the ecology, so has consumers demand for companies to become “green” and reduce their carbon footprint. This remote factor presents an opportunity for Big 5 to implement eco-efficient strategies (eco-efficiency) and policies. Stephen Schmidheiny defines eco-efficiency as “to describe corporations that produce more-useful goods and services while continuously reducing consumption and pollution,” (Pearce, Robinson, 2011, p. 88). For example, Big 5 may consider more Internet heavy advertisements and the use of Search Engine Optimization (SEO) to attract more customers to its website. This opportunity will reduce the use of paper, printing supplies, and disposal services

Although the paper details economy, social, and ecology, technological, and political factors also play a factor in Big 5’s remote environment. For example, the introduction of new bar scanners that increase operational retail efficiencies (technological), or the...

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
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.
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