Select a company that you perceive as having strategic issues.

1. Identify the company’s overall strategy and describe the key strategic risks it is facing as well as their potential impacts. Consider the relevant competitive forces in your analysis (threat of new entry, supplier power, threat of substitution, buyer power, and competitive rivalry).
2. Recommend approaches to mitigate the strategic risks that you have identified under (#1).
3. Opine on whether the company’s overall strategy can be pursued successfully. Would your recommended mitigation strategies (see (#2), if implemented, change your assessment?

Your selected company needs to be one where you can gather a broad array of information; assuming it is a public company, its 10k filing with the SEC will be a very productive source of information. We recommend you choose a company that interests you or that you have read about in a business journal.

This assignment is worth 20% of your grade. Your work will be evaluated based on the following criteria:

• Ability to identify key aspects of points (#1) through (#3) above.
• Supporting Analysis: you are able to support your analytical observations and strategic recommendations.
• Writing: you are able to communicate your analysis in a clear and concise manner.

The assignment should be 5 pages max and no more than 2,000 words.

Five pages and the word count refers to your actual analysis section. You do not have to count in the table of content, cover page, citations, appendix, etc. – should you choose to include any of those in your paper.

We encourage you to include external sources in your paper but, at the same time, the use of clear citation is of utmost importance.

When writing the paper imagine you are a new but aspiring analyst at firm writing for a busy senior executive. Keep your paper clear and concise!

Grading Framework

• Company’s Overall Strategy (40pts)

Students need to clearly identify their selected company’s overall strategy and give precise references to the source. Potential sources might include, but are not limited to:

1. Business Strategy Section of the 10k
2. The company’s Mission/Vision Statement
3. CEO’s public comments/interviews, etc.
4. Other sources if quoted properly

• Key Strategic Risks (40pts)

Students need to evaluate the strategy of their selected company and identify key strategic risks as well as potential impacts. Frameworks might include, but are not limited to:

1. Ansoff Matrix
2. SWOT Analysis
3. Porter’s Five Forces
4. PESTEL Analysis

• Mitigation Strategies (40pts)

Students are asked to recommend potential mitigations for the strategic risks that they identified under 2). Students are expected to build their case and provide actual recommendations as opposed to merely listing mitigation items. Finally, this part of the assignment will be evaluated based on whether the mitigation items seem credible.

• Opine on the Company’s Overall Strategy (40pts)

This part of the assignment will be evaluated based on how well it ties back to 1)-3). Does the student consider all three previous parts when coming up with a conclusion, and is the conclusion plausible?

• Writing Style (40pts)

Is the analysis done in a clear and concise manner? Is the paper written to appeal to a senior executive, i.e. does it have an (executive) summary, does it use bullet point format, etc.? Are all external sources clearly marked as citations?

An executive summary should summarize the key points of the report. It should state the purpose of the report, highlight the major points of the report, and describe any results, conclusions, or recommendations from the report.

1. Key Strategic Risks and Potential Impacts

As a multi-jurisdiction corporation operating in a rapidly evolving payments industry, a highly connected global economy and an environment characterized by intense competition and stepped-up regulatory scrutiny, the company faces a number of strategic risks and challenges.

The most significant and critical risks with the potential to de-rail the company’s strategic priorities are listed below.

Strategic Risk #1 (Regulation)

• The payments industry continues to face heightened regulatory oversight. The introduction of new rules and restrictions relating to privacy and data protection, anti-money laundering, anti-corruption, etc. is reshaping the way the industry operates. It has necessitated investment in new processes and systems, and curtailment of certain activities.

Regulations continue to evolve and will undoubtedly create additional pressure for industry participants to be compliant. Non-compliance comes at a high cost in the form of fines, potential termination of licenses and significant reputational damage.

• New regulation relating to interchange fees (for e.g. under Dodd-Frank in the U.S. or the IFR in the E.U.) has a direct bearing on how rates are set with a consequent impact on transaction volumes. This directly affects revenues and the profitability of Visa.
• Government imposed restrictions in some countries (China, Russia, etc.) favor domestic players in that they require domestic payments processing to be done in-country. Where Visa does not have such capability, it directly affects its ability to compete in those markets.

Strategic Risk #2

Strategic Risk #3

Strategic Risk Management of XYZ Company

Executive Summary

1-2 paragraphs

Introduction

1-2 paragraphs

“Porter’s Five Forces Analysis” for XYZ Company

Porter’s five analysis assumes that five forces affect XYZ’s competitive level.

1. Analysis Paragraph 1
2. Analysis Paragraph 2
3. Analysis Paragraph 3

Key Strategic Risks

Based on their current environment, XYZ company faces these key risks:

Risk 1.

• Overview of risk
• Impact of risk

Risk 2.

• Overview of risk
• Impact of risk

Risk 3.

• Overview of risk
• Impact of risk

Risk 4.

• Overview of risk
• Impact of risk

Risk 5.

• Overview of risk
• Impact of risk

Mitigation Strategies

XYZ company should consider the following approaches to mitigate the risks described above.

• Mitigation Strategy 1 – paragraph(s)

Overall Conclusion

A few paragraphs and/or bullet points

Works Cited

1. Information Source 1
2. Information Source 2

Porter’s Five Forces

Assessing the Balance of Power in a Business Situation

Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are:

1. Supplier Power:Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on. The fewer the supplier choices you have, and the more you need suppliers’ help, the more powerful your suppliers are.
2. Buyer Power:Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you.
3. Competitive Rivalry:What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you’ll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don’t get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength.
4. Threat of Substitution:This is affected by the ability of your customers to find a different way of doing what you do – for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power.
5. Threat of New Entry:Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.

Porter’s Five Forces

Porter-s Five Forces

APA

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