This week we are studying the External Environment as a critical part of developing strategy. A PESTEL Analysis is one of the major tools you use in studying the external environment. STEP 1 Please perform a quick PESTEL Analysis and determine what the biggest risk is to each company. Your task is to determine the biggest PESTEL risk to each company and not necessarily a comprehensive analysis. STEP 2 Your team has $1 million to invest in these companies. You can invest in one, two or even all of them. Which ones would you invest in? How much of the $1,000,000 would you invest? You must hold the investment(s) for five years. Alibaba Group Holding Limited is a publicly traded Hangzhou-based group of Internet-based ecommerce businesses, including business-to-business online web portals, online retail and payment services, a shopping search engine and data-centric cloud computing services. In 2012, two of Alibabas portals handled 1.1 trillion yuan ($170 billion) in sales. The company primarily operates in China, and at closing time, on the date of its historic IPO, 19 September 2014, Alibaba's market value was measured as US$231 billion. The group began in 1999 when Jack Ma founded the website Alibaba.com, a business-tobusiness portal to connect Chinese manufacturers with overseas buyers. Alibaba's consumer-to-consumer portal Taobao, similar to eBay, features nearly a billion products and is one of the 20 most-visited websites globally. The Group's websites accounted for over 60% of the parcels delivered in China by March 2013, and 80% of the nation's online sales by September 2014. Alipay, an online payment escrow service, accounts for roughly half of all online payment transactions within China. Cumulus Media Networks is an American radio network owned and operated by Cumulus Media. It controls many of the radio assets formerly belonging to the American Broadcasting Company (ABC), which was broken up in 2007; Cumulus owns the portion of the network that was purchased by Citadel Broadcasting that year. The network adopted its current name in September 2011, following Cumulus's acquisition of Citadel; prior to this, it had been known as Citadel Media Networks since April 2009, after licensing the "ABC Radio Networks" name from The Walt Disney Company for nearly two years. The company is helmed by two radio executives from Atlanta. Prominent hosts carried by Cumulus Media Networks include Don Imus, Geraldo Rivera, Mike Huckabee, Mark Levin, Michael Savage, Jim Brickman, Adam Bomb, Kix Brooks (American Country Countdown), and Tom Kent. Kaplan, Inc. is a for-profit corporation headquartered in New York City and was founded in 1938 by Stanley Kaplan. Kaplan provides higher education programs, professional training courses, test preparation materials and other services for various levels of education. It is a wholly owned subsidiary of Graham Holdings Company, formerly known as The Washington Post Company. Kaplan Higher Education is a group of institutions that offer classroom and online certificate and degree programs in fields such as criminal justice, health care, business, information technology and legal studies. Iowa College Acquisition Corporation, operating under the Kaplan University brand, also offers online programs. At year-end 2013, Kaplan Higher Education had approximately 60,300 student enrolled. Kaplan Professional offers education for licensing, certification, and training purposes, in areas including accounting, insurance, securities, real estate, financial planning, information technology, and architecture. Established in 1938, Kaplan Test Prep sells preparation materials for standardized tests through tutoring, on-site classes, asynchronous and live programs, print books, and digital products. With programs for individuals, schools, and businesses, Kaplan Test Prep offers preparation for more than 90 standardized tests. Keurig is an American manufacturer of coffee brewers for both home and commercial use. Keurig is based in Massachusetts. Its main product is the K-Cup, a single-serving coffee brewing system. Each KCup is a plastic container with a coffee filter inside. Ground coffee beans are packed in the K-Cup and sealed air-tight with a combination plastic and foil lid. When the K-Cup is placed in a Keurig brewer, the brewer punctures both the foil lid and the bottom of the K-Cup and forces hot water under pressure through the K-Cup and into a mug. Initially used only for coffee, K-Cup varieties now include coffee, tea, hot chocolate, iced tea and coffee, as well as fruit drinks. Keurig has been criticized for its lack of recyclability but the company reports "We are working on a few different fronts to improve the environmental characteristics of the K-Cup system. Keurig licenses its KCup technology to coffee roasters and tea makers such as Green Mountain Coffee Roasters, Diedrich/Gloria Jeans, Timothy's World Coffee, Van Houtte, Caribou Coffee, Celestial Seasonings, Bigelow Tea Company, Twinings, Tully's, Coffee People and Newman's Own. The Kimpton Hotel & Restaurant Group Inc. is an American hotel and restaurant company. Founded in 1981 by William (Bill) Kimpton, it is the largest chain of boutique hotels in the United States. The company's headquarters are in San Francisco, California. All its properties are located in the United States. Most Kimpton properties are marketed under their own independent names as boutique hotels; however, in 2005, the company launched two sub-brands within the company's brand: Hotel Palomar and Hotel Monaco. Each hotel has a restaurant or bar that is marketed as upscale or trendy. The company's loyalty program is called Kimpton InTouch. Fortune listed it as the #28 best company to work for in 2013. Under contract, the company also manages and operates hotels owned by other entities. VTB Bank is one of the leading universal banks of Russia. VTB Bank and its subsidiaries form a leading Russian financial group VTB Group, offering a wide range of banking services and products in Russia, CIS, Europe, Asia, Africa, and the U.S. The Groups largest subsidiaries in Russia are VTB24, Bank of Moscow, and TransCreditBank. VTB was ranked 236th on the FT Global 500 2011, The Financial Times annual snapshot of the world's largest companies. It climbed to 82nd in the ranking of the 500 largest companies in Europe, the FT Europe 500 2011, and to 38th in the FT Emerging 500 2011, the list of the 500 largest companies on the worlds emerging markets. The Moscow-based bank is registered in St. Petersburg and came 65th in the British magazine The Bankers Top 1000 World Banks in terms of capital in 2010. ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation) is a Chinese multinational telecommunications equipment and systems company headquartered in Shenzhen, China. It is the world's fourth-largest mobile phone manufacturer. It also offers products that provide value-added services, such as video on demand and streaming media. ZTE primarily sells products under its own name but it is also an OEM. With the evolution of mobile industry, ZTE has grown significantly in its handset business and ranked No. 4 for both mobile phone and smartphone domains as of Q2 2013. And ZTE won the 5th place in U.S. smartphone market.

1. In light of your PESTEL analysis and having identified the PESTEL component that poses the biggest risk for each company, which, if any, would you invest some or all of your $1 million?

2. Assume that any investment you make in any company that you will not withdraw your investment for five years, state how much of the $1 million you would invest for five years?

3. Explain your reason for investing in that company given their biggest PESTEL component risk. You must hold the investment(s) for five years. If you do not invest any of the $1 million or only some of it it in any of these companies, explain why you withheld that money, what you will do with it and why not investing it is a better financial decision.

(Please provide the answer for qn 1,2,3)