To scan the organization environment better, it is important to list what to look for. Social issues give insight into consumer, vendor, corporate, and industry atmosphere, needs, and wants. Technology is extremely important in this “l want it now and accurate” mentality of society. Not permitting technological growth, including anticipation of more advanced products, can threaten an organization’s sundial. Environment and Political Climate Environmental scanning mandates that organizations look at environment, both actual and corporate.
Knowing both will set the stage for better reparation during competitive advantage strategies (Walker, Explains, ; Hut, 2005). Political climate and economic forces are important factors when conducting environmental scanning because the organization must understand its attractiveness. New laws, trade barriers, policy changes, and economies affect organizations, depending on the scope of organization. Demographics Demographics and psycho-demographics are factors of environmental scanning because demographic shifts may increase or decrease the demand for a particular service or product.
Changes in age groups, education, and income Of an area factor the effects on an organization. Consumer lifestyle also plays a role during environmental scanning because activities, interests, and opinions about a service or product can enhance or trip up the success of an organization (Macomb, 2008). International International factors, especially regarding whom the organization serves, is part of environmental scanning especially if the organization is looking to outsource or globally expand.
This factor is not aligned with the PASTEL model of environmental scanning but it is becoming an important aspect of environmental scanning (University of Washington Bethel, 2013). Economics Economics is part of the environmental scan model because the state of the economy can drive the success or failure of an organization. If unemployment is on the rise in a region, the workforce is strained because fewer people are hired and those currently employed end up wearing more than one “hat. In the health care field, high unemployment means more people using the emergency room as their primary care facility and without holding any insurance.
Most people will elect to wait on any elective surgery and visits to the physician are curtailed unless the ailment becomes a medical emergency (Ginger, Duncan, & Sweeney, 2013). When the unemployment is low, other factors figure in concerning the economy. Turnover goes on the rise because people can vie for position in the job market whereas skilled workers decline.
Competitive Analysis One of the best ways to analyze competition is to understand how competitors measure themselves. Reflecting on competitors’ strategy to date, pinpointing their strengths and weaknesses, and anticipating their future strategy will bode well with developing one’s own competitive edge. Measuring and Reconstructing Competitor Strategy Much can be learned of how competitors measure themselves through public accounts, the trade press, purchasing a product to disassemble it, and indulging in legal “espionage” by having employees infiltrate another competitors business with report backs.
Reconstructing a competitor’s strategy to see if it is works is a way to identify more accurately the competitors strategy to date. When evaluating a competitors resources, an organization should focus on the competitor’s production, marketing, financial, and management (Food and Agriculture Organization of the United Nations, 2013). Avoid Negative Points of View While undergoing competitor analysis, an organization must not have a negative opinion of the competition. Competitors can expand the market, increase motivation, and be just as responsive to the industry.
The goal in competitive analysis is not to ban corrupt the competition but to dethrone it. Competitive Advantage The below table is a good snapshot of generic competitive advantage. The facets include: strategic advantage and strategic target. Some of the phrases above may be difficult to grasp or not well-known. Low- cost position is offering low prices for its product to stimulate consumer emend and increase market share. Multi-segment is an attempt to gain customers from more than one type of demographic market for the same service or product.
Differentiation is using different types of advertising/ marketing to target the multi-segment blanket of consumers. Overall cost leadership is a strategy that emphasizes product or service offerings at the lowest cost per unit within the whole market. Focusing is for use with a particular segment of consumer and as the above table indicates, focuses on both uniqueness of the product or service and low cost position (Food and Agriculture Organization of the United Nations, 2013). Conclusion Both environmental scanning and competitive analysis are crucial to the success of any organization.
The hard-to-understand quote, “One cannot see the forest for the trees,” is simple to interpret. It means that one cannot see the whole situation because one is looking too closely at the details or is involved too intimately. In environmental scanning, the organization is looking at the forest DESPITE the trees. It is looking at the “big picture” to determine what the organization needs to be successful in general. In competitive analysis, the organization is looking at the trees in detail so that the forest may flourish, be robust, and bear fruit.