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Aspect of environmental scanning
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Aspect of environmental scanning
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3. Environmental Scan: Environmental scanning is the process of gathering information about events and their relationships within an organization's internal and external environments. The basic purpose of environmental scanning is to help management determine the future direction of the organization (Barnat, 2004). For a business to succeed, it is important to study the business environment of the firm that consists external and internal influences that affect the firm’s decisions and performance (Grant, 2010). Environmental scanning includes the assessment of Macro and Micro environmental analysis. Source: http://www.whatmakesagoodleader.com/macro-environment-analysis.html 3.1 Macro Environmental Analysis The first phase of a strategic analysis, Macro Environmental Analysis, commonly referred to a PESTLE framework, is the assessment of opportunities and threats to the industry where the firm belongs that is outside the control of our industry. The PESTLE stands for Political, Economic, Socio-cultural, Technological, Legal and Environmental (Pestle-Macro environmental analysis, 2012), describes a framework of macro-environmental factors used in the environmental scanning component of strategic management, forming part of the external analysis when making a strategic analysis; it basically gives an overview of the different macro environmental factors that the company has to consider. Strategic PESTLE Analysis helps us identify the growth or decline tendencies, business position, possible threats, and direction for operation. 3.1.1 PESTLE analysis: Source: (http://www.whatmakesagoodleader.com/macro-environment-analysis.html) 3.1.1.1 Political Factors To begin with, Political influences refer to... ... middle of paper ... ...us creating more opportunities in the market. • Technologies and Innovation: WeTrust will constantly look for technological up-gradations and innovations, in order to provide high quality services and create opportunities for advancement. Threats: • Competition from stronger players: There are many existing key players in the market providing recruitment and HR consultancy services and therefore, WeTrust will face tough competition from them. • Potential new entrants: With positive economic outlook, fine business environment, and increasing number of population growth rate, it is expected that there will be more companies coming in the industry; Therefore, WeTrust will thrive to aggressively establish its credibility among its customers and capture the market in a short span of time. Works Cited Fonterra. (2014). Retrieved from:http://www.fonterra.com/nz/en/About
Anheuser-Busch, as an ever-expanding company, continually re-invents, innovates, and improves its internal processes. Part of this is the continuous improvement of its supply chain management processes. Having vertically integrated most of its supply chain, Anheuser-Busch is less involved in supplier selection and the improvement of external sourcing. Rather, they focus on their internal processes in order to create a competitive advantage in the market. In an attempt to decrease costs, and in turn improve their bottom line, the company looked internally. They found a startling inefficiency: the water material requirement in their products was extremely high. This not only conflicted with their corporate social goals, but threatened to be a long-term unnecessary cost driver Anheuser-Busch chose to actively innovate its processes and sourcing channels. In their analysis of the company, it became apparent that production of Anheuser-Busch products required a tremendous amount of water.
Moreover, Ansoff suggested some main direction that companies should follow to develop market and product conditions. The market development and differentiation strategies suggest that in order to increase sales, WRSX have to offer their services in new developing markets such as China or India. The strategy for market development gives the opportunity to expand their service in order to attract competitors' clients and to expand in unreached markets (Barry, Witcher and Chau, 2010). Potential solution could be acquisition of UK agency competitor to assist WRSX to enter new market quicker and smoother go through the barriers of entry such as government regulations and different culture.
More new products need to be introduced and research needs to be done to find out which products will be most popular and profitable.
Aqualisa launched the most significant shower innovation in recent British history: the Quartz shower. The shower provides significant improvements in terms of quality, cost, and ease of installation. In product testing, the Quartz shower received rave reviews from both consumers and plumbers alike. However, early sales of the Quartz have been disappointing. Now, the company is faced with some key issues about whether to change the channel strategy, promotional strategy, and the overall positioning of the product (niche or mainstream product) in the context of his existing product line.
Macro Environment consists of Political (P), Economical (E), Social (S) and Technological (T) factors that affect the Company. Continuous monitoring of these variables is an important marketing function. As Corporations today, Ecover is also sensitive to Macro Environmental changes. Some of the PEST factors that affected Ecover are discussed below.
New entrants to an industry, with a desire to gain market share, will put pressure on prices, costs and capital needed to compete. It can affect the profit potential.
The deep analysis of the macro-environment is key to the organisations in order to understand which factors are impacting their operations. The main purpose of PESTLE analysis (Political, Economic, Social, Technological, Legal and Environmental) is to identify those factors that have an impact on the organisation but are outside its control area. Together with other frameworks (such as Porter’s ‘5 forces’), PESTLE framework is required to develop a comprehensive analytical strategic process.
Environment is another significant factor that affects the strategic plan. When a major environmental disaster occurs, such as a hurricane, it can affect a company’s production facilities, their sales facilities and the community that the company serves.
In analyzing the macro-environment, it is important to identify the factors that might in turn affect a number of vital variables that are likely to influence the organization's supply and demand levels and its costs (Kotter and Schlesinger, 1991; Johnson and Scholes, 1993). The "radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization" (Tsiakkiros, 2002). A number of checklists have been developed as ways of cataloguing the vast number of possible issues that might affect an industry. A PEST analysis is one of them that is merely a framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily be subsumed in the others. The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans (Byars, 1991; Cooper, 2000).
One must look at the economic environment and how it will affect the launch of the product. One must look at:
Even environmental and social link in this case study of PESTLE Analysis factors. For the example of CO2 emissions, is an Environmental ingredient which has Political & Legal influence, it has an Social impact in the UK culture where the customer is more Green consumers they like to use the goods and services which are more eco-friendly which also have less impact on the environment study case
The Economy incorporates, growth, employment, competitiveness and efficiency. Society includes health and safety. The environm...
Give concrete information about the market you intend to compete in: current situations, trends, projections.
Technological change, change in economic climate, natural occurrences and such-like are matters that concern the macro-environment of a business. These external, uncontrollable, influences can and will impact hugely on the success or failure of a business. One of the tools that are applicable in considering these factors is PESTLE. Political; Environmental; Social; Technological; Legal and Economic considerations will need to be engaged in order to prepare the business for macro-environmental influences. For this reason, PESTLE will be the most appropriate tool to use to identify and outline the main macro-environmental factors that may affect my business.
Environmental factors cater for the protection of the environment. A business must carefully be able to look at its surroundings to see for benefits and ensure that its daily production does not interfere with society.