Environmental Analysis (Essay Sample)

Environmental Analysis
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Introduction
Environmental analysis is a systematic process whereby the management identifies all the environmental factors in a business. They assess and analyze them to determine their impact on the performance of the business and develop a strategy of how to mitigate and take advantage of them. The analysis takes into account both the internal, external environmental factors (Dealtry, 1992 p 55).
There are various analytical tools that the management can use in the analysis (Cartwright, 2002 p 84). Among them are; the PESTLE analysis and the SWOT analysis tool. The PESTLE analysis tool helps in the analysis of the external environmental factors .i.e. Political, Economic, Social, Technological, Legal and Environmental factors. On the other hand SWOT, analysis tool helps the management to analyze the internal environmental factors, i.e. Strengths, Weaknesses, Opportunities, and Treats (Dealtry, 1992 p 55).
SWOT analysis
Existing competitors
MacVille’s company faces a threat of an upcoming competitor Nufix Inc; the competitor is shifting from instant coffee into espresso bean and machine market. The corporation has huge resources that would give it a competitive advantage. Besides, the company is facing a threat of the competitor, BeanEx, which has started importing espresso machines for their customers.
Potential allies
As a part of the company’s strategy to achieve its objectives, it must pursue a strategic alliance with a company that would make it more competitive. Potential companies include: Home espresso Traders, Ambrosia Coffee Roast, and Java Estate.
After the analysis of the entire three companies’ tender forms it was established that Home Espresso Trades would be beneficial to the company as it covers even the consumer market for espresso machines. However, the alliance would have a negative effect on the company’s consumer since Home Espresso is not solely focused on hospitality. Alliance with Ambrosia Coffee Roast, on the other hand, would help the company in reducing advertising costs as they would be shared. However, the company’s trend performance has not been good. An alliance with Java Estate is the most preferable, Java Estate provides the company espresso machines to clients for no charge; it pays the cost for the delivery and installation of the machine. Moreover, its trend performance has been great.
Summary notes
After the analyzing the company’s consultant’s report, meeting CEO and other managers, the following notes were made.
According to industry consultants report, there is a possibility of the introduction of a carbon tax on all energy intensive products used in commercial enterprises. Also, the report identifies planned changes in trade, whereby all tariffs on imported goods will be removed in line with the Governments free trade policy. The company is current machines will be affected by the carbon tax legislation if implemented (Cartwright, 2002 p 90).
There is also a prediction of a steady population growth rate. The company, therefore, needs to establish a comprehensive strategic plan that would focus on the expected population growth. The plan should lay down the future expansion procedures to ensure the company is always on par with the growth rate. (Cartwright, 2002 p 93)The report also identifies a change in lifestyle trend, whereby people are eating out more frequently. Moreover, there is a prediction of higher than expected growth in the economy. Economic growth raises the average income of the citizens; it lowers the level of unemployment and leads to improved public services. There is also a prediction that the Australian dollar will be stronger in the coming years against to the company’s major trading partners (Cartwright, 2002 p 84). The stronger dollar means that our products will be more expensive to our trading partners.
A new espresso machine is being developed. The machines are expected to use 30%less energy; also they have a more innovative and efficient heat changer. The machines will benefit the company in a huge way, especially in the reduction of running cost in the long run. However, the initial input for buying the new machine is very high (Cartwright, 2002 p 93). Since there is a possibility of a carbon tax legislation being introduced the company has no other option but to purchase the machines.
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