In any industry and in any company the type of environment places key to the overall success of that company. Someone wrote that, “The nature of the global business environment guarantees that no matter how hard we work to create a stable and healthy organization, our organization will continue to experience dramatic changes far beyond our control.” (BrainyQuote, 2013) An organization’s business strategy is an intricate part of how a company will create value and sustain a competitive advantage over other organizations within that industry. Environmental scanning is a priority within a company in developing a successful, and longstanding business strategy for detecting any opportunities or threats that could impact the company. In the following essay, this paper will conduct an environmental scan on Starbucks and Google, to show the different environments that can lead a company’s success. The paper will discuss the value of environment scanning in their business strategy as well as the type of guidelines measured to verify its effectiveness in each company.
When developing business strategies, business managers first create a strategy assessment that reviews the operational plans and other workplace implications. Within the strategy assessment, the company establishes the leadership, builds teams, and creates the communication, and work plans. The next step in the business strategy outline is to gather and collect information on the business environment. In doing so the business manager conducts an environmental scan. According to the Business Dictionary, environmental scan is, “Careful monitoring of an organization’s internal and external environments for detecting early signs of opportunities and threats that may influence its current and future plans.” (Business Dictionary) Environmental scanning systematically process of surveying and interpreting any relevant data in order to identify potential external and internal threats and opportunities that could impact the present or future plans of the company. The business managers not only gather information on the external world but also on the competition and internal information on the company. What is more important is that conducting an environmental scan can help the organization determine if their business needs are in tuned with availability and competency level of the workforce. (CPS 3) This is effective in shaping the working business plan in response to the frequent changes in the workforce. Environmental scanning can benefit the organization in understanding the type of individuals to hire for leadership that can be variable in recruiting and retention of the employees. Information gathered internally can help the organization see the potential threats of decisions made from leadership and employees in the terms of ethical choices, criminal behavior, and negligence. Opportunities saw internally can help to elevate the company to another level by putting the right people in charge and paying more attention to areas that can benefit the organization. External threats could mean a change in social, economic, and international threats and opportunities to the organizations.
There are several steps to take when conducting an environmental scan. One of the first steps are to gather and collect external information in the region in which it operates. This information includes the economy, the political system, and the demographic factors such as population, and distribution. (SHRM, 2013) The next step is for business managers to focus on the competition. In doing so the environmental scan includes collecting information on the market trends, opportunities, and threats the competition could potentially have impact on the company. Another step is to gather information internally, this information includes examining the strengths and weaknesses, and considering the future and present situations of the company. Information can be gathered by interviewing and surveying the leadership and a few employees. (SHRM, 2013) “Environmental scanning includes both looking at information (viewing) and looking for information (searching).”(Choo, 2001) When business conduct an environmental scan they use several methods that can be used gather and collect data that is useful in business assessment.
Starbucks is a company that has profited millions on purchasing and providing high quality roasted bean coffees to customers who purchase coffee beverages. It has since branched out to provide a variety of pastries and confections, and other products available online and in stores. Google operates as one of the premier search engines of the internet and has branched out to deliver services on mobile phones, computers, tablets, and other products. In addition to being a search engine, Google provides services such as email, translation, research and development, books, maps, and host of others. Both companies have been very successful, and learned how to manage market trends and stay ahead of their competition.
When developing their external factors do differ. The environmental scan conducted that the political, technological, social and economic, and demographics factors do impact the companies in several different ways. Government, laws, and changes is technology affect Google, in terms of privacy, cyber laws that can affect the internet, and changes in technology that causes Google to constantly upgrade their systems. These threats or opportunities can affect user’s experience and Google’s overall infrastructure. Starbucks on the other hand can is only affected by social and economic factors, and political factors that include tax and tariff laws on the import of the coffee beans, and a downslide in the economy. Changes in health care coverage could impact their financials, which could lead to cutting costs by closing locations or letting employees go. Internally, both companies must constantly evaluate and survey leadership skills, and places where they can improve. Threats to competition are continuous however both have managed to stay market leaders by researching trends, expanding to all demographics, and offering services to all users no matter their income, education, or political motivations. Their environmental scans show that both have develop business strategies that implement strong guidelines that measured each threat or opportunity impact to the present or future of the company.
In evaluating the environmental scans, both Google and Starbucks have created value in their businesses by offering products and services that other companies have yet to offer. This includes for Google branching to mobile technology, creating innovative products such as Google Glasses, Google Phone, and Google laptops. Starbucks offers their own energy drinks, special made coffees, and merchandise. Their trademarked coffee allows them to offer an in store environment where people come to relax, drink coffee, and hang with friends. They measurement guidelines used is surveying of customer satisfactions, researching market trends, using social media, and developing a place for customer/employee feedback. These have proven to be effective in their success of the company. Social media has provided both companies with a place to conduct research on demographics, economic, and social changes with users’ input.
Environment scans are an effective tool for companies to manage their business strategies. According to research, “Environmental scanning is the acquisition and use of information about events, trends, and relationships in an organization’s external environment, the knowledge of which would assist management in planning the organization’s future course of action.” (Choo 2001) It is useful in recruitment and retention, creating value, strategizing against competition, and for organization learning. Google and Starbucks are two examples of businesses that have an excellent business strategy where their environmental scan may differs but their measurements in its effectives is similar in obtaining feedback, researching trends, and surveying their leadership in order to be successful presently and in the future.
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