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Environmental Analysis :Skyline Chili

Environmental Analysis Paper

MBA580

University of Phoenix

April 26, 2008

Environmental Analysis Paper

The environmental analysis done before a company opens its doors to the public is vital to the company’s success in the future. Forecasting is essential when making the business plan to present to prospective partners and financial institutions for approval for financing and making sure that all rules and regulations are followed at the local, state and federal level are necessary. Skyline Chili established in Cincinnati, OH in 1949 has gradually spread throughout the Midwestern region of the United States over the past 59 years. The company is now looking to expand to the southeastern region of the U.S. for the company to succeed in the southeast, Skyline Chili will need to do an environmental scan of the area looking at all of the issues and opportunities that the southeast has to offer.
Forces and Trends
One of the remote forces that will affect the success of Skyline Chili in the southeast will be to find financing for the start up of a new location. Each Skyline Chili is part of a franchise, and each franchise owner is responsible for start up for the store.
Lending to small businesses is seen as a more risky move for a bank than lending to a large firm.
“Small businesses are much more susceptible to swings in the economy and have a much higher failure rate than larger operations. Historically, lenders have had difficulty determining the creditworthiness of small business loan applicants. As noted, small businesses are extremely diverse--they range from small corner grocery stores to professional practices to small manufacturers. This heterogeneity, together with widely varying uses of the borrowed funds, has impeded the development of general standards for assessing small business loan applications and has made evaluating such loans less straightforward and relatively expensive” (Board of Governors of the Federal Reserve System, 1996)....