Strategic Report: Internal & External Analysis of Seagate Technology

This report provides an in-depth analysis of Seagate Technology, a prominent computer storage provider. It includes an internal and external environmental analysis using SWOT and PESTEL frameworks, assessing the remote, operating, and industry environments. The report identifies Seagate's strengths, weaknesses, opportunities, and threats, along with political, economic, social, technological, environmental, and legal factors influencing the company. Furthermore, it evaluates Seagate's resource profile, covering physical, financial, and human resources. The analysis suggests that Seagate should capitalize on online channels to expand its customer base and address threats to ensure business sustainability. Desklib offers a wealth of similar solved assignments and resources for students.

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Seagate Technology
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1SEAGATE TECHNOLOGY
Executive summary
The main purpose of this study is to conduct an internal and external environment analysis of
Seagate Technology. Moreover, the study also conducts a resource profile analysis of the same
company. The study finds that Seagate is an established and most reputed name in the computer
storage service providing industry. The study, however, recommends the company to enhance its
existence over online channels. This can be helpful in attracting new customers.

2SEAGATE TECHNOLOGY
Table of Contents
1. Introduction..................................................................................................................................3
2. Internal and external environment analysis.................................................................................3
2.1 Remote Environment.............................................................................................................3
2.2 Operating Environment.........................................................................................................6
2.3 Industry Environment............................................................................................................8
3. Assessing the resource profile.....................................................................................................8
4. Conclusion.................................................................................................................................11
References......................................................................................................................................12

3SEAGATE TECHNOLOGY
1. Introduction
Seagate Technology is a California based technology company, which mainly makes
products to support the computer storage. The company was founded 39 years ago in 1979 by
Alan Shugart, Doug Mahon, Tom Mitchell and Finis Conner (Seagate.com, 2019). The company
makes hybrid drives, hard disk drives and solid-state drives. The number of employees is close to
41,000 as per 2017 financial year (Seagate.com, 2019). The main purpose of this assignment is
to analyse Seagate Technology from various management concepts and theories.
2. Internal and external environment analysis
This section analyses Seagate Technology under three distinct environment such as
Remote, Operating and Industry.
2.1 Remote Environment
SWOT:
This section conducts a SWOT analysis of Seagate Technology.
Strengths
 Reliable suppliers
 Customer satisfaction level is high
 Strong dealer community
Weaknesses
 Financial planning lacks efficiency
 Strong competition in the industry.
The industry has many leaders like
Western Digital, Kingston
Technology, Samsung Electronics,
Toshiba, Hitachi and Fujitsu.
 Ineffective forecasting leading to

4SEAGATE TECHNOLOGY
higher inventory both in-channel and
in-house
Opportunities
 New customer base opportunities from
online channels
 Increasing demands for higher storage
capacity
 Growing demands for fast-performing
disks like solid-state drives (SSD)
Threats
 SSD are highly expensive
 Failure rate of SSDs are also high
 Increased market competition
Table 1: SWOT analysis
(Source: Igami, 2017)
The above table shows a SWOT analysis of Seagate Technology. The analysis suggests
that Seagate has opportunities from growing demands for higher storage drives. Online channel
sales has increased for hard drives, which Seagate should capitalise on to increase its online
customer base, and improve its overall consumer base and market shares. Seagate should reduce
failure rates from its SSDs to be able to capitalise the growing demands for highly efficient
SSDs. This move will also boost its market competency.
PESTEL:
This section analyses the external business environment for Seagate Technology.
Political
 Political stability in
Economic
 Growing economy in
Social
 Growing demands for

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major markets
(Opportunity)
 Increasing
international trade
agreements
(opportunity & threat)
 An increasingly
growing governmental
support for
automation
(opportunity)
developing nations
(opportunity)
 Growing disposable
income in the middle
class (opportunity)
high level customer
service (opportunity)
 Increasing online
purchase for hard
drives
Technological
 Increasing online
transactions
(opportunity & threat)
 Business automation
(opportunity)
Environmental
 Growing demands for
green products
 Shifting focus towards
business sustainability
Legal
 Improving patent laws
(opportunity)
Table 2: PESTEL analysis
(Source: Hiratsuka, 2016)
The above table shows the PESTEL analysis of Seagate Technology. Growing disposable
income in the middle class families is a real boost to the company considering that sales will
further increase. Growing demands for customer service and online sales should be taken as
opportunities to improve its existing service quality and thereby, adding more market shares.

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Business automation will help to reduce the overall operational cost. This is required as well
considering that SSDs, which are in-demands attract a huge capital expenditure. Growing
demands for environment-friendly business is an opportunity and should be utilised to retain its
competency.
2.2 Operating Environment
Firms’ competitive position:
Seagate Technology follows a “Differentiation” strategy to offer quality products. In
course of following a Differentiated strategy, Seagate has strategies to go for strategic
acquisitions. Strategic acquisitions help Seagate expand its network of expertise and enhance
service excellence. Some of its strategic acquisitions include (Sutthijakra & Intarakumnerd,
2015),
 Xyratex, a leading provider of testing equipment maker and data storage technology
 Avago Technology’s LSI flash business,
The acquisition of Xyratex helped Seagate in numerous ways. This acquisition has provided
pricing power over other HDD manufacturers. This helped the company maintain competitive
HDD pricing and reduce its HDD manufacturing costs.
However, the pricing is soaring up for hard disk drives. There is a growing demand for
high-performing HDDs. The making of high-performing HDDs will cost high leading to higher
price for HDDs. Seagate identified the rising opportunity in the form of high-performing drives
and decided to manufacture SDDs. SDDs is quicker and a high-performer. However, it is
expensive as well. The acquisition of Avago Technology was perhaps a move towards ensuring
the production of SSDs. Notably, Avago Technology was helpful for the company in two ways.

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Seagate outsourced the flash components, which helped it to reduce the cost of SSDs.
Additionally, Seagate has the opportunity to integrate its technology with the SSD products. This
is more competitive and will give the company an edge over its competitors (Nakwa & Zawdie,
2015).
The profile of customers:
The customers of Seagate Technology will fall under “Demographic Segmentation”. The
customers are educational institutions like colleges and universities. The customers are all
retailers who use computers for accounting, cloud computing and many other computer-related
works. The customers are also the IT, accounting, banking, finance and other companies (Igami
& Uetake, 2015).
Reputation among suppliers:
Seagate Technology shares effective relationship with its suppliers. Seagate uses demand
forecasting technology to know about the market demands and convey similar to the suppliers.
There is a lack of effective communication between Seagate and its suppliers as demand
forecasting is not very effective. However, the company has not faced any real challenge in
fulfilling the market demands for products used as storage capacity. To suppliers Seagate is a
company that never compromises on quality. Seagate ensures that quality materials and
processes are in place during the production process (Igami, 2018).
Ability to attract capable employees:
Seagate is one of the very few global companies that graduate professionals aspire to
work with. On a broader aspect, team spirit and work culture are the factors that attract people
towards the company (Srithip, Suthummanon & Sirivongpaisal, 2017). Teamwork is essential in

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keeping the team members motivated at times they are going through their bad phases.
Workplace culture is important for creative thoughts and innovation.
2.3 Industry Environment
Porters’ Five Forces:
Force Key Determinants
Buyer Power (Medium to high)  Buyer concentration
 Switching costs
 Buyer size in volume
Supplier Power (Low to Medium)  Supplier concentration
 Switching costs
 Supplier size in volume
Industry Rivalry (Medium to high)  Size and number of competitors
 Brand identity
Barrier to entry (Medium to high)  Economies of scale
 Capital requirements
 Brand identity
Threat of substitutes (Low to medium)  Switching costs
 Performance and price of substitutes
Table 3: Porter's Five Forces
(Source: Kim et al., 2019)
The above table covers an industry environment analysis for Seagate Technology.
3. Assessing the resource profile

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Physical resources:
Seagate Technology is an IT-based company that manufactures hard disk drives (HDDs).
Physical resources for the company are as follows (Annualreports.com, 2019):
 Read/Write Heads
 Assemblies of Printed Circuit Board
 Head Disk Assembly
 Disk Drive Assembly
 Enterprise Storage
 Enterprise Performance HDDs
 Enterprise Capacity and Archive HDDs
 Enterprise SSDs
 Client Compute
 Mobile SSHDs and HDDs
 Desktop HDDs and SSHDs
 Video HDDs
 Gaming HDDs
 NAS HDDs
 Surveillance HDDs
Financial resources:

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Figure 1: Financial Statements of Seagate Technology
(Source: Produkte.erstegroup.com, 2019)
Human resources:
The human resources of Seagate Technology takes care of many HR activities like
employee recruitment, payroll, scheduling, benefits administration, employee training, internal

11SEAGATE TECHNOLOGY
relations, compliance and safety. Human resource management efficiently designs jobs to fulfill
the Seagate’s requirement of recruitment. The number of criterion for screening the applicants is
well placed, and able to attract skilled and talented employees (Annualreports.com, 2019).
4. Conclusion
To conclude, it can be said that Seagate Technology has an established image in the
computer storage industry. Therefore, it faces minimal or perhaps no threats from any new
entrant. It has been able to lead this segment of market despite being surrounded by top
competitors. However, it needs to capitalise on opportunities and to be able to counter threats to
attain business sustainability. The company should expand its existence. It should have a good
presence over online channels to be able to add more new customers to its customer base and
enhance its markets shares.