Introduction
CACI Inc is an American corporation whose principal business is the provision of information solutions and services for governmental institutions and civilian clients in intelligence, national security and defense. According to its website (caci.com), the company seeks to provide information solutions with the aim of safeguarding national security, giving support to critical decision making to fight off global terrorism threats, and modernization of the government to meet national security challenges. The company’s stock is traded in the NYSE and boasts of over 15500 employees spread in over 120 offices in North America and Western Europe (caci.com).
External Environmental Analysis
Political Environment
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The central part of the operations of CACI Inc is based in the United States. The United States government through its various arms and institutions is the largest customer of the company. The political environment in the United States has for the better part of the company’s existence been stable. However, the political environment in the United States has been subject to upheavals that occur internally, especially regarding budgeting decisions for defense (Caci.com).
Over the last decade, there is a growing appreciation within the political class for the need to integrate technology in governance. The importance of the use of information technology in t to inform the choices made in politics, especially in matters of national security is become apparent to the political class. This means that CACI Inc has an opportunity to take advantage of this changing mindset and penetrate deeper into the government information technology machine and grow its revenues (Mckeown 2012).
The company has benefitted in a great deal from the war in Iraq. Political developments indicate that this war is coming to an end and this presents an unclear future on the operations of the company. The end of the war may indicate the start of new and more robust partnerships with the new Iraqi government or it may mean the end of a rewarding partnership that the company has had over the last few years with the defense department in the provision of information services in Iraq (caci.com).
There has been clamour in congress and within the current United States administration to make significant cuts in military spending. This coupled with the ending of the military campaign in Iraq and the planned withdrawal of troops from Afghanistan, means that the company will suffer from reduced levels of the business conducted with the government. This scenario has been replicated in most western European countries where the need to deal with the effects of the economic downturn has lead to austerity measures which eat into the defense and intelligence budgets of these nations, thus greatly affecting the future business prospects of CACI Inc. This also sets a dangerous precedent for the company since in the last half a century, defense budgets were seen as essential components of national spending, and these cuts may mean that the high regard in which defense was held may be coming to an end. This may spell reduced business for CACI Inc in the coming years (Mckeown 2012).
Chinese business is also a growing political threat that may undermine the performance of the company. China has been making inroads in the provision of information technology services in developing and emerging economies, especially in Africa and Asia. This means that the plans that the company may have to make forays into those markets may be very difficult since Chinese competition will be already established (Allison & Kaye 2005).
Economic Environment
There is an improved economic performance following the devastating effects of the economic downturn. There is an improved level of consumer spending in the American market compared to the few years after the 2007/2008 economic hardships. The recovery of the economy has also resulted in increased employment numbers. Improved economic conditions will likely have an impact on the profitability of the company since a replicating increase in the spending of the government and civilian customers of the company is expected (caci.com).
Technological Environment
The company operates in the technology industry which has registered exponential growth in the last decade. Major corporate successes have been in the industry and companies like Google and Apple are perfect examples. This means that the completion in the industry is at all time high, and the implication is that the company’s competitive profile needs to be improved to keep up (Singer 2005).
Technology is very dynamic, and the pace of the change that has been experienced in the past decade indicates that it is important to keep up with any new developments to avoid becoming redundant. This means that CACI Inc has to invest huge amounts on research and development to ensure that it keeps up with the technology. This may hinder the growth in profitability since it means that technologies developed will only be in use for a few years before they are declared redundant. This also means more investment in partnerships with other companies in the industry to be able to successfully deal with the increased completion in the industry (Allison & Kaye 2005).
Social Environment
There is a growing acceptance of the use of technology in matters of intelligence and security in the society. This means that societies which were previously hostile to the use of technology are more comfortable with use of technology to monitor and fight crime. The implication of this to the performance of CACI Inc is the growth of its revenues as more local governance units increase their use of technology services offered by the company.
Internal Environment Analysis
The company has an established working profile with its main profitable clients; governments and security institutions. It has established itself over the years as a reliable service provider in technology on matters relating to security and governance. This is a strength that the company can take advantage of to improve its competitive edge over its competitors in the industry.
CACI Inc enjoys a committed and skilled workforce spread over 120 offices in the America and Western Europe. This means that the company has a key grip on its markets. The company’s workforce has grown through acquisitions of other companies. The company therefore boasts of the some of the best talent in the industry. This coupled with a robust management team, gives the company an edge over its competitors since internal management and operational weaknesses which plague many technology companies do not exist in the company (Allison & Kaye 2005).
CACI Inc has been subject to some very serious controversies over the conduct of its employees in Iraq. The accusations made against the company are serious in nature and may impact negatively on the relationships that the company has with governments who may not want to be associated with such controversies. The company will need to objectively reconsider its status in light of these controversies and make an objective plan to deal with them (Musgrove 2009).
The financial position of the company is robust, and the company has sufficient resources that it can employ in expansion in its current markets and make forays into new markets. As the world political and economic environment changes with an increasing number of growing economies in Asia and Latin America, the company can employ these resources to grow its market and extend its influence over a larger part of the globe.
The growth of new companies in the industry presents a threat to the growth of CACI Inc. Companies like Google and Oracle may in the near future grow to offer the same services that the company offers with a higher quality and more cheaply. An example of such is the use of Google Street view by security agencies to fight crime in various parts of the world. To counter this threat of erosion of market and high completion, the company will need to develop major policy frameworks to improve its service delivery to par with that of its competition (Allison & Kaye 2005).
Conclusion
CACI Inc has enjoyed considerable success since its inception, and commands a respectable market share. It also boasts of a high number of skilled employees over a large and important geopolitical area and a good working relationship with its major customers, attributes which give it an edge over its competitors. However, the company faces a threat of an increased completion in the technology industry and a rapidly changing geopolitical environment, threats which can hinder its growth and profitability in the future.
References
Allison, M & Kaye, J. (2005). Strategic Planning for Nonprofit Organizations. 2nd Ed. New York: John Wiley and Sons.
Mckeown, M. (2012). The Strategy Book, New York: FT Prentice Hall.
Singer, P. W. (March/April 2005) "Outsourcing War". Foreign Affairs. Council on Foreign Relations. New York City, NY.
Musgrove, M. (September 12, 2009). "Court Rejects Suit Against CACI Over Abu Ghraib Torture". The Washington Post.
CACI Inc Website. Retrieved March 24, 2013 from http://www.caci.com/about/profile.shtml
