BIZ202 The Business Environment

Answer

Introduction

The purpose of study is to examine the significance of environmental scan for business environment and environmental factors influencing the business. The business enterprise chosen for this assessment is Woolworths.  The first section of the assessment focuses on the concept of environmental scan, ways in which businesses conduct environmental scan and collect proper information about business environment. This segment also highlights on the kinds of factors that can impact the environment in which Woolworths operate.

Part A

Background of Woolworths

Woolworths is one of the biggest Australian supermarket chain that operates grocery as well as retail business. Woolworths has been highly vigilant about the business environment that surrounds it marketing management. The management of the company not only focuses on increasing its customer base and reputation in the marketplace but also keenly involves in environmental factors in order to prepare themselves for bringing about change in business environment and strategize accordingly (Woolworths Group. 2018). Woolworths strategy as well as objectives although varies from each brand, there are few that are common to whole business such as building new business growth, maximizing shareholder value and ushering in new growth era. This enterprise has strong ethics as well as beliefs in its working culture. However, this company acts according to certain forces for bracing themselves against enhancing competition and increasing consumer’s notion of money.

Environmental scan

Environmental scanning relates to the possession as well as utilization of information regarding patterns, trends, occasions and relationships within a specific enterprise’s internal as well as external environment (Babatunde & Adebisi,  2012). It indicates the procedure by which an enterprise monitor its relevant environment in order to identify threats as well as opportunities defecting their business. It has been especially used for investigating external factors which are interpreted as vital to success and impact the future of the company. These environmental scans are utilized for providing decision makers with the knowledge about current economic, political, social and technological context and recognize any potential long- term as well as short-term shifts. Overall, it is one of the vital component of enterprise strategic planning procedure and enhances its financial performance.

Importance of environmental scan for Woolworths

Environmental scanning is important for every business as rapid changes occurring in the environment which has huge effect on working of business entity. It aids the enterprise to improve the working ability for changing business environment in stable way. Apart from this it enables the enterprise to attain capitalize of business in early stages as compared to its rivalries. It also aids to find out qualitative information relating to environment for assisting strategist to find best strategist for the enterprise. Environmental scanning of internal as well as external environment of Woolworths is the vital stage to strategic formulation. Analysis of the internal environment facilitates to recognize strength, weakness, opportunities and threats of business. This internal analysis is done by adopting specific strategic tools in form of SWOT analysis. External environment analysis is classified into two types, including- macro environment and micro environment (Craig & Campbell, 2014). The macro environmental factors impacting Woolworths is analysed by implementation of analytical tools such as- PESTLE. The micro environmental forces affecting Woolworths is analysed with the help of Porter’s five forces.

Different ways in which Woolworth conduct environmental scan

The various ways in which Woolworths conduct environmental scan are described below-

Systematic Approach-Woolworths adopts this approach in order to collect information for the environmental scanning systematically. The information gathered relating to markets, customers and  changes in regulations directly impacts on the activities of Woolworths.

Processed- form Approach- Woolworths adopts this approach for using information in processed form that are available from various sources. When Woolworths utilizes information that are supplied by private institutions, it utilizes secondary data sources and information available in processed form (Smeltzer, Fann & Nikolaisen,  2012).

Ad- hoc approach- Utilizing this approach, Woolworths conduct special surveys for dealing with particular environmental problems within specific time. These surveys are usually conducted by Woolworths when it has to undertake special projects and devising new strategies.

The factors that influence the business environment in which Woolworth operate are political factors, technological factors and economic factors. The managers of this enterprise adopts various strategies in order to mitigate any kind of risk that occur due to these three factors.

Conclusion

From the above study, it can be concluded that environmental scan is vital for every enterprise as it facilitates to formulate effective strategies for business. Woolworth adopts different approaches for conducting environmental scan such as- Ad -hoc approach, systematic approach and processed form approach.  These three methods help Woolworths to increase profitability level and improve its business performance.

References

About Us - Woolworths Group. (2018). Retrieved from https://www.woolworthsgroup.com.au/page/about-us

Babatunde, B. O., & Adebisi, A. O. (2012). Strategic Environmental Scanning and Organization Performance in a Competitive Business Environment. Economic Insights-Trends & Challenges, 64(1).

Craig, T., & Campbell, D. (2012). Organisations and the business environment. Routledge.

Smeltzer, L. R., Fann, G. L., & Nikolaisen, V. N. (2012). Environmental scanning practices in small business. Journal of Small Business Management, 26(3), 55.