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External and Internal Environmental Analysis Essay

An external and internal environment scan is necessary in developing a strategic plan for an organization. Longmont Housing Authority (LHA) needs to assess their internal and external environment to see a full view of their strengths, weaknesses, opportunities, threats, and trends. In this paper, an internal and external competitive environmental scan for Longmont Housing Authority will be performed. An analysis of the most important external environmental factor in the remote, industry, and external operating environments is included. The most important internal strengths and weaknesses of the organization will be identified. It includes an assessment of the organization’s resources. Finally, the organization’s competitive position and possibilities will be assessed.

External Environment Scan

The strategic management model shows the external environment as three interactive segments: the remote, industry, and operating environments (Pearce & Robinson, 2011, p. 13). Economic, social, political, technological, ecological, and international environments affect how LHA formulates their strategic plans. In the economic environment, the company is affected by inflation, interest rates, population, and so on. The threat of depressed economy is always a factor in the success of Longmont Housing Authority. Their processes and strategies can be modified to fit the changes in the economy. Due to the changes in social factors such as beliefs, opinions, lifestyle, and preferences, the company can see the underlying trends, threats, and opportunities. An increase in population in Boulder County increases the demand for affordable housing. This is an opportunity that is open for LHA as they continue to do grow and development their organization.

The increased threat of a growing population and lack of affordable housing is an opportunity for the organization to find potential funding sources to expand their portfolio. Their new project is due to break ground next month. This is a 62 unit affordable housing for seniors. Flood victims will have priority on the waitlist for this property, due to the fact that the majority of the funding for this project came from a state flood recovery program. The increasing population is also a good opportunity for the organization because they will be able to justify the need for future housing projects that will be desperately needed in the future.

Factors that more directly influence a firm’s prospects originate in the environment of its industry, including entry barriers, competitor rivalry, the availability of substitutes, and the bargaining power of buyers and suppliers (Pearce & Robinson, 2011, p. 110). However, LHA does not have to face tough competition in the housing industry. They are threatened by the threats of funding being pulled by Housing of Urban Development (HUD) or other private investors, who may find affordable housing an investment risk.

Internal Environment Scan

The organization has been gaining competitive advantages since their launch in 2014 of bringing the property management in house, opposed to hiring a 3rd party to handle the property management. These changes have improved staff development, improved agency financial stability, has streamlined processes, and as a result, they have developed effective policies.

Because there is such a demand for affordable housing and very few investors wanting to get involved in this industry there is not much competition. LHA has been able to develop good working partnership with other Longmont agencies, to include the senior center, the police department, city council, Mental Health Partners, and other non-profits that assist the homeless and low income population.

LHA’s Competitive Position and Possibilities

Longmont Housing Authority is in a good competitive position due to the mentioned strengths and opportunities in the internal and external environment scan. It is highly possible that they will continue to lead in the affordable housing industry because of the focus they are providing to research and development. They can also avoid the threats and eliminate competition by having experienced staff, and focusing on employee development.

Conclusion

Longmont Housing Authority is affected by the external and internal environment factors. Their strengths include their property portfolio (product) and processes. They are investing in development and they have a couple major housing projects in the works. They are threatened in the industry because of the threat of lack of funding and strict government regulations. If they will continue to push their initiative in discovering new ways to fund their projects, they can maintain or even improve their current performance.

References
Pearce, J. A., II, & Robinson, R. B. (2011). Strategic management: Formulation, implementation, and control (12th ed.). Boston, MA: McGraw-Hill/Irwin. The Longmont Housing Authority. (2014). Retrieved from http://longmontha.com/


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