Question

This week we are studying the External Environment as a critical part of developing strategy. A PESTEL Analysis is one of the major tools you use in studying the external environment.

STEP 1 - Please perform a quick PESTEL Analysis and determine what the biggest risk is to each company. Your task is to determine the biggest PESTEL risk to each company and not necessarily a comprehensive analysis.

STEP 2 - You have $1 million to invest in these companies. You can invest in one, two or even all of them. Which ones would you invest in? How much of the $1,000,000 would you invest? You must hold the investment(s) for five years.

Analyzing the External Environment with PESTEL

This week we are studying the External Environment as a critical part of developing a strategy. A PESTEL Analysis is one of the major tools you use in studying the external environment.

STEP 1
Please perform a quick PESTEL Analysis and determine what the biggest risk is to each company. Your task is to determine the biggest PESTEL risk to each company –and not necessarily a comprehensive analysis.

STEP 2
You have $1 million to invest in these companies. You can invest in one, two or even all of them. Which ones would you invest in? How much of the $1,000,000 would you invest? You must hold the investment(s) for five years.

Alibaba Group Holding Limited is a publicly traded Hangzhou-based group of Internet-based e-commerce businesses, including business-to-business online web portals, online retail and payment services, a shopping search engine and data-centric cloud computing services. In 2012, two of Alibaba’sportals handled 1.1 trillion yuan ($170 billion) in sales. The company primarily operates in China, and at closing time, on the date of its historic IPO, 19 September 2014, Alibaba's market value was measured as US$231 billion. The group began in 1999 when Jack Ma founded the website Alibaba.com, a business-to-business portal to connect Chinese manufacturers with overseas buyers.

Alibaba's consumer-to-consumer portal Taobao, similar to eBay, features nearly a billion products and is one of the 20 most-visited websites globally. The Group's websites accounted for over 60% of the parcels delivered in China by March 2013, and 80% of the nation's online sales by September 2014. Alipay, an online payment escrow service, accounts for roughly half of all online payment transactions within China.

Conagra Brands Inc. is an American packaged foods company headquartered in Chicago, Illinois. ConAgra makes and sells products under various brand names that are available in supermarkets, restaurants, and food service establishments. ConAgra was founded in 1919 and in 1940, the company began producing flour at its own mill. It created the Duncan Hines brand of cake mixes in 1951 as a way to market more flour. It is currently the third largest flour miller in the U.S. ConAgra produces a wide array of food products including cooking oil, frozen dinners, hot cocoa, hot dogs, peanut butter and many others. Some of ConAgra's major brands include Hunt's, Healthy Choice, Marie Callender's, Orville Redenbacher's, Slim Jim, Egg Beaters, Hebrew National, P.F. Chang's Home Menu and Bertolli.

Cumulus Media Networks is an American radio network owned and operated by Cumulus Media. It controls many of the radio assets formerly belonging to the American Broadcasting Company (ABC), which was broken up in 2007; Cumulus owns the portion of the network that was purchased by Citadel Broadcasting that year. The network adopted its current name in September 2011, following Cumulus's acquisition of Citadel; prior to this, it had been known as Citadel Media Networks since April 2009, after licensing the "ABC Radio Networks" name from The Walt Disney Company for nearly two years. The company is helmed by two radio executives from Atlanta. Prominent hosts carried by Cumulus Media Networks include Don Imus, Geraldo Rivera, Mike Huckabee, Mark Levin, Michael Savage, Jim Brickman, Adam Bomb, Kix Brooks (American Country Countdown), and Tom Kent.

Kaplan, Inc. is a for-profit corporation headquartered in New York City and was founded in 1938 by Stanley Kaplan. Kaplan provides higher education programs, professional training courses, test preparation materials, and other services for various levels of education. It is a wholly owned subsidiary of Graham Holdings Company, formerly known as The Washington Post Company.

Kaplan Higher Education is a group of institutions that offer classroom and online certificate and degree programs in fields such as criminal justice, health care, business, information technology, and legal studies. Iowa College Acquisition Corporation, operating under the Kaplan University brand, also offers online programs. At year-end 2013, Kaplan Higher Education had approximately 60,300 students enrolled. Kaplan Professional offers education for licensing, certification, and training purposes, in areas including accounting, insurance, securities, real estate, financial planning, information technology, and architecture. Established in 1938, Kaplan Test Prep sells preparation materials for standardized tests through tutoring, on-site classes, asynchronous and live programs, print books, and digital products. With programs for individuals, schools, and businesses, Kaplan Test Prep offers preparation for more than 90 standardized tests.

VTB Bank is one of the leading universal banks of Russia. VTB Bank and its subsidiaries form a leading Russian financial group – VTB Group, offering a wide range of banking services and products in Russia, CIS, Europe, Asia, Africa, and the U.S. The Group’s largest subsidiaries in Russia are VTB24, Bank of Moscow, and TransCreditBank. VTB was ranked 236th on the FT Global 500 2011, The Financial Times’ annual snapshot of the world's largest companies. It climbed to 82nd in the ranking of the 500 largest companies in Europe, the FT Europe 500 2011, and to 38th in the FT Emerging 500 2011, the list of the 500 largest companies on the world’s emerging markets. The Moscow-based bank is registered in St. Petersburg and came 65th in the British magazine The Banker’s Top 1000 World Banks in terms of capital in 2010.

Wyndham Worldwide Corporation headquartered in Parsippany-Troy Hills, New Jersey, operates several hotel brands across the world. Wyndham Hotel Group offers brands in lodging franchising, vacation ownership, vacation rentals, and vacation exchange. It is composed of nearly 7,400 hotels under 15 brands spanning 66 countries in six continents, competing in brand markets ranging from economy to upscale. In 2008 it purchased US Franchise Systems, Inc., owner of the Microtel and Hawthorn Suites brands.

Its brands include Days Inn, Dolce, Hawthorn Suites, Knights Inn, Microtel Inn & Suites, Ramada, Super 8, Travelodge, Wyndham Hotels & Resorts, and Wyndham Grand Collection. It reported 2015 revenue of $5.5 Billion and is listed on the NYSE (WYN)

ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation) is a Chinese multinational telecommunications equipment and systems company headquartered in Shenzhen, China. It is the world's fourth-largest mobile phone manufacturer. It also offers products that provide value-added services, such as video on demand and streaming media. ZTE primarily sells products under its own name but it is also an OEM.

With the evolution of the mobile industry, ZTE has grown significantly in its handset business and ranked No. 4 for both mobile phone and smartphone domains as of Q2 2013. And ZTE won the 5th place in U.S. smartphone market.

Answer 1

Alibaba Group Holding Company Ltd

• Political:Local political unrest, Government policies
• Economical: Fluctuation in global commodity prices, stock market shocks
• Social: Social fabric in the country
• Legal: Legally weak protectionism
• Environmental: None
• Technological: Future technologies which can make the existing one obsolete

Biggest Risk: Political unrest in the country

Conagra Brands Inc.

• Political: Political uncertainty
• Economical: Protectionism and a Trade wars
• Social: Changing habits of consumption
• Legal: Regulatory risk
• Environmental: Risk of a new policy on environment
• Technology:None

Biggest risk: Economical

Cumulus Media Network

• Political: Political uncertainty
• Economical: Protectionism  
• Social: Changing habits of radio listening
• Legal: Regulatory risk
• Environmental: None
• Technology:Future technologies which can make the existing one obsolete

Biggest risk: Changing habits of radio listening

Kaplan

• Political: Political uncertainty
• Economical: Protectionism  
• Social: Changing habits of book reading
• Legal: Regulatory risk
• Environmental: None
• Technology:Future technologies which can make the existing one obsolete

Biggest Risk: Future technologies which can make the existing one obsolete

VTB Bank

• Political: Unstable political picture
• Economical: Low investment climate
• Social: Low productivity level
• Legal: Regulatory risk for Banks
• Environmental: None
• Technology:Future technologies

Biggest Risk : Unstable political picture

Wyndham Worldwide Corporation

• Political: Political uncertainty
• Economical: Trade wars  
• Social: Changing habits of hotel stay such as AirBnB
• Legal: Regulatory risk for Hotel
• Environmental: Hazards from Hotels and policy on it
• Technology:Future technologies

Biggest risk: Changing habits of hotel stay such as AirBnB

ZTE Corporation

• Political:Local political unrest, Government policies, International  political risk
• Economical: Trade barriers created by other countries
• Social: None
• Legal: Legally weak protectionism in China
• Environmental: Health hazards
• Technological: Future technologies which can make the existing one obsolete

Biggest Risk :  Trade barriers created by other countries

Company	Market Cap	Biggest Political Risk
Alibaba	US$231 billion	Political unrest in the country
Conagra	Not given	Economical
Cumulus	Not given	Changing habits of radio listening
Kaplan	Not given	Future technologies
VTB Bank	Not given	Unstable political picture
Wyndham	Not given	Changing habits of hotel stay
ZTE	Not given	Trade Barriers

Based on the information provided, I would invest $1 million in Alibaba Group.