Case Study, Stage 1: Business Environment Analysis
Purpose of this Assignment
This assignment gives you the opportunity to apply the concepts of the Porter Five Forces model to a specific business, develop a strategic direction for your Fitness Center, and identify a process that could be improved with the use of technology. This assignment specifically addresses the following course outcomes to enable you to:
- analyze business strategy to recognize how technology solutions enable strategic outcomes
- analyze internal and external business processes to identify information systems requirements.
Business Environment Analysis for UR UMUC Healthy Fitness Center
The UR UMUC Healthy Fitness Center has been in business since 1980 and has seen an increase in competition from small fitness centers, Cable TV and Internet Exercise channels and sites, Wii and other TV Game Console, various exercise equipment infomercials and increasing supply of Exercise DVD’s . One of your fitness instructors told you that she saw a sign announcing the construction of Gold’s Gym (a well-known national fitness franchise) a few blocks away. Your staff is worried and is looking to you to provide reassurance that the competition will not affect the business. In addition, you have decided to develop your strategic direction for bringing the UR UMUC Healthy Fitness Center into the 21st century.
You know that Michael Porter’s Five Forces Model is a useful tool for analyzing a business, understanding the importance of the five competitive forces and helping to develop its Generic Strategy. It is also used to aid organizations facing the challenging decisions of dealing with changes made by existing competitors, entering a new industry or industry segment, or developing a strategy for dealing with new competition. The Five Forces Model helps determine the relative importance of the forces affecting competitive position that could affect the future success of a business. The Five Forces are:
- Buyer Power
- Supplier power
- Threat of substitute products or services
- Threat of new entrants
- Rivalry among existing competitors
The Five Forces and the Generic Strategy are fully described and discussed in the textbook, and the Business Model and Competitive Advantage are covered in Module 1. In order to analyze the Fitness Center’s current competitive position and develop a Generic Strategic direction, you have decided to use the Five Forces Model to analyze your Fitness Center business.
Using the textbook and external resources, write a short paper 2-3 pages in length, not including References page and cover sheet, responding to the bulleted items below. Remember to use the APA formatting rules and correctly cite and reference your sources with APA format. Use the Grading Rubric to be sure you have covered everything. Submit your paper via your Assignment Folder as a Microsoft Word document with your last name included in the filename.
Create a document that includes the following:
- Brief introduction providing the background of the case, why you are writing and what is to come in your paper. This should only be 3-5 sentences.
· Perform a Porter’s Five Forces analysis for your UR UMUC Healthy Fitness Center, addressing each force in one or two sentences and defining the force, its impact (Positive, Negative or Neutral) on the Fitness Center and whether it should affect your strategy (Yes/No). (See Textbook, pp. 18-21 and Course Module 1.) Do not identify solutions or things that you are doing that would affect the factor. (The idea is to identify how the different forces affect the UR UMUC Healthy Fitness Center and how much.) This provides you with a view of the business that will allow you to select a Generic Strategy and a Strategic Business Area on which to focus your efforts.
- Determine which of Porter’s Three Generic Strategies (see textbook page 22) that you will use to improve your UR UMUC Healthy Fitness Center for the 21st century and explain why you selected it and tie it into the significant forces that you have identified.
· Using your analysis of the Fitness Center’s Business Model (based on what you learned in Module 1), identify an important Strategic Business Area that needs to be improved. The Strategic Business Area is to be selected from the direct variables (explained in Module 1 and illustrated in the Walmart Example Case Study, page 3). The Direct Variables are: suppliers, competition, employees, location, organizational components, owners and customers. The Walmart Example demonstrates use of this concept, so you should review it and make sure that you are on the right track. Explain why you have selected that Strategic Business Area and how improving it will improve operation of the Center, including how it relates to the Generic Strategy you selected.
- Within the selected Strategic Business Area, identify and select a single daily process that is within and supports the Strategic Business Area that needs improvement. Note: A process is defined in your textbook as “a standardized set of activities that accomplish a specific task, such as processing a customer’s order.” (Baltzan, 2013, p. 23) (In Stage 2 you will model the AS IS process and the TO BE Process, and propose a technology solution to improve the process you identify here, so select a process that is appropriate for a technology solution.)
- At the end of your report with your References enter the following headings and complete the information using one concise phrase for each. You will be starting each subsequent stage by including this information as a method to keep us focused on the objectives.
STRATEGIC BUSINESS AREA:
PROCESS TO BE IMPROVED:
In determining which process you select for improvement, be sure to keep in mind the remaining projects within this Case Study. You should review Stages 2-5 to get an understanding of the future projects that build on this initial stage and to aid you in selecting a process (and later proposing a technology solution) that can support the requirements of the follow-on assignments.
Do not start on Stage 2 until you receive feedback on this Stage as the Process that you select is crucial and your instructor may recommend that you change processes so that you can successfully complete the case. You MUST incorporate the recommended changes in all subsequent Stages.
The “right” and “wrong” answers have to do with whether or not you correctly incorporated the course concepts from the textbook and addressed all parts of the assignment. You need to do some external research on at least one aspect of the assignment – your choice – and incorporate it and cite/reference it in APA format in your response. The specific strategic area you select for a technology solution is not as important as that it makes sense in light of the course content and the Case Study and is well supported with your application of the course concepts and your external research. Use the Rubric below to be sure you have covered all aspects.