MGMT4308 DR. HUANG Knowledge Base for General Environmental Analysis1 The general environment is composed of factors that can have dramatic effects on firm strategy. We divide the general environment into six segments: demographic, sociocultural, political/legal, technological, economic, and global. Here is a description of each segment. Some factors in each segment are also listed at the end for you to consider, although many of them may not be quite relevant to the industry in our case analysis. The Demographic Segment Demographics are the most easily understood and quantifiable elements of the general environment. They are at the root of many changes in society. Demographics include elements such as the aging population, rising or declining affluence, changes in ethnic composition, geographic distribution of the population, and disparities in income level. The impact of a demographic trend, like all segments of the general environment, varies across industries. Rising levels of affluence in many developed countries bode well for brokerage services as well as for upscale pets and supplies. However, this trend may adversely affect fast-food restaurants because people can afford to dine at higher-priced restaurants. Fast-food restaurants depend on minimum-wage employees to operate efficiently, but the competition for labor intensifies as more attractive employment opportunities become prevalent, thus threatening the employment base for restaurants. The Economic Segment The economy affects all industries, from suppliers of raw materials to manufacturers of finished goods and services, as well as all organizations in the service, wholesale, retail, government, and nonprofit sectors. Key economic indicators include interest rates, equity markets, unemployment rates, the Consumer Price Index, the gross domestic product, and net disposable income. Interest rate increases have a negative impact on the residential home construction industry but a negligible (or neutral) effect on industries that produce consumer necessities such as prescription drugs or common grocery items. The Political/Legal Segment Political processes and legislation influence environmental regulations with which industries must comply. Some important elements of the political/legal arena include tort reform, the Americans with Disabilities Act (ADA) of 1990, the repeal of the Glass-Steagall 1 Sources: Dess, Gregory; Eisner, Alan; Lumpkin, G.T.; McNamara, Gerry. Strategic Management: Creating Competitive Advantages, 7th Edition (2014) Publisher: McGraw-Hill Higher Education. Rothaermel, Frank. Strategic Management: Concepts, 2nd Edition (2014) Publisher: McGraw-Hill Higher Education. 1 MGMT4308 DR. HUANG Act in 1999, deregulation of utilities and other industries, and increases in the federally mandated minimum wage. Government legislation can also have a significant impact on the governance of corporations. The U.S. Congress passed the Sarbanes-Oxley Act in 2002, which greatly increases the accountability of auditors, executives, and corporate lawyers. The Socio-cultural Segment Socio-cultural forces influence the values, beliefs, and lifestyles of a society. Examples include a higher percentage of women in the workforce, dual-income families, increases in the number of temporary workers, greater concern for healthy diets and physical fitness, greater interest in the environment, and postponement of having children. Such forces enhance sales of products and services in many industries but depress sales in others. The increased number of women in the workforce has increased the need for business clothing merchandise but decreased the demand for baking product staples (since people would have less time to cook from scratch). This health and fitness trend has helped industries that manufacture exercise equipment and healthful foods but harmed industries that produce unhealthful foods. The Technological Segment Developments in technology lead to new products and services and improve how they are produced and delivered to the end user. Innovations can create entirely new industries and alter the boundaries of existing industries. Technological developments and trends include genetic engineering, Internet technology, computer-aided design/computer-aided manufacturing (CAD/CAM), research in artificial and exotic materials, and, on the downside, pollution and global warming. Petroleum and primary metals industries spend significantly to reduce their pollution. Engineering and consulting firms that work with polluting industries derive financial benefits from solving such problems. The Global Segment More firms are expanding their operations and market reach beyond the borders of their \"home\" country. Globalization provides both opportunities to access larger potential markets and a broad base of production factors such as raw materials, labor, skilled managers, and technical professionals. However, such endeavors also carry many political, social, and economic risks. Examples of key elements include currency exchange rates, increasing global trade and international production, outsourcing and off-shoring, trade agreements among regional blocs (e.g., North American Free Trade Agreement, European Union), and the World Trade Organization (lowering of tariffs). 2 MGMT4308 DR. HUANG As an example of the impact of globalization, increases in trade across national boundaries also provide benefits to air cargo and shipping industries but have a minimal impact on service industries such as bookkeeping and routine medical services. Relationships among Elements of the General Environment In our discussion of the general environment, we see many relationships among the various elements. For example, a demographic trend in the United States, the aging of the population, has important implications for the economic segment (in terms of tax policies to provide benefits to increasing numbers of older citizens). Another example is the emergence of information technology as a means to increase the rate of productivity gains in the United States and other developed countries. Such use of IT results in lower inflation (an important element of the economic segment) and helps offset costs associated with higher labor rates. The effects of a trend or event in the general environment vary across industries. Governmental legislation (political/legal) to permit the importation of prescription drugs from foreign countries is a very positive development for drugstores but a very negative event for U.S. drug manufacturers. List 1: Some Key Economic Variables to Be Monitored Shift to a service economy in the USA Availability of credit Level of disposable income Propensity of people to spend Interest rates Inflation rates Money market rates Federal government budget deficits Gross domestic product trend Consumption patterns Unemployment trends Worker productivity levels Value of the dollar in world markets Stock market trends Foreign countries' economic conditions Import/export factors Demand shifts for different categories of goods and services Income differences by region and consumer groups 3 MGMT4308 DR. HUANG Price fluctuations Export of labor and capital from the USA Monetary policies Fiscal policies Tax rates European Economic Community (EEC) policies Organization of Petroleum Exporting Countries (OPEC) policies Coalitions of Lesser Developed Countries (LDC) policies List 2: Some Key Social, Cultural, Demographic, and Natural Environment Variables Population changes by race, age, sex, and level of affluence Immigration and emigration rates Social Security programs Life expectancy rates Per capita income Location of retailing, manufacturing, and service businesses Attitudes toward business Lifestyles Traffic congestion Inner-city environments Average disposable income Trust in government Attitudes toward government Attitudes toward work Buying habits Ethical concerns Attitudes toward saving Sex roles Attitudes toward investing Racial equality Use of birth control Average level of education Attitudes toward retirement Attitudes toward leisure time Attitudes toward product quality Attitudes toward customer service Pollution control 4 MGMT4308 DR. HUANG Attitudes toward foreign peoples Energy conservation Social programs Attitudes toward careers Attitudes toward authority Value placed on leisure time Regional changes in tastes and preferences Number of women and minority workers Number of high school and college graduates by geographic area Recycling Waste management Air pollution Water pollution Ozone depletion Endangered species List 3: Some Political, Governmental, and Legal Variables Government regulations or deregulations Changes in tax laws Special tariffs Political action committees Voter participation rates Number, severity, and location of government protests Number of patents Changes in patent laws Environmental protection laws Level of defense expenditures Legislation on equal employment Level of government subsidies Antitrust legislation Political relationships between US and other countries Import-export regulations Government fiscal and monetary policy changes Political conditions in foreign countries Special local, state, and federal laws Lobbying activities Size of government budgets 5 MGMT4308 DR. HUANG World oil, currency, and labor markets Location and severity of terrorist activities Local, state, and national elections 6 STEEPLED analysis A STEEPLED analysis is one way of collating current information on a new development across different influencers and to forecast how those influences may develop over time. The NETT conducted a STEEPLED analysis on Developments within UK HE admissions arising from a more dynamic approach to student entry in England. It was produced as an output of the NETT Residential, held at Aston University 11 - 13 June 2013. The NETT comprised members from a range of admissions and related backgrounds with the aim of producing a toolkit of resources to inform and influence the debate around the impact of SNC reforms in England, particularly in ensuring that SPA's principle aim of ensuring fair admissions is considered within this. The STEEPLED analysis was produced from a range of desk-based and primary research by members of NETT. We have included links to a wide range of sources, wherever possible, but the nature of such analysis is that it is occasionally based on anecdote or personal knowledge (or even opinion) and cannot in every instance be referenced back to 'hard data'. The information collated is provided below and may be used as a starting template for Higher Education Providers to develop further within their own areas. It should be used as a precursor to further inform and develop an institutional review of the impact on and risks to policy and practice. It should be used in conjunction with the wider NETT toolkit as part of a comprehensive information, communication and review plan. This analysis was reviewed and updated by SPA in November 2013, to take changes for 2014 entry into consideration. If there are suggestions for amendments or additions we will be happy to receive them. Further, since the analysis is intended as a tool for others to develop to suit their own institution's needs, we are happy for others to adapt our analysis to suit their own circumstances. The diversity of our sector is such that many of the issues presented here will affect those institutions in different ways, and occasionally perhaps in an opposite way to that which we have presented. The STEEPLED analysis is divided across eight influencers: socio-cultural; technological; economic; ethical; political; legal, educational; demographic. Each influencer has been sub-divided in two - representing current and forecast issues. We have deliberately restricted our forecasts to a medium-term planning horizon; that is up to around 2017. Given the velocity of change in higher education at present, that planning horizon is already difficult to predict, but to go further would seem to be more 'crystal ball' than 'scenario forecasting'. By 2017, under a new parliament, government HE policy will likely have been redefined (in one direction or another); the effect of reforms to A Levels and other qualifications on HE will be much clearer; and the fee regime may start to change significantly. The STEEPLED analysis is also available online as a clickable Powerpoint Show or a separate downloadable pdf. 1 Socio-cultural Current Lot of work already done by HE sector and other networks (e.g. IAG) to seek to explain the socio-cultural impact of the new regime - contrasting with little from government itself. Impact of that work is, as yet, unclear. UUK The funding environment for universities UCAS End of Cycle report 2012 UCAS Interim End of Cycle assessment 2013 HEFCE briefing on the impact of 2012 reforms SPA SNC in admissions: Reviewing 2012; Planning 2013 Training / support provided within institutions for staff in admissions, schools / college liaison, planning, functions etc. (as noted within the various surveys) but a divergence of responses as to whether this has been sufficient. NETT survey of HE Planning staff - 74% believed Planning staff in their institution had received enough appropriate training NETT survey of HE Liaison staff - 72% believed HE Liaison staff in their institution had not received enough appropriate training Indications from surveys suggest staff across a range of different roles (e.g. schools & colleges liaison, planning, admissions) are looking at the socio-cultural impacts of the SNC policy. NETT survey of HE Planning staff - 74% thought Planning staff had a role in considering any ethical, equality impact or widening participation considerations of SNC NETT survey of HE Liaison staff - 66% thought HE Liaison staff had a role in considering any ethical, equality impact or widening participation considerations of SNC Complexity of SNC policy is increasing the difficulty (and arguably reducing effectiveness) of oversight (including by governing bodies) within institutions, with the risk that practice not considering socio-cultural impact is allowed to continue unimpeded. Policy on SNC / SNC exemption is becoming increasingly complicated for IAG providers, applicant body and influencers, therefore increasing risk of misunderstanding and the potential for difference in quality of advice given by different parts of the schools and colleges sector. Careers England survey on the impact of the Education Act 2011 NETT survey of teachers - only just over half of teachers (55%) felt they were confident about their understanding of the SNC changes and the impact on their students 3% flexibility on intake (and the limited risks posed by exceeding 103%) allows providers greater leeway to make the right decisions. Impacts to institutions outside of England but within the UK NETT survey of HE Planning staff - 86% of UK respondents outside England felt SNC changes in England had affected their planning arrangements: \"... there is certainly a 'ripple effect' and any impact on our direct competitors is certainly then felt by ourselves. The focus on qualifications data is almost certainly leading to divergence between England and the rest of the UK ...\" 2 Forecast Impact of any under-recruitment in one year may be mitigated by an opportunity to recover position partially in the following year through HEFCEs flexibility scheme. As awareness grows, but old and new terminology persists, there will be an increasing need to ensure everything is consistently labelled and a common choice of words (and common understanding of their meaning) is adopted by all (e.g. not AAB+ or ABB+ but SNC exempt). The impact will be different on different groups, potentially exacerbating long-term educational disadvantage (certain groups are less likely to achieve exemption grades, in particular: disabled students; black students; students from lower socio-economic groups; males). HEFCE consultation 2011 - annex D Improved training amongst schools/colleges liaison staff and better communication approaches from HE providers will improve understanding within schools/colleges and support applicants better through more reliable IAG. NETT survey of teachers - of the 45% of teachers who felt they were not confident or not sure about their understanding of the SNC changes and the impact on their students, 77% said clearer guidance from universities would be most effective in helping them understand better. 3 Technological Current (In)ability of systems (both corporate [UCAS] and institutional) to differentiate between applicant status (SNC, SNC exempt etc.) and which courses are available to which groups. Delivery of core services (e.g. UCAS) is threatened by rapid change in policy framework, not matched by ability to adapt systems. Difficulty in replicating HEFCE and HESA population data within individual institutions can challenge planning scenarios UCAS not keen to support an algorithm because of the risk of litigation. SITS have tried but not highly rated. Inefficient for institutions to provide their own. Need to be applicable to previous years. Gaps in data (e.g. SNC status flags) and the need for a single algorithm to support this in a timely manner. NETT survey of HE Planning staff - several comments cited improvements in the quality of qualifications data and identification of ABB+ achievers would enhance the effectiveness of institutional planning: \"UCAS should develop an algorithm to define SNC status for all UCAS institutions and include within the data for each applicant. This should be updated whenever new qualification information arrives (eg after ABL) and should indicate the source of the data (so we know whether or not it is verified).\" Capacity to identify, monitor and track the variation within different institutions as to the number and proportion predicted (who then achieve) ABB+ and the number not predicted (but who do achieve) ABB+. Applies to both the applicant and enrolled populations. Noticing increased knowledge base and data expertise in admissions staff to work with an increasingly technical set of regulations. Recognised growth in business intelligence (e.g. dashboards) as a result of increased complexities. Forecast Capturing and identifying SNC status within existing software systems is feasible but needs to be kept under review as the regulations change (see also algorithm point). Further changes to qualification exemptions will increase difficulty in assessment at offer/confirmation stages (see also algorithm point). Impact of growth of MOOCs as technological capabilities provide greater stability in delivering HE in different ways; would become increasingly viable and desirable as competition in a restricted traditional full-time undergraduate market tightens. BBC news article - Massive open online courses - threat or opportunity? 01.07.13 4 Economic Current Risk of fines for over-recruitment and claw-back for under-recruitment (because of difficulties of monitoring against multiple targets, let alone the difficulties of delivery to target). Uncertainty of income streams. HEFCE report on financial health of the higher education sector UUK assessment of the funding environment for universities Short timescales (and short period to influence) for delivery to target given that grant letter received after 15 January deadline for applications. EU universities teaching in English and resultant increased competition. GES Database of Programmes taught in English Telegraph article - Where to study in Europe... in English Use of scholarships and bursaries to target SNC exempt population. Times article - Universities vie for brightest students 11.06.13 General poor economic conditions, with limited growth and high market sensitivity, adding pressure on taught programmes. Institutions who have invested heavily, for example in residences, over the past few years remain with heavy debt and borrowing commitments which must be matched by income streams to service, or alternative uses for same. Forecast Resource Accounting and Budgeting (RAB) charge currently understated according to many estimates - this may lead to further policy changes impacting on providers. HEPI report - The cost of the Governments reforms of the financing of higher education As individual institution fees are increased, margin places (gained as a result of lower than average fees) may be reclaimed by HEFCE. UG fees may impact on PGT recruitment from 2015 and a potential for vicious circle increasing pressure to grow UG, PT and OS intakes thereafter to compensate for decline in PGT. Including MOOC and OS collaborations. Growth in private providers may be more limited at present than in the future. Details as yet unclear. Risk of lenient approach in 2013 may not be repeated in future years if overall budget demand on HEFCE is higher than expected, if CSR fundamentally changes the position, or if the economic climate increases pressure for austerity. HEIs may want to recruit more overseas students to compensate for pressure on other income streams, which is challenged by current government policy. IPPR suggestion to introduce OS growth targets seems to be supported by Labour Party. IPPR report - A critical path: securing the future of higher education in England Drive to change tuition fees/funding in future if 9k fees become increasingly unsustainable for some institutions. By 2017 (soonest it will likely change) no change in fees could represent a 16% fall in the unit of resource. However, there are calls within parts of the sector for a managed reduction, not necessarily an increase. Professor David Eastwood at HEPI-HEA Conference 15.05.13 plus THE article on Russell Group Chair weighs in against tuition fee cap Million+ report - Do the alternatives add up? 5 Comprehensive Spending Review - 2013 spending round set savings requirements in higher education for 2015-16: redistribution of National Scholarship Programme funding from undergraduate to postgraduate; maintenance grants fixed in cash terms; and HEFCE charged with saving at least 45 million by reprioritising teaching grant spend. HM Treasury Spending Round 2013 6 Ethical Current Applicants potentially have a greater chance of getting their first-choice institution. UUK statement on lowering ABB Threshold counterpoint NUS statement - no evidence that students have more choice Possible lack of transparency and perceived unfairness of current policy approach. principles of fair admissions Number controls may be leading some institutions to hold on to applicants at Confirmation as a controlling factor. EU students more desirable in some institutions (to fill SNC) and less in others, where SNC may be tighter Risk of indirect discrimination if they are encouraged / discouraged towards particular institutions or types of institutions (thus controlling their choice in some respects). Use of scholarships and bursaries to target SNC exempt population. Times article - Universities vie for brightest students 11.06.13 Nothing within policy redresses existing inequalities across certain groups (e.g. gender, socio economic group). Use of contextual data seen as being more difficult as a result of SNC policy. NETT congruence survey of institution staff highlighted a number of concerns and confusion within just one selective provider over their ability to use contextual data and other measures to widen participation. Forecast Risk of practice that doesnt consider socio-cultural or educational impact is allowed to continue unimpeded. Arguably some of these practices will be increasing choice for certain candidate groups, but influence on applicants at a pressured time needs to be considered. If evidence shows that certain groups are disadvantaged, there will be increased pressure on WP approach and funding thereof (e.g. differential offers if choosing an institution as firm rather than insurance...). 7 Political Current Lack of joined up approach - e.g. between BIS who claim to be supporting growth of overseas students (see para 3.15 of the White Paper) and Home Office who want to reduce net migration figures (albeit with slight increases in student visas issued recently). See also UUK blog on Busting migration myths 05.06.13. between DfE educational reforms including pressure to avoid grade inflation and BIS who were planning for a larger number of AABs in 2012. between educational policies across different constituent parts of UK Not linking Access Agreements to other parts of SNC agenda. OFFA update on aligning offa and hefce processes Some incongruence within HE Providers on understanding of governments rationale for SNC changes. NETT congruence survey of institution staff - 68% of respondents believed their understanding of the governments rationale wasnt as good as it should be. View that Government sees this as simply a matter of funding allocation and fails to see impact on schools, IAG providers and HE Providers. Forecast Difficult for current mechanism for determining SNC exemptions to absorb entirely new qualifications or substantial changes to existing ones, building in greater uncertainty and lack of comparability when new qualifications are introduced. Instability of policy as a result of possible change to, or redirection of, government in 2015. THE article - Labour fees policy may prove unworkable 13.06.13 Likely to be greater diversification of HE sector, in terms of alternative provider growth, alternative delivery modes and cross-border flows, but not greater volume of total student population. Perceived lack of progress on social mobility, particularly within some institutions, may provoke more direct political action and a redirection of funding measures to promote greater inclusion. Social Mobility and Child Poverty Commission report - Higher Education: the Fair Access Challenge 17.06.13 8 Legal Current Greater competition within the sector, making HEIs more wary to share information or intelligence with each other, as they become more aware of Competition Law. Martineau bulletin - Universities, competition law and information exchange Sector bodies (such as UCAS) similarly affected and not able to provide key services demanded by sector (e.g. suppression of data at 15 January in 2013 cycle; concerns over producing an SNC status algorithm if any degree of inaccuracy could lead to litigation). THE article - Ucas withholds 2013-14 application data 14.02.13 Institutions, as a result of the above, reviewing the nature of their relationship with UCAS and matters related to the ownership of data. No HE Bill presented to Parliament following 2011 reforms so policy / position still subject to change / challenge. THE article - HE bill to be shelved indefinitely 24.01.12 Fragmentation of sector regulatory bodies (HEFCE, OFFA, SLC, etc) causing policy conflict. Lack of broadly available sector legal guidance and no precedent in face of legal challenge as of yet. Increased use of solicitors by applicants and students to pursue complaints and appeals - this appears to be part of a much broader cultural shift over several years; recent changes may be adding to an already existing complex range of factors. annual reports of the Office of the Independent Adjudicator(N.B. these relate only to student complaints; no national information is collected on applicant complaints) BBC news article - University complaints 'rise by a quarter', says watchdog 13.06.13 Equality impact - HEFCE conducted initial impact assessment on SNC proposals, but it is unclear if a full equality impact assessment has been carried out on the actual events following implementation. HEFCE's initial sector impact assessment (updated January 2012) HEFCE's commitment to develop a monitoring mechanism on equality impact ECU report - Equitable admissions for underrepresented groups Forecast General increased risk of litigation, rise of complaints, etc. Challenges to UCAS policy around EU (non-UK) providers. Challenges to high grades policy around exclusion of EU qualifications. 9 Educational Current Risk of a new binary divide between the SNCs and the SNC-exempts. IPPR are suggesting exempting some WP students from SNC for some (selective) institutions. IPPR report - A critical path: securing the future of higher education in England quotation from David Willetts in THE 25.04.13 BIS SNC policy letter to HEFCE Risk of universities failing due to lack of numbers with consequent impacts on students and applicants. Telegraph article - Universities could go bust Policy Exchange report -sink or swim Early data suggests reductions in certain subject areas more pronounced than others. UUK The funding environment for universities (fig. 2.17 to 2.21) Unintended consequences of providing colleges with direct allocation puts strain on existing arrangements and resulted in claw-back of numbers to the parent university. Indications that some institutions are reversing the position in 2013. TES article - Shock as universities told to drop college franchises 12.03.10 Guardian article - HE in FE: top tips and resources to promote collaboration 09.02.12 Educational calendar of HE decision making (for applicants) out-of-step with institutions decision-making based on SNC policy change. Forecast Definition of success for universities needs to be reconsidered (e.g. institutions with no SNC but high non-SNC numbers). Policy approach has prompted some institutions, or departments within institutions, to consider qualifications equivalencies and occasionally review their entry requirements, perhaps with additional support provided / changes of teaching methods for some types of entrants. A Level and GCSE reforms - format unclear. OFQUAL information on qualification reform Guardian article - Michael Gove unveils GCSE reforms 11.06.13 Risk of unplaced applicants if revert to previous system. Pressure on the use of predicted grades in Schools. League tables of SNC shortfalls as a proxy indicator for popularity whereas it is as much an indicator of offer-making strategies and propensity to take risk. League tables of SNC shortfalls as a proxy indicator for popularity whereas it is as much an indicator of offer-making strategies and propensity to take risk. 10 Demographic Current Relatively little change in application rates from young entrants once effect of declining 18yr old population accounted for, although application rate still not quite at 2011 level. UCAS End of Cycle report 2012 HEPI report - Higher Education Supply and Demand to 2020 plus report on Demand for Higher Education to 2029 POLAR quintiles 1 & 2 seem least affected in terms of application rate (but too early to judge longer-term effect). Uncertain whether affect by enrolment is different to that for application/acceptance. UCAS End of Cycle report 2012 Independent Commission on Fees - Analysis of UCAS acceptances for 2012/2013 admissions Still additional non-participating individuals who would have been expected to go into HE (particularly higher POLAR quintiles and mature) - were they totally disengaged or temporarily displaced? UUK blog - University admissions 2012-13: more displacement than dip 02.10.12 Reduction in participation rate from mature students over 30yr old, even if rate 21-30 is staying relatively stable. There has been an even greater decline in part-time mature student applications and acceptances. UCAS End of Cycle report 2012 Independent Commission on Fees - Analysis of UCAS acceptances for 2012/2013 admissions Professor Claire Callender's keynote speech on the benefits of part-time study presented at the HEA conference What can higher education contribute to improving social mobility in the UK? Forecast Dip in 18yr-old group for a further seven years to 2020. HEPI report - Higher Education Supply and Demand to 2020 Potential for wider fluctuations of participation rates at particular institutions based on region and the number of competitors in a locale. HEPI report - Higher Education Supply and Demand to 2020 Liverpool Daily Post article - Unprecedented competition for places at Merseyside universities 05.07.12 THE article - Rural A-level students much less likely to go to university 20.06.13 Mature students participation rates may be liable to change. No real growth in student numbers, so any gains in particular institutions / parts of the sector is at the loss of other institutions / parts of the sector. Future potential applicants will be planning HE entry after 2012 changes introduced (rather than many current groups who were already committed to A Level syllabus) - this could affect future choices on applying to HE. 11 Suggestion for using STEEPLED analysis as part of an internal review Present NETT STEEPLED analysis to executive group, strategic planning or admissions committee (the clickable Powerpoint Show may be the best presentation format to use for this) Identify initial views on points to investigate further Remove any points that definitely do not apply or your institution Add any additional points relevant to your specific mission and strategic plan (these may relate to local and/or international issues) Consider any updates for 2014 (the HEFCE Board plan to confirm arrangements for 2014 in September 2013 and will publish them promptly) Establish a working group / sub-group to investigate the institutional impact of the identified influencers and develop action and contingency plans Ensure the working group has wide representation from all areas affected by SNC developments (this may include partners) Investigate the points under each influencer in more depth and rank them according to institutional impact (a simple risk analysis may suffice, ranking against a combination of likelihood and severity; although many providers may have a standard risk analysis process to follow) Consider scaling factors for any combination of points (e.g. if the risk is magnified by several points affecting one another). It may be expedient to have separate teams each working on a different influencer, but be mindful to co-ordinate scaling factors. Focusing on the highest ranking risks, examine your institutional resilience (e.g. through SWOT matrix; scenario testing; benchmarking) Where potential advantage is indicated, develop specific recommendations to further develop such potential, noting milestones/dates for implementing action. Where potential disadvantage is indicated, develop specific recommendations to counter, adapt or compensate for such detriment, noting plans for monitoring and reviewing any new measures. Develop a communication plan to ensure all relevant staff are aware of, and understand, SNC developments to a level appropriate to their admissions engagement (the NETT congruence survey and communication toolkits will aid targeting communication) . Report all strategic and operational recommendations to executive group, strategic planning or admissions committee with a clear implementation timeline proposed. Implement plans whilst mindful of any unintended consequences and bad practice from changes during the admissions cycle It may be prudent to empower a lead person to oversee and authorise action according to the plan. Ensure there is regular monitoring of events, so that action is always informed, and regular reporting, so that action is accountable. Review events at the end of the admissions cycle; update the STEEPLED analysis and plan accordingly. SPA would welcome any suggestions for amendments or additions. 12 S.T.E.E.P.L.E.D Analysis STEEPLED analysis is a means of conducting a scan of an organisation's external environment, with particular reference to the future and any changes that may come about. The purpose of STEEPLED is to identify factors that may impact on the services, customers (or Patients), products, markets, staff, profitability, etc. of the organisation. STEEPLED analysis should not be an activity reserved only for an annual or periodic special event. Managers should develop the habit of staying in tune with the environment and considering the impact on their organisation of everything that happens. P stands for political factors, including: E stands for economic factors including: Change of Government Policy Political parties Democratisation Legislation (see L) Privatisation Trades Union activity International relations Civil unrest Tax policy Change in GDP Disposable income of the people Stock market instability Currency fluctuations Economic cycles Energy and oil costs (milk and whey costs) Interest rates Housing costs Taxation S stands for social factors, including T stands for technology, including: Demographic change Family and lifestyle changes Education levels Health Life expectancy Changes in values and culture Social mobility Attitudes towards life and leisure Religious attitudes Speed of change in technology Computerisation Communications Industrial processes Materials Transport Medical innovation L stands for Legislation / Legal Current legislation in the home market Future legislation European/international legislation Regulatory bodies and processes Environmental regulations Employment law Consumer protection Industry-specific regulations Competitive regulations E stands for Environmental Ecological Environmental issues International National Local Environmental regulations Customer values Market values Stakeholder/ investor values Staff attitudes Management style Organisational culture Staff morale Staff engagement Global factors EU based factors 23, Old Windmill Way, Long Crendon Buckinghamshire, HP18 9BQ, England t:+44 (0) 1844 208802 e:info@malabarconsulting.co.uk Registered in England number 5195492 Additionally E for Ethics and D for Demographics are also often included. Sometimes people disagree over which 'heading' a potential factor falls under. However it matters less that you label the change than that you can see it coming. All these can affect your organisation, your services to your beneficiaries/clients and community, and the availability of skilled staff to provide the services and products. Consider all the STEEPLED factors facing your organisation. Select the one(s) in each category that you think demands the highest priority. Finally select the highest priority from among these. Factors affecting the Business Business Name: ...................................................... Your Name: ............................................. STEEPLED analysis Factor Comments The list above is just to get you started. Remember to put these, and others that you add in the context of your organisation or business. How might the factors listed affect the business? For example if you are a small private company the behaviours of large companies such as Sainsbury or BA or a large international player may well impact on you. If you are a local authority, government changes will change your priorities. In the NHS changes to treatments and public attitudes will also have an impact. Opportunity Impact Or Threat? What is the potential impact of these factors on your business? H - High M - Medium L - Low U- Undetermined I - Interesting to know Date: .................................. Implications and Importance Time Effect Importance Frame Time Frame: What is the likely effect on your business? S: 0-6 mths M: 6-12 mths L: 12-24 mths F: 24 + mths Positive Impact + Negative Impact - Unknown Impact ? Social 23, Old Windmill Way, Long Crendon Buckinghamshire, HP18 9BQ, England t:+44 (0) 1844 208802 e:info@malabarconsulting.co.uk Registered in England number 5195492 How important is this factor to your business? C- Critical I - Important N - Not important U - Unknown STEEPLED analysis Factor Technological Economic Comments Opportunity Impact Or Threat? Implications and Importance Time Effect Importance Frame STEEPLED analysis Factor Environmental Political Comments Opportunity Impact Or Threat? Implications and Importance Time Effect Importance Frame STEEPLED analysis Factor Legislation / Legal Ethical Comments Opportunity Impact Or Threat? Implications and Importance Time Effect Importance Frame STEEPLED analysis Factor Comments Opportunity Impact Or Threat? Implications and Importance Time Effect Importance Frame Demographics Add any other factors that you feel will impact your business now and in the future on additional pages. Case U.S. Restaurant Industry (SIC: 5812; or NAICS-2002: 7221) Project Tasks Please analyze the external environment of the U.S. restaurant industry based on the following six segments: Demographic, Economic, Political/Legal, Socio-Cultural, Technological, and Global. You will need to search in UHV library and other reliable sources from the Internet for data, reports, and other resources as references of your project report. We have already discussed those six segments of U.S. restaurant industry in the learning module 8's discussion board. You are encouraged to get hints from the discussion board, but please don't simply copy and paste. The outcome of your analysis is an essay with 6-8 pages (double-spaced, 12 pt \"Times New Roman\" font, 1-inch margins, excluding cover page, exhibits, and references) in \"Word\" or \"PDF\" format. The case analysis will be extremely helpful to your capstone case analysis in MGMT4309 (strategic management) class. Guideline and Requirements A. Read this whole document twice. B. Read the sample essay in the case project folder to get a rough idea about what to include and how to analyze. But keep in mind that you need to follow the length requirement specified in this document. C. Read the related book chapters AND the three documents provided in the case project folder. D. Structure: Your essay should include the following components: a. Cover page; b. Executive summary (less than one page); 1 c. Main body of analysis including the six segments. Read the structure guide in the project instructions. You need to follow that structure in your writing, but you can add more sections and details if you think necessary. d. Summary and integration (about one page) e. A reference list (with at least five entries). E. You need to do research on data and reports on the industry through UHV online library and the Internet. See the following section for details. F. Format: You need to follow APA writing style. Here is a guide for APA format: https://owl.english.purdue.edu/owl/resource/560/01/. G. Submission deadline: August 5th, mid-night. Some Important Data Sources A. We need external data, reports, and other resources to make our analysis a quality work. UHV Library (http://libguides.uhv.edu/c.php?g=155282&p=1019315; UHV account logon required.) offers more specific and proprietary research databases that are normally not publically available: One Source Global Business Browser; First Research - Mergent; Business Source Complete Business Insights Global Regional Business News Mergent Online LexisNexis Academic Hoover's Online B. Scholar.google.com, Google.com, and possibly Yahoo.com can give you a lot of information, but you need to verify the sources, only academic sources or those from serious trading journals can be trusted. C. If you want to narrow down your data search, you can get resources from scholar.google.com. Most of resources from that site are reliable. Detailed Instructions and Hints 1. Executive Summary Hints: A. Keep in mind that an ES is not an abstract. Many resources on how to write a good summary are available by searching on the Internet. B. Length suggestion: Half to one page (APA writing style) 2. Main body General Environmental Analysis 2 General Hints: A. Read the readings in the case study folder. Also refer to the sample essay for some hints. B. The structure of your analysis for each segment should be: a. A few sentences about what are the factors, in each segment, that may have significant impact on our industry and related industries. b. For each segment, please follow this sequence to analyze: 1) use a few sentences briefly describing all the factors that you think critical; 2) for each factor use 1-2 paragraphs discussing general relationship between the factor and our focal industry (and related industries), the trend of the factor (e.g., increasing/decreasing, more/less important, etc.); and then the expected resulting changes in our focal industry. c. Please start your analysis on those factors using \"the first factor in this segment is....\NOTE: This sample is excerpted from the capstone case analysis report of a winning team. The content may be copyright protected. You should not distribute this document without written consent from the instructor and the original authors. General Environmental Analysis On Electricity Services Industry Executive Summary General external environment analysis can cover a wide array of topics. The subjects covered above were deemed to be the critical factors that affect the industry. There are numerous other factors that also affect the industry but are too diverse to cover. The following will list some of the key subjects to remember from each segment. The demographic segment in electricity industries relies on the overall population count. Trends are showing a decrease in the growth rate of world population. Such decreases will lower the demand intensity for electricity than previous years. The economic segment's key driver is U.S. economic growth. U.S. Previous relationships between GDP and electricity demand have flipped. Electricity demand was normally double that of GDP until recently. Now electricity still relates to GDP directly, but that demand is substantially less than GDP. Another relationship is that the electricity industry accounts for millions of jobs in the U.S. Political and legal segment in the industry relies on emissions. Electricity production accounts for a majority of the countries' emissions. This means that the industry is prone to high regulations. Major regulation started in 1970 with the Clean Air Act and as expanded and grown since then. Currently, EPA is pushing for stricter regulations in previously built and future plants. The socio-cultural segment of the industry relies on the public's values and opinions. These values and opinions have changed over the years. Most of these influences are in regard to improving the environment and reducing emissions. They also control the use of nuclear energy in electricity production. The public still fears nuclear energy due to past disasters. Technological key drivers are technologies that have decreased the cost of renewable energy and increased the efficiency of electrical consumption devices. New breakthroughs have finally brought the cost down of renewable energy producing devices such as solar panels. Technology breakthroughs have also brought about higher efficiency devices such as fridges and light bulbs that reduce energy consumption. Overall technology is reducing the use of electricity. Last, the global segment drivers rely on the global demand of electricity. Trends show emerging market countries to have high increases in the demand of electricity, such as China. These countries are relying mostly on coal as it is the cheapest and easiest form of electricity production. OCED and member countries are pushing emerging markets to stop using coal due to its high emissions. General Environmental Analysis The focus of this general external environment will be the energy/electricity industry. The subjects covered are mostly on a domestic scale with the exception of a few international subjects. All segments of the analysis can be linked together and have overlapping aspects. After the last segment is covered, a general summary will be given including the relationship that will be described between the segments. The first external analysis segment covered will be the demographic segment. From there it will follow the graph above in a clockwise rotation. Demographic Segment Demographic factors are important influences on the electricity industries. One of the most important influences is the population in which the industries serve. Electricity consumption is worldwide on large scales as electricity is needed for almost everything from AC cooling to plant production. As the population increases, so does the demand of electricity. Trends from the 1800s in the United States showed major increases in population, as much as 35 percent increase from 1790 to 1800 (POP Culture: 1800, 2014). The population per square mile of land in 1800 was only 6.1 persons and has increased by 1,205 percent to 79.6 persons per square mile of land by 2000 (POP Culture: 1800, 2014). Electricity Consumption in the US shows similar increases in consumption with only 4,049 kilowatts an hour used in 1960 (The World Bank Group, 2015). The average demand in kilowatts an hour in 2000 had increased by 238 percent to 13,671 kWh with an overall output of 4 trillion kilowatts of power compared to only 799 billion kilowatts of power in 1960 (The World Bank Group, 2015). Therefore, such data shows that there is a direct relationship between the demand in population and electricity consumption. This relationship shows that as population grows, so does the demand for electricity. Future population data is showing a decline in the growth of population worldwide. Most of the decline is due to, \"An unexpected and dramatic decline in the birth rates of developing countries causing a drop in the world population\" (World Population growth rate down, 1978). Current United States population shows over 320 million people with a net gain of a person every 14 seconds (U.S. and World Population Clock, 2015). Future US projections are showing that these numbers will increase, with a decreasing rate. See Graph 3.1 below from the United States Census Bureau. 450,000 0.90 400,000 0.80 350,000 0.70 300,000 0.60 250,000 0.50 200,000 0.40 150,000 0.30 100,000 0.20 50,000 0.10 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 Population Growth Source: Population Projections, 2014) % Change 0.00 As shown from the Census Bureau, the percent change in the growth of population starts at almost 1% per year, but will most likely drop below .5% per year. At the same time, it is important to note that these increases are still large as the population is in the millions. The US expected population in 2015 will only see a .82% increase in population, but in actual numbers, that is over a 2 million increase in people, while year 2060 will be less than 2 million increase. Decreases in population expansion, \"is of major significance in the sense that it is the largest deceleration in population growth rates since independence\" (Tales the new Census Tells, 2011). Such leveling off of increases in populations could affect the demand of electricity as, \"Population growth affects energy use through increases in housing, commercial floor space, transportation, and economic activities\" (Market Trends: U.S. energy demand, 2014). Economic Segment Economic factors also play an important role in the electricity industries. There are a few drivers in the economic environment that stem locally. It is important to note that the majority of electricity production comes from coal and natural gas while nuclear, hydropower, and renewable sources only account for a small amount of production. Therefore, fossil fuels account for the majority of energy production in the United States. \"Crude Oil and natural gas are the main sources for energy in the US and around the world\" (Hassan & Nassar, 2013). Government trends show the use of fossil fuels has increased with the increased production of electricity since the 1950s (Primary Energy Production by Source 1949-2012, 2015). Natural gas is produced mostly in the U.S. because of its abundance, while the rest is imported from Canada (American Gas Association, 2001). Therefore economic activity such as growth and recessions will play a major impact on the productivity level of natural gas, thus, possibly affecting supply and prices of electricity, all else held constant. Electricity industries are also affected by U.S economic growth on a broader scale. Energy industries account for more than nine million jobs directly and indirectly (IHS CERA, 2012). Numerous studies show that electricity growth is directly related to economic growth. \"Electric intensity in the U.S. economy...is significantly related to general level of economic activity...\" (Rising Electricity Costs, 2006). Yet, these studies are possibly no longer valid as the relationship between economic growth and electricity demand is changing. Graph 3.2 shows the relationship between historical and projected U.S. economy and electricity demand. Historical trends show a direct relationship between U.S. GDP and electricity demand. More recently, this relationship has changed as the U.S. GDP has actually surpassed electricity demand and is expected to continue. The EIA states that short-term changes in economic output and electricity Graph 3.2 U.S. Electricity Consumption and Economic Growth Relationship Source: (U.S. economy and electricity demand growth are linked, 2013) demand are positively correlated, yet long-term trends are different (\"U.S. economy and electricity,\" 2013). The EIA suspects that the economy and electricity demand will still stay related, but the electricity demand, \"will be less than half the rate of economic growth\" (\"U.S. economy and electricity,\" 2013). The change in the relationship is due to many factors but specifically new policy standards and improved technology which will be discussed in other segments. It is important for energy industries to realize the importance of economic growth or recessions. The relationship has changed, but it is still positively correlated. Drops in economic growth could lower electricity use while economic growth could spur use of electricity. Political/Legal Segment Political and legal influences on the electricity industry have evolved over time. Some of the most major influences in electricity production come from laws and regulations concerning the emissions from the plants. This is mostly because the production of electricity produces a lot of emissions. Production actually accounts, \"for about 40% of the country's total carbon dioxide emissions...\" (Linn & Nathan, 2013). The US government stayed out of the regulation of energy markets until the 1930s and specifically in the 1970s (Doren, 2009). The first major energy regulation came into play as the Clean Air Act of 1970. \"The enactment of the Clean Air Act of 1970 resulted in a major shift in the federal government's role in air pollution control. This legislation authorized the development of comprehensive federal and state regulations to limit emissions...\" (History of the Clean Air Act, 2013). Part of the 1970 Clean Air Act was the creation of the well-known Environmental Protection Agency (History of the Clean Air Act, 2013). Throughout the years, the government has created amendments to the original act to increase regulations and standards. It is important to realize that different forms of electricity production produce different levels of pollution in the environment. The two most widely used forms of electricity production have two opposite environmental impacts as, \"Coal combustion is generally more carbon intensive than burning natural gas...coal accounts for 75% of CO2 emissions...\" (Sources of Greenhouse Gas Emissions, 2014). Therefore it is harder to obtain higher standards of lower emissions for coal power plants. Throughout the years, the government has created amendments to the original Clean Air Act to increasing regulations and standards yet, \"some important regulatory moves have been made, but the most significant steps are still in the future\" (Linn & Nathan, 2013). Current new proposals from the EPA are aimed at stricter regulation and reviews for new sources of energy with new projects having to show the \"best available control technology\" (Linn & Nathan, 2013). Therefore newer coal plants will be more expensive to build and operate compared to natural gas plants in the energy sector because of extensive government regulations on environmental emission as the , \"primary mechanism for the reduction will be tough emissions limits on coal-fired power plants\" (Electricity Prices Soar as Government Regulation Surges, 2013). This means there will be a push for more efficient means of production of electricity such as natural gas with low emissions. One recent policy push is the extended use of subsidizing. The US government creates incentive programs to bring down the costs or create tax breaks for consumers to deploy forms of renewable energy such as wind and solar (Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010, 2011). US subsidies have doubled from 2007 to 17.9 billion to 37.2 billion (\"Direct Federal Financial,\" 2011). These pushes for renewable energies are to gain independence from fossil fuel forms of energy production. Future programs and policies could essentially decrease the need for fossil fuel electricity plants. Energy industry deregulation is another trend that effects the industry. Deregulation allows customers to have their choice of electricity supplier. Deregulation has also allowed competition in the energy sector ultimately lowering the prices for consumers (Deregulation of Energy, 2014) According to Pentland, governments started deregulating the energy industry more than two decades ago (2013). Continuing deregulation will continue to create more competition. Socio-Cultural Segment The fourth segment in the analysis that will be covered is the socio-cultural of the general industry. Socio-cultural are general perceptions and values from the population that can influence change and demand in the industry. Publics' opinions and values can change over time and create different influences as research shows, \"the powerful role that human values play in shaping individuals' engagement with environmental issues\" (Corner, Markowitz, & Pidgeon, 2014). These values and opinions directly influence the energy industry as, \"Public attitudes to coalfired power plant or indeed any source of energy are important in shaping government policies. Such attitudes are also important in determining whether new coal projects can proceed\" (Fernando, 2006). Well before the Clean Air Act of 1970, major pollution issues had not yet been faced for public opinions and values to be formed. \"As cities became more populated towards the end of the 19th century, industrialized cities across Europe and the United States were experiencing a new kind of pollution: waste from industries and factories\" (Nonpoint Source Pollution, 2008). Not until the 1960s did the public become involved as, \"an environmental movement began to emerge that sought to stem the tide of pollutants flowing into the planet's ecosystems\" (A&E Television Networks, 2009). Past values and opinions have carried over to recent years and have grown stronger as, \"the substantial increase in public concern about global warming that has occurred in the U.S. in the last few years...caused an increasing amount of public opposition to new coal-fired power plants\" (U.S. Coal Politics, 2011). The public has had such a strong influence on the energy industry that they were actual able to block expanded energy production in Texas recently. \"Public outcry about air pollution blocked proposed coal-fired electricity plants in Dallas, Waco and Houston in the 2000s\" (Texas Workforce Commission, 2010). It is extremely important to note the importance of the public opinions and values regarding coal energy production. The public clearly does not support the use of coal plants due to the high levels of pollution. At the same time, the public's views on renewable energy and nuclear power also affect the consumption of coal energy. A recent survey showed that 90 percent of people polled would switch to a renewable energy if it cost the same (primary). Yet, if the cost of switching to a renewable energy cost more only 9 percent said they would switch. Therefore not only does public opinions for the environment play a role in energy production such as coal, so does the price of energy. Public opinion has also played a major role in expanding renewable sources of energy such as nuclear production. Public opinion of nuclear production has fluctuated frequently over the years. \"In the early days of nuclear power development, public attitudes toward the technology were highly favorable...\" (A Short History of Nuclear Regulation, 1946-1999, 2012). Yet opinion changed in the 1980s, \"after the Three Mile Island accident, public support had plummeted to 46 percent, and it dropped further to 34 percent after the 1986 Chernobyl accident\" (M. V., 2011). Years later after Three Mile Island and Chernobyl nuclear disasters, public opinion was slowly changing. \"Public attitudes toward nuclear energy were slow to rebound from the Three Mile Island and Chernobyl disasters, but the polls...had consistently found public support growing through the 1990s and 2000s. Just as momentum appeared to have shifted in favor of nuclear energy, the Fukushima disaster occurred, which caused support to shrink back\" (Stoutenborough, Sturgess, & Vedlitz, 2013). The Fukushima nuclear disaster happened on March of 2011 and since then, nuclear energy production has slowly regained support (World Nuclear Association, 2015). A recent study showed that 73 percent of people surveyed said they would consider switching to nuclear energy if given the choice (primary). Yet only 55 percent survey said they even worried about the safety of nuclear energy (primary). The future of nuclear energy will be decided by the public. Future disasters could stem more public opposition to nuclear energy expansion, and such circumstances are unknown. In summary, socio-culture is a key driver in the energy industry. The values and opinions of the public prefer clean and green methods to generate and consume electricity, yet they will also be reluctant to switch to renewable energy if the cost is higher. The future of nuclear energy is unstable as the public's opinion is constantly changing, mostly due to disasters that create fear. Renewable energy is a strong topic in the United States with most people wanting a more renewable source of energy. Yet, \"support for renewables declines as the public learns more about them, especially their costs, whereas people become less concerned about nuclear as they acquire more actual risk information\" (Greenberg, 2008). Future nuclear power plants could be blocked by safety concerns of public perceptions (Electric Power Generation, 2015). Technological Segment The technology behind the production of energy and the various ways energy is consumed has changed rapidly over the years. The first part of the technological segment will discuss the history and current technology behind the production of energy. The second half will discuss the technology revolution behind the consumption of energy. One of the first substances to create electricty in the United States was coal. The U.S. had its first commercial electricity plant in New York City \"in 1880, coal powered a steam engine attached to the world's first electric generator\" (Union of Concerned Scientists, n.d.). A year later hydroelectricity began in Appleton, Wisconsin in fast flowing rivers (Union of Concerned Scientists, n.d.). Nuclear energy became the new hype after World War II (Union of Concerned Scientists, n.d.). \"The first nuclear commercial plant, Dresden 1...was started in 1960 (World Nuclear Association, 2015). More recent technology pushes involve the use of renewable sources of energy such as wind, solar energy, tides, and geothermal energy (Overview of Alternative and Renewable Energy Sources, n.d.). Because of socio-cultural aspects, the public has made it clear that they do not want to rely on fossil fuel processes for energy production forever, \"emissions from these fossil fuels were doing enormous harm to the Earth's atmosphere....attention began to turn once again to sources of...modern renewable energy technology\" (Evans, 2011). Sources of renewable energy use to cost high initial amounts of investments such as solar panels, but recently have started to decline due to, \"reductions in nonmodule costs (which may include... inverters, mounting hardware, etc.)\" (Barbose, Darghouth, Weaver, & Wiser, 2013). Georgia Tech College has a special division aimed at solar energy research. There researchers are currently, \"...working to reduce cell-processing cost without compromising efficiency to make PV-generated electricity more competitive with other sources\" (Georgia Institute Technology, n.d.). Other renewable energies are seeing similar reductions as the, \"costs of renewable energy technologies have declined steadily, and are projected to drop even more\" (Union of Concerned Scientists, n.d.). A lot of new technology in solar panels has created a reduction in the initial cost of producing solar energy. Wind energy is another r