Strategic Environmental Scanning and Organization Performance - Assignment Example

TriCiclos Case Study Name: Student number: Professor’s name: Submission Date: Qn1a). TriCiclos’s Business model Ivey, (2015) the driving force on TriCiclos Business model lays its foundation from the founder who believed that one should live up for something. The business model entailed awareness creation in reference to disposal and consumption behaviors. Also, the model did come up with highly intricate waste recycling, transportation and classification network. The company’s model did look beyond waste recycling as it went further, to change the society’s behaviors and actions in reference to waste management. Qn1b).Reasons behind TriCiclos’s Business model effectiveness Ivey, (2015) the pioneers of the company, did look beyond the norm waste disposal and recycling strategies employed by other organizations. The company, did put in place strategic planning measures that did not only selfishly look into the company’s interest but the broad Chilean interests as it made some profits. The firm also, did partner with other stakeholders, most importantly to align its goals with the governmental goals in Chile. This is so as the article argues that for five years the company, had touched the lives of many Chileans and gained Chilean’s government support. Partnering with government not only ensure incentives, but also popularity. An example according to Schawb Foundation for Social Entrepreneurship, (2013) is demonstrated by Proplast firm in Senegal which re-sells, recycles and collects waste in Senegal. Partnering with national government and ensuring a broad-based framework steers dialogue fundamental in addressing Senegal’s development. Ivey, (2015) this same aspects explains efficiency in TriCiclos firm as it partnered with the Chile government. Using 53 recycling centers installed nationwide, “puntos limpios which meant, clean spots the company gained popularity. Also, the company, did partner with mega enterprises such as Walmart, Coca-Cola and Unilever increase gaining more strength from firms battling with waste recycling and successes in their activities. Qn1c). How is it different from or the same as for-profit companies that have a corporate, social responsibility or a sustainability strategy? Ivey, (2015) like, other waste recycling plants, the TriCiclos did recycle waste and also did look forth to make profits like any other profit maximizing company. However, the firm did so differently. From its initiation the company aimed at making real positive impact to the society and the people the company served. Adopted from TriCycles, TriCiclos name did refer to the triple bottom line concept which focus on environment, society and economic protection while making profits. The TriCiclos mission unlike other many CSR organizations did focus in ensuring sustainability is contagious. In attaining this, unlike many for-profit making waste recycling firms, the company did work from the society level by educating the community in modalities of solving waste problem. Further, TriCiclos did look forth to empower the producer and the consumer’s behavior to ensure they understood the footprint consequence of using and disposing various materials. Qn2. Schein’s Model versus TriCiclos culture and competitive advantage Raduan, Jegak, Haslinda, & Alimin, (2009) it is in the heart of strategic management pursuit to understand competitive advantage though, yet to gain a straight forward definition. According to the Resource-Based View theory, the drivers and fundamental sources to firm’s superior performance and competitive advantage are linked with their costly-to-copy and valuable capabilities and their resources attributes. Assuming that strategic resources are distributed across firms heterogeneously, and they remain stable for a period the link between sustained competitive advantage and firm resources is plausible to explain. To generate competitive advantage, a firm can be explained using four main empirical indicators. They are non-substitutability, inimitability, rareness and value. According to Madu, (n.d.) confronting leaders have a key responsibility in creating and maintaining encouraging and rewarding organizational characteristics collectively. In sustaining competitive advantage and performance, organizational culture is one of key player component which is also seen as a steer of a small company to becoming a great company. Schein theory defines organizational culture in three levels. Level one; behavior and artifacts houses the visible elements of artifacts surrounding us and our behavior. This level contains behavior patterns and manifestation of culture outwardly. Ivey, (2015) it is the tradition in TriCiclos to ensure they change the people’s lives by educating them on trash disposal subsequently altering their waste disposal behavior and consumption habits. Madu, (n.d.) level two is organization’s espoused values which comprises of values that cannot be seen. They include operating values and stated values. For instance Ivey, (2015) the TriCiclos company values in supporting how they value quality. This can be taken form the founders philosophy that a person need to live up for something unless he/she dies for nothing and an indicator that they value their customer. Madu, (n.d.) level three is assumption and beliefs. Culture is typically build from learned assumptions, beliefs and values which are shared and might be assumed during the organization’s successful life history. Such values are taken for granted provided that the firm’s members do concur to these assumptions, beliefs and values that led their founders and leader to conceive and implement the firm’s activities, and have been the drivers to success and can be termed as correct. Ivey, (2015) in TriCiclos, the firm believes in inter-networking. It is through such a strong network relationship either with clients, the government, other corporate bodies and or socially vulnerable population and academic institutions that the innovative business model has seen great milestone for years in Chile. , Qn3. Why has TriCiclos been successful in Chile? TriCiclos did realize the existing opportunity in Chile. Porter, (n.d.) Chileans society faces social unrest, mistrust, lack of opportunity and social inequity from the private sector. Despite the fact that in Chile the corporate sector has benefited and contributed to the development and growth existing social challenge remain crucial elements that significantly constrain expected growth expansion in the private sector. This is so as profit making business role in Chilean society are seen as corporate greed. Further, the Chilean private segment, often have rivalry relationship with the civil society and the government a fact which the TriCiclos did ensure they embrace as a growth opportunity, ensuring their competitive advantage is non-negotiable. Using the Schein’s model as Madu (n.d.) explores in level three the company has worked hard behind its founder’s philosophy, “living for something.” Additionally, TriCiclos did realize more gaps that the organization could maximize. For instance, there is few incentive provided to prevent waste generation with very little produced waste recycled despite the fact that about 90% of the waste is valuable and can be re-used and recycled. In addressing this, Ivey, (2015) TriCiclos, aim at addressing waste management system existing in Chile and change consumption habits among the people. With the use of easy to set up Clean Collection points (CCPs), and cheaper to produce as well as meeting the circumstances and needs of the local people compared to the traditional recycling points. These points are operated by institutions, companies, street waste pickers’ cooperatives or local communities of which 90% of earned profits are taken back to those firms thus providing permanent or temporary source of livelihood for some people who could not afford their livelihood. Also, business and individual all are welcome to drop their garbage to the CCPs which have 12 labeled separate containers. The company further, separates the garbage to 20 different materials. Thus, it is the idea of ensuring sustainable competitive advantage, while touching lives of the low Chilean community and remaining focused that has led to the TriCiclos stand firm and penetrate the market with firm grip to-date. Also, the fact that the firm is strategic, by who partners with the organization as well as having B-certification has led the organization live as commercial brand. According to AVINA (2010) annual report organization whose mission, activities and values align with the government agenda are seen to penetrate the market. The report in reference to waste management shows that every day millions of recyclable materials collectors flock the street to collect the waste so as to earn a living. Although, they play a greater role to the economy and the environment, this extremely vulnerable groups of peoples remain economically, politically and socially excluded. Ivey, (2015) TriCiclos in addressing the need for lowly in the society inclusion within their system and by creating sustained employment no reason could hold their growth back. Qn4a) What are the tangible challenges TriCiclos will be facing in its new venture in Brazil? In reference to the Department for International Trade, (2015) the economy of Brazil in 2014 realized 0.1% growth only. Falling commodity prices have hit the growth of the nation and impacted negatively on the consumer’s purchasing power following a 9% inflation as well as risen interest rates. Further, unemployment is on an increase with 8.1% recorded by May 2015 compared to 6.5% recorded late 2014. Although, this may affect a new business like TriCiclos entry negatively, the unemployment may help in strengthening the penetration of the company to the Brazilian market as the company creates jobs to the unrecognized in the society. This may mean that cheap labor is feasible during the penetration period although cost of production might be high following inflation and high interest rates. Despite the fact that Brazil leads as investment destination globally, corruption and bribery issues are rampant. Bribery and corruption is also common within the tax system increasing the degree of lack of transparency something TriCiclos has to battle with. These vices are an obstacle in executing businesses in Brazil despite the existence of strong legal framework. These may hinder TriCiclos penetration to the Brazilian market, limiting its achievement scope. Intellectual property (IP) is a requirement in Brazil to enter the market. Lack of adequate IP protection may lead a Brazilian trading company lose its market place quickly making it difficult to trade. A company entering Brazil market should have trademark registration and adequate patent protection. Unfortunately, IP processing may take up to 6-12 years which may delay the business planning to enter the foreign market in Brazil. Organized crimes are also common that range from drug trafficking to piracy leading to counterfeit products. Thus, for TriCiclos no doubt will have to battle its way in Brazilian via deep-rooted heap of vices that if not well analyzed may tint the company’s name and affect its credibility in Brazil. Qn4b).The risks involved in scaling up with their current business model TriCiclos Company need to realize that on scaling up, evaluation criteria will no longer be those applied in Chile. The business will be charged using traditional measures of already established firm, ongoing like economic value added, ROCE, profitability and revenue growth among other factors. Thus, it remains risk for an organization to push an option to attain a full-scale business just in the beginning especially where it means the organization will close other options. For instance, Monsanto did define the role played by its herbicide by rewriting it singlehandedly using genetically modified GM seeds attaining a full-scale launch. It did not however, retain other distributed portfolio options supplied between a range of ventures, experiments and ideas, rather chose a single innovation strategy and went for that which in turn on receiving negative response in Europe and the U.S. led to the collapse of the company. Thus, closing off options early during the business penetration or pushing other options to a full-scale business too fast may lead to poor outcome as well as being too slow in innovation strategy innovation option and taking too long to exercise it (Birknshaw, Ghoshal, Markides, Stopford & Yip, 2003). Another, challenge of using its model is that, Ivey, (2015) despite gaining popularity in Chile and having partnered with many other private and government linked organization as well as having grassroots attachment with the society in general it has not managed to have strong commercial brand, a fact which may gaining weaker as it enters a foreign country. Qn5. What are your recommendations for Gonzalo to successfully achieve TriCiclo's international expansion in Brazil? Ivey, (2015) TriCiclos can boast of its wealth strategic competitive advantage attained in Chile. However the fact that it has some weakness and faces threats in its progress requires to review some of its aspects prior to expansion in the international market in Brazil. Babatunde & Adebisi, (2008) a marketing system of any company ought to function within the forces of frameworks forming the environment of the system. The major forces on environment come from the external world which the firm or the executive might not have control on them. Any business need to carry out proper planning to ensure it can survive within the environment targeting to ensure it can manipulate the environment to ensure it positions itself in a line of market success. A business that enters a market without understanding the environment is likely to result into crises. PESTEL tool has been employed for decades as an environment analysis tool to ensure the business understands the market it fosters to enter and grow. Thus, TriCiclos can benefit by using this tool which stands for Political, Socio-cultural, Economical, Technological, environmental and Legal aspects to help in understanding how to better position itself to the new market and ensure growth in the foreign nation. Harrison, (2011) in addition to market research the PESTEL tool will help TriCiclos to review its business model in a manner to attract growth and development in the foreign country. Also, it will help the firm understand measures to put in place or be prepared to battle with ones in brazil such as legal aspects, political aspect, and cultural aspects to attract more partners, and investors as well consumers of the business idea. Understanding the degree of risk in entry to a particular country will enable a company to decide the modalities of entry such as franchising, licensing and joint-venture in high risk markets would be preferable compared to full-ownership. Ivey, (2015) the fact TriCiclos battles with brand commercialization adoption in Chile, is an indicator of greater battles in the foreign world. Thus Birknshaw, et al., (2003) it will be recommendable if the company in case it chooses to scale up its business model, still leaves more option to lean on to ensure they support the scaling process as the company enters the Brazilian market, grows and develops to a sustainable business. References AVINA, (2010). Sustainable Recycling. Annual report. Retrieved 12/5/2016 from, http://www.informeavina2010.org/english/reciclaje.shtml. Babatunde, B.O. & Adebisi, A.O. (2008). Strategic environmental scanning and organization performance in a competitive business environment. Economic Insights, 64 (1): 24-34. Birknshaw, J., Ghoshal, S., Markides, C., Stopford, J. & Yip, G. (eds) (2003). The Future of the Multinational Company. John Wiley & Sons Ltd. Department for International Trade, (2015). Guidance Overseas Business Risk-Brazil. Gov.UK. Retrieved 12/5/2016 from https://www.gov.uk/government/publications/overseas-business-risk-brazil/overseas-business-risk-brazil. Harrison, A. (2011). International Entry and Country Analysis. A lecture programme delivered at the Technical University of Kosice, UK. Ivey, R. (2015). Triciclos: The Challenge of Scaling Recycling in Latin America. Richard Ivey School of Business Foundation. Madu, B.C. (n.d.). Organization culture as driver of competitive advantage. Journal of Academics and Business Ethics, pp1-9. Porter, M.E. (n.d.). Shared Value in Chile: Increasing Private Sector Competitiveness by Solving Social Problems. Chile Full Report. Raduan, C.R., Jegak, U., Haslinda, A. & Alimin, I.I. (2009). Management, strategic management theories and the linkage with organizational competitive advantage from the Resource-Based View. European Journal of Social Sciences, 11(3):403-417. Schawb Foundation for Social Entrepreneurship, (2013). Breaking the Binary: Policy Guide to Scaling Social Innovation. Retrieved 12/5/2016 from, http://www3.weforum.org/docs/WEF_Breaking_Binary_Policy_Guide_Scaling_Social_Innovation_2013_2604.pdf Read More