Strategic Analysis for Esty
Esty is the company
Scenario:
You are the director of strategy and business intelligence for your chosen organization. You are conducting an evaluation of your chosen company for an upcoming annual report. Your goal is to demonstrate skill and expertise in the evaluation of the strategic success of your organization. You will be submitting this report to C-level executives for review. In the future, you will use the results of your analyses to help make strategic business decisions. Use the following criteria to analyze the strategy of your organization.
Assignment Requirements: In this assignment, you will analyze the strategy of your chosen organization from the list provided by your instructor. Address each of the following inquiries in your deliverable:
Strategic Analysis Overview
Explain the many uses of strategic analysis tools for business purposes by supporting your perspectives with research resources.
Using research, explain the purpose of strategic analysis in the strategy evaluation, planning, and implementation processes.
Explain the differences between conducting internal analyses and external analyses in the strategic evaluation process.
Explain how strategic analysis tools can help your chosen organization build a future-oriented strategy.
Provide examples describing how internal analysis tools are used in the strategic evaluation, planning, and implementation process.
Provide examples describing how external analysis tools are used in the strategic evaluation, planning, and implementation process.
Analyzing the Internal Environment
Explain how your chosen organization can further analyze its resources and capabilities to gain a competitive edge over rivals.
Explain how a value chain analysis can help diagnose the success of your chosen organization.
Explain how the BCG growth matrix can help your chosen organization to allocate its resources in order to make it more competitive.
Explain the financial health of your chosen organization to inform strategic decision-making.
SWOT Analysis
Analyze an organization's strengths and weaknesses in consideration of market opportunities and external threats.
Analyze the strengths of your chosen organization to determine its resources, core competencies, and capabilities.
Analyze the weaknesses of your chosen organization to identify negative attributes and characteristics, improvements needed, resource scarcity, and any factors that may lead to failure.
Analyze current opportunities within the industry and marketplace that your chosen organization operates in.
Analyze the threats that might affect your chosen organization's ability to perform to the best of its competitive ability within its industry and the marketplace that it operates in.
Analyzing the Competitive Environment
Analyze the competitive environment of an organization using the five forces framework.
Explain the theory of the five forces framework and its value in diagnosing the competitive conditions in the industry of your chosen organization.
Conduct an analysis using the five forces framework to diagnose the competitive conditions in the industry of your chosen organization, including the following:
Analyze the rivalry among competing sellers of your chosen organization.
Analyze the competitive pressures associated with the threat of new entrants into the industry of your chosen organization.
Analyze the factors affecting competition from substitute products.
Analyze the factors affecting the bargaining power of suppliers.
Analyze the factors affecting the power of buyers.
Summarize the results of your five forces analysis by explaining how your chosen organization may be impacted within the next 5 years.
Analyzing the External Environment
Perform a PESTLE analysis to identify risks and threats in the external environment of an organization.
Explain the theory of the PESTLE analysis and its value in diagnosing conditions in the external environment of your chosen organization.
Conduct a PESTLE analysis and identify three strategically relevant factors per PESTLE component that may impact the long-term direction of your chosen organization, including its strategic vision and mission, objectives, and business model.
Summarize the results of your PESTLE analysis by explaining how your chosen organization may be impacted within the next 5 years.
Conclusions
Draw overall conclusions based on the various analyses you have conducted in this deliverable.
Explain how a comprehensive analysis of your chosen organization’s competitive situation can assist managers in making critical decisions about their next strategic moves.
Explain opportunities for growth and expansion within the industry of your chosen organization.
Explain risks in the external environment that may lead to divestment within the industry of your chosen organization.
APA Style
Correctly apply APA style to in-text citations.
Correctly apply APA style to references.
Writing Conventions
Use a minimum of three peer-reviewed, academic research resources (including MindTools and Library materials) to substantiate your critical thinking and to provide viable reasoning for your perspectives.
Use headings to segment the topics in your writing in order to create a flow of ideas for your reader.
Use diagrams, images, and charts to give context to your writing.
Use reasoning skills to support your statements, thoughts, opinions, and ideas.
Write in third person to develop your business report.
Strategic Tools
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Strategic Tools
As an online marketplace, Etsy offers a platform for buyers and sellers of handmade and vintage items, as well as craft supplies. To remain competitive and meet the needs of its customers, Etsy needs to conduct a strategic analysis to evaluate its current performance and plan accordingly. The strategic analysis involves the assessment of internal and external factors to provide insight that can be used to inform the organization’s strategic planning and implementation processes (Aithal, 2016). The internal analysis focuses on evaluating the organization’s resources and capabilities, such as its financial performance, human capital, and operational processes. External analysis, on the other hand, evaluates factors outside of the organization’s control, such as market trends, regulatory changes, and competition.
Strategic analysis tools such as SWOT analysis can help Etsy build a future-oriented strategy by providing a structured approach to evaluating its internal and external environment (Benzaghta et al., 2021). Internal analysis tools such as the value chain analysis can be used to identify areas where Etsy can improve its operations and gain a competitive edge. External analysis tools such as Porter’s five forces can be used to evaluate the competitive landscape and identify potential threats to Etsy’s market position. By using these tools, Etsy can gain a competitive edge and ensure its long-term success in the marketplace.
Analyzing the Internal Environment
One way for Etsy to analyze its resources and capabilities is to conduct a resource-based analysis, which examines the unique resources and capabilities that the company possesses and how these can be leveraged for competitive advantage. The process involves identifying the company's core competencies and strengths and determining how these can be used to create value for customers and differentiate the company from its competitors. A SWOT analysis can also help the company identify its internal strengths and weaknesses as well as external opportunities and threats (Benzaghta et al., 2021). By focusing on its strengths and addressing its weaknesses, Etsy can improve its competitive position.
Further, a value chain analysis can help Etsy diagnose the success of its operations by examining the company's value chain and identifying areas where value can be added or costs can be reduced. This involves analyzing the company's inbound logistics, operations, outbound logistics, marketing and sales, and service activities (Khan, Alam, & Alam, 2015). Using the BCG matrix, Etsy can expand its competitive advantage as its findings inform resources allocation. The matrix places the company's business units into one of four categories: cash cows, dogs, question marks, and stars (Khan, Alam, & Alam, 2015). The four categories make it easy for an organization to determine the profitability of its business units with the cash cows being the most profitable and question marks being the least profitable. Etsy can maximize its growth potential and competitive position by making sure that available resources are directed towards the most profitable products and services.
In addition, Etsy's financial health can inform strategic decision-making by generating insights into the company's profitability, liquidity, and solvency. By analyzing financial statements such as the balance sheet, income statement, and cash flow statement, the company can determine its financial strengths and weaknesses and make informed decisions about investing in growth opportunities, managing costs, and optimizing its capital structure (Khan, Alam, & Alam, 2015). Additionally, financial analysis can help the company identify potential risks and challenges, such as cash flow constraints, debt obligations, and market volatility, that may limit the ability to achieve strategic objectives.
SWOT Analysis of Etsy
Notably, the company has several strengths that have enabled it to remain competitive in the market. Etsy has established a strong brand name in the e-commerce industry, which has helped it gain a large and loyal customer base. Also, the company offers a wide range of products that provide customers with a unique shopping experience and keeps them coming back. Etsy has further managed to establish a strong community of sellers and buyers who support each other. Etsy's platform is easy to use and navigate, which provides a seamless shopping experience for customers and makes it easier for sellers to manage their businesses. The company also benefits from its global operations, which provide it with a larger market and more opportunities for growth.
However, there are several weaknesses that the company should seek to address. Etsy charges fees for each item sold, which can deter some sellers and lead them to look for alternative platforms to sell their products. Also, the company’s business model is primarily focused on small-scale sellers, which limits its ability to compete with larger e-commerce platforms that offer a wider range of products and services. Etsy also heavily relies on third-party payment processors, which can be a risk factor if these processors experience technical issues or security breaches. The company’s heavy dependence on individual sellers could also negatively impact the company if the sellers do not produce high-quality products or provide good customer service.
Etsy can leverage several opportunities in its external environment. With growing awareness about environmental issues, there is an increasing demand for sustainable and eco-friendly products. Etsy can capitalize on this trend by featuring m...