Scenario: Let's say we have a company who is making female hygiene items more access to women and girls in developing countries. The sourcing for these items come from banana leaves that are refined and then converted in things like feminine pads. If a disease broke out and affected tree leaf proliferation and health this would be an example of a conflict within the external environments. If the tree population bounced back, but a new company who also wanted to join the feminine hygiene market emerged and impeded on your collaboration with the sourcing farm that retrieves the banana leaves for you. This would be affect the internal environment.

I'll talk about two positive changes to the internal and external environment (strengths and opportunities). An orthopedic implant company is selling a titanium hip stem in the United States. During a business acquisition, the company acquired a Metal Injection Molding (MIM) cell. This is a great asset since it can produce large product quantities in a short amount of time, is cost and material-effective, and has a great level of precision in forming complex shapes. This is an example of positive change to the internal environment, a new strength of the company. They can meet their inventory needs at a lower cost as well as require less material per part (since there is less material waste in general with MIM).

Additionally, in this scenario, a branch of a company producing titanium alloys has opened up in the same state as the orthopedic implant company. Titanium is currently outsourced from overseas, where transportation and production costs are hefty. From research, the marketing team is aware that this is a well established and trusted company. This is a new opportunity for potential cost reduction in production and transportation of the material for the company's hip stem. This is an example of a positive change in the external environment, an opportunity. After many hoops have been jumped through, this has the potential to reduce costs in obtaining the material for the hip stem.

A medical device company based in Florida launches a novel commercial IUD with a biodegradable polymer coating. The company had hired subject matter experts on polymers to consult on the IUD development. Their expertise contributed to the final design in which the polymer alleviates typical copper IUD side effects. The IUD has been on the market for 5 years; it has shown great financial success due to overwhelming customer satisfaction. This is an example of a positive impact by the internal environment on the company’s market performance. However, a new Florida state legislature has recently been enacted limiting access to certain reproductive healthcare. It enables healthcare professionals and institutions to refuse their patients contraceptives without any legal or financial consequences. Thus, many hospitals and private practices in Florida halt their purchase of IUDs, including the company’s new IUD. This vastly cuts the local profits the company was making; this is an example of the external environment negatively impacting a company.

A recent example of an external environment factor affecting companies is the CrowdStrike incident earlier this year. This was a major external event in the cybersecurity space, where several organizations were affected by a new strain of ransomware. This external environment event forced many companies to lose production time (causing delays in their sales and many took a hit in terms of money as well). The attack brought to light the vulnerabilities companies face from external threats, especially as digital systems are integral to business operations.

Internally, many implemented significant system changes to modernize their systems and/or mitigate risk. These types of system changes are a prime example of the internal environment, as they reflect a company’s response to external pressures and the need to improve internal processes. In the company, many people are excited for these new changes and some companies have a launch party when new systems are implemented, causing high energy and motivation. This can increase pride and unity in the company culture.

A great real-world example to look at is the COVID-19 vaccine. If you look specifically at Moderna. who is known for their mRNA technology, both their internal and external environments affected decisions significantly.

Internally, Moderna worked closely with scientist and public health officials to develop their vaccine. This helped them guarantee the vaccine met all of the rigorous safety and efficacy standards. The collaboration was a crucial factor for rapidly advancing the research and development process. At the same time, competition from other pharmaceutical companies, like Pfizer and Johnson & Johnson, made a need for Moderna to differentiate its product through faster development and robust clinical trial to gain a greater market share.

Externally, there were significant regulatory challenges, specifically from the FDA. In order for Moderna to gain the Emergency Use Authorization (EUA), they had to undergo extensive trials and data reviews. Navigating this process correctly was critical for the vaccine to get to the market quickly. Also, economic factors played an increased role in the production of this vaccine. The high demand from government officials, and the general public alike, created a favorable environment for rapid vaccine development and deployment.

The strong collaboration led to a highly effective vaccine while the understanding of the competition required them to focus on speed and innovation to get to the market quickly. The regulatory challenges posed many risks, like the timeline of the release, but the immediate need to for a vaccine and public strengthened Moderna's position in the market.