There are two things that could affect an environmental scan; they are internal and external environments. Benefits can arise from doing an environmental scan on a business, which in turn can only add to the value of the business. Two companies will be covered; their internal and external environments will be described using an environmental scan.
What competitive advantages each company has and what strategies(s) each company is using. How each company creates value and sustains competitive advantage through business strategy? What measurement guidelines each company is using to verify its strategic effectiveness?
Also how effective are the measurement guidelines that each company is using? These two companies are Coca Cola and Wal-Mart. A environmental scanning (2011), according to Business Dictionary, “ 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. In comparison, surveillance is confined to a specific objective or a narrow sector. The whole process can be seen as information seeking and managerial learning for the business. The internal environment for Coca Cola is inside the business’s control.
There are some key attributes in this environment that include competence in production method, through management skills and successful communication. How can Coca Cola monitor the internal environments? They have to do an evaluation of the operations and take any action on the factors that cause inefficiencies on any stage of production and the consumer process. On the external side of it Coca Cola has to know that with the external environment it could affect the entire business, and the economy. Ups and downs in the economy, principles and attitudes from Coke’s consumers and demographic patterns greatly control the success of coke.
What is competitive advantage? Competitive advantage (2011), according to Business Dictionary, “ A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching core competencies to the opportunities. ” Coke has a tough marketing sense and a brand name that you are sure to know. Wal-Mart has been able to maintain a competitive advantage allowing them to use many strategies. Their low prices is a very good strategy, it seems to be the best strategy they have had to date.
Wal-Mart also treats their employees well, their aisles are well organized and clutter free. The technology that Wal-Mart uses helps them to stay ahead of the game, also there is the up to date inventory technology. Branding accounts for the highest percentage of Coca Cola’s value, its percentage is 80. Coca Cola has a strong global foundation In conclusion, by conducting routine checks on the business environment and keeping track of what is going on in the business will make a great impact on the business. A key element to a successful business is doing an environmental scan, understanding the risk and managing them appropriately.