Business Environment Scanning - Coinstar Company - Research Paper Example

Environmental Scan Introduction Businesses, do not operate in a vacuum; they often exist in environments that have specific characteristics. In the process of carrying out their functions, businesses have to be keen to ensure they make right decisions depending on their performance. Business environment scanning is a process that has to be strictly adhered to by business executives in order to determine the value of their strategies. Business environment scanning is an important component in the global environment analysis, this process is also called environmental forecasting, environmental monitoring or environmental assessment. While the internal business environment refers to the factors affecting the business from within, the global environment describes factors in the business external or macro environment (Holman 23). The business macro environment describes factors like competition, clients, industries, market, companies and even clients. 2. Environmental Scanning In the light of these, business environmental scanning in business can be described as the study and prospective intepretation of the factors influencing business performance. Some of these factors include economic, technological, social and political, including the trends that power businesses, industries and markets in entirety. At Coinstar Company, the process of environmental scanning should include such factors as emerging issues, trends as well as expectations of the various interest parties in the business. Issues, as featured in environmental scanning, often refers to the forerunners of particular business trend breakers. 3. External environmental factors as Opportunities or Threats at Coinstar Company Business environment analysis enables businesses categorize different factors as threats or opportunities, thereby devising strategies that enable them navigate the journey in their environment. The following are examples of elements that can be opportunities or threats to at Coinstar, depedning on how the company appraoches it Social trends: Social trends in business refers to activities that are participated in by the business in the course of its operations. These trends include marketing, supply chain management and cultural aspects. Social trends can be business opportunities depending on how the business reacts to it (Diven and Mark 57). For instance, when a business decides to change its marketing patterns and supply chains to feature various innovations and technological advancements, the development can be an opportunity to the business Technological developments: Technology is a significant factor in modern business, in the face of globalization and increasing competitiveness of business activities. Technology increases efficiency and effectiveness in the business in terms of quality of output. In this case, technological advancements and innovations are factors that can be business opportunities. Economic factors: These are elements that determine a business’ competitiveness in the environment that it belongs. These elements include, rates of economic inflation, unemployment rates, interest rates among others. The changing environmental factors are often seen as business threats, because they pose serious challenges to business’ strategies. A business is therefore expected to embrace changes that enable it keep abreast with these changes to remain competitive and efficient in its operations. Demographic Shifts: these are changes in the statistics and patterns about the population of a certain place or country. For instance, a country could be comprising of certain percentages for its males, blacks, young people among others. A change in this percentages is what characterizes a demographic shift (Bateman and Andrew 27). Demographic changes can be both an opportunity and threat to a business. For instance, an increase in the number of people in a certain age bracket can be an opportunity if the business’ goods and services end up being preferred by that particular group. On the other hand, an increase in another group, say the aged can result in a decline in certain products, which then becomes a threat to the business when it produces this goods. Political/Regulatory Elements: Political factors can be threats to the business if a country adopts policies that can affect business operations. On the other hand, a country that experiences political instability can also be a great business threat. Therefore, the business has to look for a different place or country experiencing peace in order to encourage customers to move and buy their goods and services for their various necessities. Cultural Trends: Cultural trends are the changes in people’s beliefs, customs and attitudes towards various aspects they consider important in their lives. For instance, people can change their perceptions about certain goods and services because of education, civilization or interaction with other people (Bateman and Andrew 37). This can be come a business opportunity if the change leads to their preference for those particular goods and services. A business therefore, start to make more of those goods and services to exploit the new market niche created. 4. Primary Competitive Issues and their Trends at Coinstar Competition is one of the factors that can affect the performance of the business according to the way it scans the environment and adopts approaches to enhance its effective practice. One of the fundamental issues that Coinstar faces as a company in its primary competition is demand; demand for a business’ products depends on their value and utility that clients derive by using them. Businesses are now using modern technological advancements and innovations to produce goods and services that enhance customers experience and value. Most businesses are adopting various technologies in creating awareness for their products through online advertisements in social media, where many people are said to spend most of their time. For this reason, Coinstar Company needs to invest in similar technologies in order to manage the challenge posed by other companies. At Coinstar, technology can be an important opportunity if it uses its resources to invest in key technological elements that can enhance its performance and effectiveness. In the same way, businesses that emerge in the business environment with those technologies and other key resources can be a threat to the business in terms of competitive advantages. In this understanding, businesses are expected to create important innovations and other approaches that can enhance the demand for their products by increasing their utility. 5. Strengths and Weaknesses of the firm One of the strengths that Coinstar Company towards enhancing its competition is having reliable human capital. In business, human capital is the most essential resource in the business; human capital is able to create and execute strategies and approaches to enhance business performance. In addition, sound management patterns is also another important strength; this ensures that work processes and business functions are well executed under minimal costs with maximum returns. On the other hand, poor resource endowment can greatly hamper business operations. For instance, inadequate finances in the business can render it unable to invest in technology, experts and other factors that enhance the effectiveness of business operations. In this case, to leverage on this challenge, a business has to ensure that it undertakes proper financial records and general accountability, this can increase lenders and shareholders’ confidence in business operations and practices, making them effective and financially stable. 6. BCG Matrix Coinstar company can categorize its products and services using the BCG matrix in order to determine the strategies to be adopted in their marketing. The BCG matrix provides an important tool by which a business can categorize its products before bringing them for sale in the business as shown. Fig 1. The BCG Matrix () From the business’ BCG matrix, Coinstar Company can leverage on its cash cow products, which are often high yielding in terms of returns. Coinstar Company therefore has to invest in these products and make more profits from them before they become dogs. 7. Summary At Coinstar Company, environmental scanning is essential in the process of creating competitive advantages for a business’ goods and services. Environmental scanning is therefore an activity that businesses cannot ignore when they are profit minded. It is important for business executives to understand that environmental scanning provides important ideas on their investment patterns and behaviors (McKitrick 34). Coinstar Company should undertake its business environment scanning in its internal and external environment; this is because, both environments are essential in the growth and development of all businesses irrespective of the industries they belong. After scanning its environment, Coinstar Company will be better-placed to engage new approaches to counter its rising competition. Works Cited Bateman, Ian and Andrew Lovett. Applied Environmental Economics a GIS Approach to Cost-benefit Analysis. Cambridge, UK: Cambridge UP, 2003. Print. Diven, Richard and Mark Shaurette. Demolition Practices, Technology and Management. West Lafayette, Ind.: Purdue UP, 2010. Print. Holman, David. The Essentials of the New Workplace a Guide to the Human Impact of Modern Working Practices. Chichester, West Sussex, UK: John Wiley & Sons, 2005. Print. McKitrick, Ross. Economic Analysis of Environmental Policy. Toronto Ont.: U of Toronto, 2011. Print. Read More