Strategic reference point theory suggests that when companies are performing better than their strategic reference points, top management will typically choose a risk-averse strategy. When performance is below strategic reference points, risk-seeking strategies are more likely to be chosen. A situational analysis, also called a SWOT analysis is an assessment of the strengths and weaknesses in the organization's internal environment as well as the opportunities and threats in its external environment. A situational analysis can provide data for the strategy-making process.
•Choose a company to research. Some choices might include Apple, Google, Redbox, or Netflix. Conduct some basic Internet or other research about the company. Assess the company's strengths, weaknesses, opportunities, and threats. Identify steps they took in the strategy making process as well as at which level each decision was made.