Red Flow Technology Ltd - External, Internal and Industrial Environment - Case Study Example

EXTERNAL ENVIRONMENT External environment refers to the factors outside the business that affects its productivity. These factors either affect the business positively or negatively. Some of these factors include; economy, legal factors, politics of the country, society and technology. The economy plays a big role of financing a new business venture. If the economy is steady the company has a better chance of becoming successful and attaining is goal. Red flow was unfortunate to enter the market during the 2008/2009 global financial crisis. New business venture should be run and conducted according to the rules, thus the law (legal factor).There are rules to be followed in starting a new business venture, e.g. registration. These help theauthority to keep track activities of the business. The business has a set of rules and regulation to follow and if not done its most likely to be penalized. The law of land ensures that the activities of the business do not affect the society negatively like in our case study there is the issue of carbon emission and its expect effect to the households. Politics of the country also interfere with the business productivity. If by chance the politics of certain country is not in good shape, this will affect the business negatively. But when it’s politically stable, then the business is affected positively e.g. more potential investments, the business earns its ownregular royal customers. The society is also a major external factor that affects the business. The society has to accept the product produced by the business and like it enough to embrace it and purchase. In the society, factors like, religion, age, sex contributes hugely in the society. I.e. each group of people in the society consume only the products they are comfortable, e.g. Muslim group cannot consume pork and its products, young generation are popular with high technology. Technology is also another factor. It determines the productivity of the business, if the technology is very high, then it’s easy to produce and efficient too.in this case in 2004, the firm decided to get equipment from a company they had been consulting, this was in the hope that it would improve in its Productivity. The firm also decided to join a government funded lab that provided them with mentoring and support to the firm. These lab had highly skilled people and extensive networks THE INDUSRIAL ENVIRONMENT These are the elements affecting the industry in which the business venture is coming up in. in this case, I believe the need to save energy is the primary goal. These are the factors outside the area of marketing which impact on the industry but cannot be influenced by the Market in effort including; market, Competition, consumers. Market, this is the receiver of the product. The market should be friendly to new products, i.e. the market should receive it positively .the market should be ready the product such that a revenue is earned. In our case the market is favorable for the product because the society is in need of some energy saving products. The market is also good for the product because there is already another similar product and the society will be eager to try something new and maybe more effective. Competition, this is a major aspect of an industry. In a healthy industry there must be fierce completion .These ensures that the company’s produce products that will fully impress the consumers. In our case study, Red flow has one major competition from ZBB Energy and Premium. Consumers, this is a very important aspect of an industry. Without them there would be no need for production. In this industry there is plenty of consumers considering there already exist a similar product in the market and also that people are interested in saving energy. Level of competitive rivalry This is the measure of the competition in an industry. In our case study, the competion is quit intense because the major competitor hasbeen in the industry longer and has definitely established a large number of royal customers. INTERNAL ENVIRONMENT This is the factors that are inside the business and affects it greatly. This are elements have Direct impact on the business. They include the 5 m’s i.e. management, money, manpower, Machine and material. Management is the body that controls the activities of the organization. It’s a very important organ of organization because without it the organization will be in chaos. In our case study we got a very strong example of management because Alex, one of the founders, has experience in the industry and is very capable of running the organization. Money is very important in running a business especially one that just entered the market. These finances can be obtained through different channel .e.g. own investments where the entrepreneurs uses their own savings to finance the business, loans from financial institutions like banks, grants from government, and sometimes friends and family also support the business by contributing towards the venture. In our case study, the brothers initially funded the venture but they had to seek government grants to assist in the production of the battery. Manpower this is all about the people involved the activities of the organization, i.e. the employees of the organization. Employees are the hugest determinant of the productivity of an organization. Employees have to be well skilled for the jobs allocated to them and in our case these is proved by the use of the skilled personnel’s from then government funded lab iLab. Machine, these are the primary requirement of production process. Without machine no production will happen therefore it’s important to make a huge investment on machinery even before commencement of the organization. In our case in 2004 they purchased a machine that was the initial of the of production. Material is the raw elements of production. It is important and very essential.it should be readily available. in our case study carbon happens to be the primary element and its available in the market GENERIC STRATEGY These are the approaches to strategic planning that can be adopted by a business in a market Or industry to improve its competitive performance. Marketing strategy is differentiation Strategy, focus Strategy and low cost strategy. Marketing strategy, is the approach where a business aims to develop and market unique products for different customers needs.in our case study, the battery system could allow householders to immediately reduce their domestic carbon footprint by a fifth through more efficient energy management. These increased Red flow’s own market. Focus strategy, is a marketing strategy in which a business concentrates it’s a resources on entering or expanding in a narrow market or industry segment. In our study case, Red flow obtains partners such as utilities and this exclusive partnership proved that reliability was a fundamental advantage to reduce exposure to competition and offer a differentiated value proposition. Low cost strategy is a pricing strategy in which a business offers a relative low price to stimulate demand and gain market shares. It’s usually employed where the product has few or no competitive advantage or where economies of scale are achievable with higher production volumes.Red flow and reliable w offered a low-cost, robust and reliable technology compared to competitors. Developing small systems reduced the cost of development with fewer raw materials needed and a lower degree of complexity. COMPANY’S ADVANTAGE The firm had several advantages. The firm joined a government funded lab that facilitated developing high technology industries like what Red flow was hoping to grow to one day. The lab provided mentoring and support to starters like Red flow and also provided them with highly skilled people. These resulted in Red flows shifting from being a business with promising technical characteristics to a business with an attractive number of investors Alex’s previous job as a consultant also gave them an advantage since he provided them with knowledge and expertise in redox flow battery technology. This suited the company well since one of them was greatly familiar with the industry In 2004, the brothers decided to acquire a new machine in order to help in production. Red flow was successful due to some major factors .e.g. the fact that the founders were qualified engineers, with masters and a PhD between them The founders had the same goals, shared values, shared motivations and complementary backgrounds. Read More