BITCOIN

1. Using the strategic frameworks to assess the business environment and strategic environment for one or more companies that you know (I expect that you will use the company that you used for your assignment)?

Analysis of Bitcoin and Traditional Monetary System using Porter’s Five Forces Model. According to Schermerhorn, the five forces model entails tough competition and intensive rivalry among firms in the industry that may lead to significant implications.

The strength of Porter’s five forces may be changed over time as industry conditions transform. The task facing organizational managers is to recognize how these changes in the model’s force give rise to new threats and opportunities and to formulate appropriate strategic responses.

New entrant in the market entails the threats of new competitors entering the market. Over a long period, the traditional monetary system has dominated the monetary market whereby the central banking system has served an important role in the banking industry.

The supplier in relation to Porter’s Five Force model entails the bargaining power from different avenues. It forms the agencies that input the currencies into this system. In addition, customers in this model form the bargaining power of buyers. They provide an avenue for opportunities that these two monetary systems are competing to gain.

The traditional monetary system is the world’s most profitable currency industry. Suppliers of this industry are typically plentiful and not differentiated. They include employers, organizations, and institutions among others.

New entrants into the industry are a threat due to the technological implications that they possess. Technological advancements have facilitated new entrants that come in with a new technology standard approach.

PESTEL Analysis of Bitcoin in relation to Traditional Monetary system. Political analysis entails the support that a given innovation receives from the highest possible level in the government or the regulatory body. This is an opportunity in its making. The political environment has provided an environment that allows for good performance of business through formulation of policies and regulations for the industry. Through regulatory bodies, incorporation of firms is enhanced while their competitive behavior is also regulated. It is clear that the political environment supports the operation of Bitcoin and other companies in the industry.

The economic analysis is based on the significance that the project or innovation has in monetary terms. First, it is important to note that the business environment is affected by the economic performance of the country.

Socio-cultural entails the impact that the project will have to the society. Technological underpinnings refer to the parameters that have been employed in order to formulate such an idea or concept. Legality is the backing that the government ascertains a project, and environmental is the compliance with the concept of sustainability.

However, the threat over the implications of this technology in the monetary system is the legitimacy of transactions over the internet. Therefore, internet security is a matter of concern for firms that allow such transactions to take place.

PESTEL analysis is used to distinguish forces in the macro-environment that are currently affecting business, and the ones that are likely to affect it in the future. The key to PESTEL is the identification of few relevant factors that are likely to have a significant effect on the industry and the organization. The implications of this analysis are used to inform the environmental analysis.

SWOT analysis is a technique for focusing of an individual’s or a group’s attention on strengths, weaknesses, opportunities or threats. It is useful because strengths and weaknesses can be the cause of potential future risks. A SWOT analysis brings together the results of both internal company assessment and the external environmental one. The internal analysis helps in the identification of the strengths and weakness in the firm. External analysis highlights the opportunities and threats available in the firm. Beneficial and common applications of SWOT are gaining a greater understanding and perspicacity into competitors and market position. This process involves discussion among the key managers in the business. Therefore, the opportunity in this case is the discussions held by various stakeholders in the Bitcoin firm.

2. Evaluating the PESTEL framework and Five Forces models?

Porter’s Five Competitive Forces is one of the most powerful tools created to understand where power lies outside your organization and what might impact the future of your business. The more competitive the environment, the less likely you are to make money from it. Use this tool if you want to assess your market’s profitability or if you want to find new opportunities of entering into profitable markets.

This analysis assumes that there are 5 relevant forces that shape industry competition:

• New Entrants: How big is the threat to see new players entering the market?
• Suppliers: How strong is the bargaining power of your suppliers?
• Buyers: How strong is the bargaining power of your customers?
• Substitutes: How easy is it for competitors to substitute your product or service?
• Rivalry among existing competitors: How competitive is your industry?

Keeping this analysis in mind, you can you find new markets with few competitive forces so that you can maximize profits and opportunities.

PESTEL helps you analyze changes in the landscape that might affect your decision making for the future and to identify where advantages in the future might exist.

PESTEL is an acronym that stands for:

• Political,
• Economic,
• Socio-Cultural
• Technological
• Legal
• Environmental factors.

For example, an external factor for an import/export company would be the currency rates between the countries, which is an economic factor. A non-profit organization looking at prospective changes in government to determine their funding in the future would be a political factor. A retail company looking at changes in technology to determine how they can improve their point of sale system as well as changes in customer preferences to determine future stock would be a socio-cultural factor. Use this framework to see the main trends in your business environment and unveil opportunities and threats for the future. 

3. Assessing the role of Public-Private Partnerships in Kazakhstan and / or other countries?

Kazakhstan has yet to see public-private cooperation result in the implementation of socially important projects in transport, power, municipal services and social infrastructure – the sectors the Government is traditionally responsible for. The state has yet to structure projects with a balanced allocation of risks and rewards, costs and benefits or rights and obligations.

The participants of the Round Table discussed three of the key aspects of PPP development in Kazakhstan, namely: availability payment, bankability elements, and latest legislative initiatives.

With regard to availability payments, the participants of the Roundtable came to the following conclusions:

• To support the intentions of the Government to introduce availability payments as one of the most promising mechanisms of state support capable of providing a fair balance between the interests of private investors and the state.
• To note that careful articulation of the project goals, their study and the high-quality tender process will be fundamental to the successful implementation of availability payments in a wide variety of transport, power, utility and social infrastructure projects.

With regard to ensuring the ban financing of the projects, the participants of the Roundtable have come to the following conclusions:

• To support the intention of the Government to introduce legislative changes allowing pledging of project assets to financing organizations.
• To note that local banks, due to the nature of their funding sources and high interest rates, in the near future are unlikely to provide local currency financing in the required volumes.

With regard to the legal issues of structuring PPP in Kazakhstan, the Roundtable participants came to the following conclusions:

• The legislative environment for governing PPP type relationships is the key reason for the reluctance of the private sector to invest the time and resources in infrastructure and social projects in Kazakhstan.
• The draft law on new forms of PPP in Kazakhstan has the potential to shift the legal field for structuring and implementing projects to a new level.