One of the business strategies that are commonly useful to organizations is the conduct of environmental analyses which would determine a business’ share in the marketplace. Basically, environmental analyses are also being complemented with the analysis of the organizational strength and weakness, and the opportunity and threat in the market and industry. According to the book, “Contemporary Strategy Analysis”, this correlating approach defines and determines the organizational role in the industry, and creates a framework to find: (1) the demand and competition, (2) the attractiveness and relevance of the market, (3) the competitive advantage of product, and (4) the key success factors (Grant, 2000). In this regard, this paper will discuss the conduct of Environmental Analyses in the perspective of Able Corporation.
Benchmark and Metric
The Able Corporation may enable its market operation by first benchmarking its product positioning in the industry. Second, it should also explore the performance of the market in which the positioning of power tools and cordless products can draw much relevance to consumers’ needs and identify the categories or classifications of consumers. Several available statistical data may be used to size up the market distribution which comprises the metric of market operation translated into the performance of targeted supply or volume of production.
In this connection, the benchmark and metric of the initial findings of both the industry and market trends basically rely on the consumer trend. According to the recent report of the National Association of Realtors (NAR), consumer confidence remains low in the near term until the gloom over housing begins to lift. In addition, falling oil prices in the second quarter will also increase the index average to 83.3% over the next three months (NAR, 2008).
In short, the NAR predicts that the consumer trend will show erratic patterns in realty market and households that are into home improvement, housing construction, and infrastructural development related-housing facilities. However, the two combined indicators in realtors and household are still as a result of American economy recession. Nevertheless the given percentage of 83.3, which, according to the NAR is achievable in the next three months, can translate the index into favorable opportunities.
Assessing Industry Performance
The US Bureau of Economic Analysis reported that: (1) economy will avoid recession, (2) business inventory is getting drained and there will be a small increase in production to replenish inventory in 2008, (3) business spending remains positive and exports continues to grow, (4) consumer spending will slow down due to loss in housing wealth, and (5) sub-forecast for 2008 is not a recession but a sub GDP par growth rate of 2.2% (Fears and Smith, 2008).
In this regard, assessing the industry performance would enable the Able Corporation to classify the segments of industry and market. In doing so, it would enable to gauge its production efficiency and performance that is equaled to the identified supply or distribution channels. In addition, the variables of production cost would earmark a discounted cash flow as a result of procuring raw materials when market demand is low and supply is high.
The framework in the conduct of environmental analyses, which is defined by political-economic experts as the environmental scanning to reckon with the making of an industry in a diverse geopolitical condition, would be the baseline parameter of the Able Corporation to shift its organizational capability into two vital aspects: (1) the transition of management to work within the organizational performance and efficiency, and (2) the determination of a market-led and consumer-based products.
In order to fully engage Able Corporation’s operational stability, the newly-hired Director of Strategic Planning and Analysis may concur and recommend the conduct of a market or industry feasibility studies, and complement it with the conduct of an organizational strategic planning which would review and determine the aspects of management capabilities and define its role in the industry.
Fears, K. and Smith, J. (2008). “Gross Domestic Products 2007 Q4: 1st Revision”. US Bureau of
Economic Analysis. Retrieved March 10, 2008 from http://www.census.gov/const/www/.
Grant, R.M. (2000). “Contemporary Strategy Analysis”. 4th Edition, Black Well Publishing.
Retrieved March 10, 2008 from http://www.blackwellpublishing.com/grant/4thedition/default.asp.
National Association of Realtors (2008). “Consumers Confidence-February 2008”. Retrieved
March 10, 2008 from http://www.realtor.org/research.nsf/pages/ecoindicator.
National Association of Realtors (2008).”Table Q1: New Privately Owned Housing Units Started in the United States by Purpose and Design”. Retrieved March 10, 2008 from