Prior to beginning this discussion, review section 7.4 Contingency Planning in your textbook. Strategic plans are focused on current and future company goals, therefore changes in the environment must be detected and monitored. Changes in the environment that impinge on the company’s strategic plan are known as external triggers and triggers are paired with plans to successfully deal with them. These paired actions are known as contingency plans. What qualities make a future issue a “trigger”?
As an example, consider you are on the strategic planning team for a soft drink company. A merger of two major competitors next year would constitute a future trigger. For this discussion, consider the Environmental Scan and SWOT analysis you conducted in Week 2. Formulate a trigger/contingency pair in the form of a three-part sentence similar to the example in the textbook. Examine it in terms of the three guidelines that good contingency plans should follow.
Post a summary of your selected company and risks that you perceive based on your prior Environmental Scan and SWOT analysis. State the three-sentence trigger/contingency pair and justify your choice of contingency plan using information from the week’s readings and/or other scholarly or credible resources, using the Scholarly, Peer-Reviewed, and Other Credible Sources (Links to an external site.) table for guidance.
(NOTE: Incorporate the feedback you receive from your instructor and save your work. It will be part of your Strategic Plan Final Project for this course).
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SWOT Analysis |
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Environment |
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Opportunity |
Threat |
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Company |
Strength |
What are the company’s advantages? |
What could the company improve on? |
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Weakness |
Where are the good opportunities in front of the company? |
Does the company face obstacles? |
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Global expansion. Similar to the giant international organizations by Walmart, apple company, and eBay, the Amazon organization has multiple opportunities of expanding to developing economies due to its firm brand name and Proud image. The organization has an opportunity of expanding to other areas of business, such as the transport sector hotel industry, to spread risk and increase the channels of cash inflow. The Enterprise should consider investing in a physical store to attract customers interested in them. Finally, the Enterprise should take action against counterfeit products (Vargas Leon & Kuehn, 2014) |
There are multiple areas in which Amazon company should improve. One of the primary three ways the organization has been deteriorating is in the financing mechanism, as the organization has been overly relying on Debt financing. The organization’s level of debt has been increasing considerably from the Year 2019 to the year 2021 December, which poses a significant threat to the organizational capacity to finance the death principal amount, including the interest expenses and card of the same. Other financing strategies should be considered, such as increasing the number of shares issued and leasing assets rather than borrowing cash to purchase the same, among other mechanisms that would improve the company’s debt position (Vargas Leon & Kuehn, 2014). |
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Lower profit margins. Similar to other giant retailers, the company is obliged to sell its products at subsidized prices, which diminishes its capacity to maximize profits. The organization of product failures. This is an excellent example of why the Enterprise is lagging due to the loss of customers due to the biggest failure, such as the fire phone released in 2014 and the Kosmo close down in 2016 (Sokolenko, 2020). Physical stores are limited as the organization primarily relies on cloud computing and e-commerce; therefore, having a limited brick-and-mortar presence. |
Cyber security. Amazon’s electronic commerce channels and infrastructure are regarded as a prime target for Cyber-attacks and hacking. Competition. The Amazon organization faces stiffer competition from the already established markets such as Walmart, eBay, and Netflix and the new entrants into e-commerce. The regulations are consistently changing, which can adversely impact the company’s profitability in the future. |
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