Reflection: Week 2 Andrew Bloom BADM 638 Strategic Decision Making Dr. Ron Spicer 9/6/23 Concepts, Methods, & Terms Two key concepts and terms that are imperative for understanding this week’s topics include external forces and a resource-based view (David & David, 2020). External forces are a collective of powers that exist outside of the business entity which have an effect on the operations and revenue of the business. The ten most important external forces that have the greatest impact on the business include economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive circumstances (p. 617). These forces must be evaluated, tracked, and planned for when making strategic decisions. There are times when these forces are beyond prediction or control, but having conditional systems and backup plans can help mitigate their effects. A resource-based view is one that understand external forces but will prioritize internal resources because of a belief that these factors ultimately achieve a competitive edge for the firm (David & David, 2020). By harnessing appropriate internal resource, a business can handle a multitude of external threats. Some examples of internal resources include lab, capital, property, brand reputation, and intellectual property. The value of a resource depends on its rarity and the degree to which it is able to be replicated. Question 1 International commerce must frequently spar with various government legislature that restricts or bans its operations. Depending on the geography of the market, this occurrence can happen more or less frequently. When a government is protecting its country through limiting the import or taxing the sale of foreign goods, an international firm can mitigate this issue by looking into ways to contract or flow business through American-own and operated suppliers or merchants, as well as ensuring that they are diversifying the markets they enter into internationally. It’s also possible to cope with increasing costs, such as the addiiton of a tax, by using marketing to emphasize the value of the product as exceeding its cost. Question 2 As someone who owns and operates a small online business, I agree with the resourcebased view that internal forces, such as one’s brand, product value, value chain, etc. are more important for creating profit and value than having ideal external factors. While it’s crucial to stay abreast of external variables, it’s also the entrepreneur’s job to be creative and solve new problems with valuable solutions as they arise. Doing so often gives the business greater value. It’s far easier to change the resources that are owned than change external resources. However, this may make more sense for smaller companies than larger ones, which deal with different degrees of external forces. For example, it makes a lot more sense for Beyond Meat to have lobbyists than for a small graphic design business selling online services. Larger firms have greater resources to work with external factors and likely face greater threats from external factors than smaller businesses, depending on the industry. Nonetheless, external factors should always be considered in the planning process, but their emphasis in the final decisions will vary depending on firm size and industry. References David, Fred R., David, Forest R.. (2020). Strategic management : a competitive advantage approach, concepts and cases (17th. Ed). Harlow: Pearson.
