Environmental scanning concerns the analysis, examination, and assessment of both the internal and external environments of an organization. Environmental scanning is an invaluable tool in preventing strategic calamities and enhancing the competitive edge and long-term health of the organization. Organizations depend on environmental scanning to discover shifts in their internal and external environments that could either harm or benefit the organization, and reveal their strengths, weaknesses, and opportunities (Rothaemel, 2012).Successful organizations always find ways to adapt their internal strategies and processes to correspond to their external environments. This paper presents an environmental scan of two large organizations that are leaders in their respective industries.
Wal-Mart Inc. is a US corporation operating a chain of grocery stores, discount department stores, and hypermarkets in different nations around the globe. Wal-Marts primary business is to offer goods and services to retail and wholesale customers. Wal-Marts internal environment consists of a robust hierarchical corporate structure that steers the corporation's unique way of doing things (Fishman, 2006). With regard to management, Wal-Marts top executives and key support operations are centralized at its headquarters in Arkansas. It is company policy for all Wal-Mart store managers to replenish inventory and submit to the headquarters daily reports. The organizations corporate culture centers on its commitment to be the best in its industry. Given this, the companys strategy for entering international markets involves buying out existing companies. Wal-Mart runs a strong research and development unit that heeds societal trends and monitors its competitors to maintain the companys competitive edge (Fishman, 2006). Furthermore, Wal-Marts internal environment consists of the largest non-governmental workforce in the world whose mission is to provide positive customer experiences.
Conversely, in Wal-Marts external environment, political factors are a great concern, especially since the company operates in many countries worldwide. Wal-Mart performs an extensive analysis of each country's political situation before entering. Economically, Wal-Mart is very stable, being the largest company in the world with regard to revenue (Fishman, 2006). Wal-Marts extensive income and resources enhance its capacity to cut costs associated with running the business. These cost savings translate to low product prices. In the social environment, Wal-Mart continually adapts to cultural and demographic shifts to ensure that all its stores reflect their respective communities. In terms of the technological environment, Wal-Marts broad products reflect the technological advances of competing manufacturers. Additionally, Wal-Mart keeps up with environmental trends by adopting strict regulations that ensure its products do not harm the environment (Fishman, 2006). Furthermore, Wal-Marts refined waste management systems seek to reduce pollutants and maintain environmental integrity. On the legal front, Wal-Marts operations adhere to the laws of each country it operates in, thus maintaining its corporate image.
Wal-Marts competitive advantage centers on its adoption of diverse strategies including cost leadership, using innovation levers, entering rural and other underserved markets, and customer centricity(Fishman, 2006).Wal-Mart maintains a competitive advantage by using its extensive capacities and resources, and refined inbound logistics that lower the cost of its products. Wal-Mart also forms strategic partnerships with big suppliers by offering great assess to the market. Overall, it is the combination of Wal-Marts effective positioning as a budget player and its unique business activities that maintain the companys competitive advantage, helping it successfully outperform its competitors. To measure its strategic effectiveness, Wal-Mart constantly evaluates its position within its market in relation to competitors by tracking its growth in its diverse markets. Market position is an effective measurement guideline for assessing strategic effectiveness as it speaks to the effectiveness of the company's activities and strategies regard its competitors.
On the other hand, Apple Inc. is an American multinational corporation whose main business is to devise and sell computer software and consumer electronics such as personal computers and smart phones (OGrady, 2008). In its external environment, political factors affect Apples business operations and potential. The company faces political problems, some of which are beyond its control, for instance, geopolitical uncertainties, the authority to work in certain countries, and the war on terror. These issues impact the sale of Apple products globally. Apple outsources its most of its manufacturing operations to other countries to minimize costs; thus, political instability these countries undermines manufacturing operations. Economic factors also affect Apples operations as customers' purchasing power relies largely on national and global economic conditions. Unfavorable economic conditions such as high unemployment rates and economic recessions undermine the sale of Apples products (OGrady, 2008). Conversely, social factors such as shifting consumer preferences also impact Apples sales and operations. In recent years, the social scene has changed significantly as more people seek a modern, luxurious lifestyle characterized by the latest gadgets. Furthermore, social influences on the music industry have spurred significant growth in music downloads and sharing. Apples music store, iTunes, has benefited greatly from this social shift. With regard to technological factors, Apple is renowned for continually exploiting innovative technologies to produce cutting edge products that appeal to the market. Apples environmental policies focus on recycling and reducing pollution. In fact, its product packaging is made of recyclable material. On the legal front, Apple keeps up with employment, health, and safety codes in all its operations and adapts its policies to the legal environment of the countries in which it operates.
Internally, Apples organizational culture provides capacities that support new policies and strategies. Apple effectively manages human resource by developing and integrating workers into its organizational culture, which encourages and upholds creativity and rapid innovation. Apples operations are segmented into different departments that perform distinct tasks, which collectively buttress the companys way of doing things (OGrady, 2008). Apples key focus is on excellence in leadership, product manufacturing, and innovation through the use of latest technology, creativity, and secrecy, which allows the company to release unique products to the market almost every year(OGrady, 2008). Apples research and development unit is one of its key functions as it follows market trends and ensures that the company meets and exceeds market expectations in all its product and services.
Apples greatest competitive advantage lies in its application of the marketing principles of positioning. Apple appreciates the value of standing out in the customers mind. In this regard, Apples competitive advantage is its provision of unique products such as the iPhone, iPod, and iTunes. Apples other major competitive advantage is its refined ecosystem that allows consumers to synchronize multiple Apple devices and software. The design of Apples products and services is such that they complement each other in a way that allows the consumer to share, copy and sync media effortlessly across multiple devices. Apple creates value and competitive advantage by concentrating only on a few things, namely product and software development, which it does excellently. Additionally, Apple focuses on innovation and creativity to steer its operations and manufacturing functions (OGrady, 2008). Lastly, Apple gains competitive advantage and value by focusing on customer experience. It achieves this by knowing what it customers need, and working towards these needs. To determine its strategic effectiveness, Apple measures the efficiency and quality of its products and activities (OGrady, 2008). These measures are effective in determining the productivity, cost-effectiveness, and accuracy of Apple's business and products.
Fishman, C. (2006). The Wal-Mart Effect: How the world's most powerful company really works and how it's transforming the American economy. New York: Penguin Books
OGrady, J. D. (2008). Apple Inc. (Corporations that changed the world).Connecticut: Greenwood.
Rothaemel, F. (2012).Strategic Management: Concepts. New York: McGraw-Hill/Irwin.
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