J&j Electrical External Analysis
Assignment #2 J&J External
In reading the J&J Electrical case study, I have completed an external analysis that includes both a general environmental and a industry assessment below. First I will do an external environmental analysis and second I will analyze Porter’s Five Forces for the company. Finally, I will give an industry assessment on J&J Electrical.
External Environmental Analysis
Political:
“The Energy Policy Act of 2005 provided tax incentives to individuals who installed energy-conservation equipment in their homes, including energy-efficient appliances and heating and cooling equipment, and who utilized alternative-energy sources such a solar and wind power.”
State and local governments passed legislation to “address the deficiencies in older buildings.”
The state mandated the old hospitals build seismic compliance by 2010.
Economical:
Recession of the early 2000s saw a major decline in commercial industrial new building. During this time residential construction saw a high increase.
Housing costs increased and many people were renovating their homes instead of buying new homes.
“Energy costs and metal prices increased which plagued construction. Crude oil closed above $70 per barrel for the first time in history. As well, Copper traded at $5490 per metric ton with a 25% increase.”
Sociocultural:
The Recession during the early 2000s impacted the electrical contracting industry.
Due to high prices for new homes, people renovated their homes.
Cities were turning low-occupancy areas into residential areas.
Technology:
During the Recession, “electricians branched into systems work, which included low-voltage applications such as voice-data-communication and alarm systems.”
Lack of investment in exploration and production of precious metals.
“Energy-conservation equipment in homes included energy-efficient appliances and heating and cooling equipment, and alternative-energy sources such a solar and wind power.”
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Porter’s Five Forces
Threat of Potential Entry:
New entrants is a weak threat to the electrical contracting market. Due to external factors like high cost of entry, high economies of scale, and high cost of brand development, the force of new entrants is minimal. Potential firms aspiring