Organizational Environment, Research Paper Example

Introduction

Organizational environment is composed of internal and external factors. The aim of scanning the environment is to determine forecasts and development of factors that can contribute to the success of an organization. Environmental scanning is the acquisition, utililization and possession of information about relationships, occasions, trends and patterns within and organizations external and internal environment. The valuable information so gathered helps the organizations management decide the future path of the company. Environmental scanning allows for in depth analysis of the existing threats and opportunities in the environment (Aguilar, 1967)

This helps a company to formulate strategies that capitalize on the available opportunities and reduce the threats. An opportunity for one organization can pose as a threat to another. This research paper will evaluate environmental scan conducted for 3 companies in different sectors, determine emerging issues, events and trends that bring about significant threats and opportunities that dictate how these organizations adapt for success. The organizations can be positioned to influence events, minimize threats and maximize opportunities. To achieve this, the organizations need to evaluate their resources, capabilities and have a clear understanding of their strengths and weaknesses through which they can comfortably adjust to change.

Internal environmental analysis

Environmental scanning starts by the observation of an organizations internal environment. This includes employee interaction with the management, employee interaction with other employees, management interaction with shareholders, manager interaction with other managers, operational potential, main staff, organizational structure, brand awareness etc.

Methods for data collection regarding the internal environment include surveys, discussions and interviews. Internal environmental analysis helps in identifying an organizations strengths and weaknesses (Menon, et al, 1999).

External Environmental Analysis

Competition makes it necessary to conduct an external environmental scan. Competition brings with it changes in the external environment. Therefore, the organizations find it necessary to gather information from the external environment to make their long term plans to be feasible. Due to the dynamic nature of the environment, the organizations find it mandatory to gather information about the moves and actions of their rivals.

It is essential for the organizations to update their internal environment and core competencies in line with the external environment. The organizations should endeavor to adjust to the changes in the environment by being vigil and agile due to the infinite nature of environmental factors. For a vigilant organization that constantly monitors the activities of its rivals, flawed intelligence can be easily rectified. For instance, faulty initial forecast of raw material prices can indicate the need for the organization to conduct an in depth scanning, analysis and forecasting to create a more reliable prediction about the cost of inputs. Also changes in factors such as competitor’s preferences, market tastes, technology and activities can be taken into account.

Three correlated environments are analyzed and studied in external analysis e.g.

1. Industry/immediate environment
2. National environment
3. Broader macro environment/socio-economic environment

An examination of an industry’s environment involves the appraisal of the organizations industry competitive structure such as competitive position of a specific organization together with its main competitors. The industry’s history, dynamics, stage and nature need to be assessed. Effects of globalization on industry competition should also be evaluated.

National environment involves the evaluation of the competitive advantage accorded to the industry by national framework in a global environment. Macro environment analysis takes into account; government, macro-economic, international, technological, social and legal factors (Menon, et al, 1999).  Evaluation of an organizations external environment establishes the opportunities available and threats it will have to face. The management should take into account the present state of the environment together with future forecasts.

SWOT Analysis

Strategic planning process involves the scanning of both internal and external environments. Strengths or Weaknesses are environmental factors internal to the firm. Opportunities or Threats are external to the firm. SWOT analysis is the strategic analysis of the environment.

Environmental scan uses SWOT analysis to furnish an organization with meaningful information to help it to match its capabilities and resources with those of competitors. Therefore environmental scan is instrumental in selection and formulation of strategy.

SWOT analysis of Colgate Palmolive

Colgate Palmolive is a multinational company that deals with consumer products. Some of these products fall in either of the following categories; household surface, oral care, pet nutrition, fabric care and personal care. The company has a branch network that spreads across 200 countries world wide. It has an employee base of 36,000 people and it’s headquarter is in New York.

Colgate Palmolive has introduced a new product, Colgate Precision that it intends to market. The major challenge lies in how the company is going to communicate this brand, allocate budget constraints and come up with a market mix the new products revenues and sales. The strategy used for marketing this product is to promote it as a high quality mainstream oral product, this has given the company a competitive advantage by offering the product at a reduced price so as to initiate large sales volume despite competition from its main competitors. This has enabled the company to realize revenues amid stiff competition. This decision was arrived at after analysis of forecasted data showing sales volumes, packaging, cost of manufacture, advertising, prices etc.

SWOT analysis of the Coca Cola Company

Coca cola deals exclusively with the distribution, manufacture and marketing of non alcoholic drinks globally. It has a strong brand portfolio and brand name. The increasing numbers of Hispanics with strong buying power have continued to attract the attention of the marketers.

Coca cola has an asset value of $77,000 million by the end of 2010. Its way far ahead of its main competitor Pepsi. The strong brand name enables coca cola to penetrate markets as it is able to recall customers. The company’s future is however threatened by the ruthless competition which could adversely impact on its market share.

SWOT analysis of US airways

The US Airways is well position to face its competitors such as jet blue, air Tran airway, Delta Airlines, Southwest etc. Its fare reduction is used through effective marketing to beat competition. Strategy of fare wars allow the airline to compete for market dominance and market share. By reducing prices, customer retention and attraction is guaranteed.

The large number of airplanes owned by the airline company has cost implications in terms of lease despite the fact that most of those planes are not being used. Therefore the company finds itself operating on a high overhead cost as supply outstrips demand.

After September 11, the airline company found itself loosing customers. The reason for this is because it suspended flights in most locations. This led to the decline of customer base.

South west the airlines major competitor took over the subserviced locations. Also, given the recent problems that the airline has been experiencing, a plane crash would compound its entire operations. This company has also suffered much loss after its failed merger with the United Airlines thereby undermining its service delivery.

SWOT Form

Name of Organization Colgate Palmolive

 Name of Organization the Coca Cola Company

Name of Organization US Airways

References

Aguilar, F., (1967), Scanning the business environment. NY: Macmillan

Menon, A. et al. (1999). “Antecedents & Consequences of Marketing Strategy Making”.   Journal of Marketing 63 (2):