Solutions And Responses To Environmental Challenges In Business Environment

Part of the environmental scan is aimed at proposing solutions to the environmental challenges faced by firms. Using the tools and frameworks provided in the content of the subject, you must:
• Discuss general and historically relevant responses to the four types of factors which can influence the environments in which businesses operate
• Categorically and comprehensively respond with a solution to all of the environmental risks and challenges laid out.

Environmental Challenges

Business environment refers to the environment, which includes the internal and external factors in which it operates. These factors affect the company functions including employees, management, customers demand and supply and the business regulations. The factors that happen outside the business are termed as external factors. Such factors critically influence the internal functioning of the organization and leads to the various harmful challenges for the organization. Other than this, impact of recession was high on company’s profit.

Due to stiff competition, this created a major gap between mission of the company and decrement in results .In addition to this many challenges also affected the profitability which ultimately leads to the shutdown of stores. The major challenges faced by the organization are the changing needs of the customers, extensive competition and the changes in the social environment. Such challenges entail the need to hypothetically face the challenges and thus innovating the organization structures and methods to achieve the overall efficiency and ensures the survival of the organization (Edmunds, 2018).

Environmental Challenges

 In today’s era, external business environment critically affects the organisation. It highlights the micro environmental factors such as customers, suppliers, competitors, market intermediaries, public and the macro environmental factors, which includes economic, technological, socio-culture, political and legal, which is very complex in nature and thus, presents both challenges and opportunities. Certain strategies and framework are formed to overcome these obstacles, which hamper the growth of the business (Sherman, 2018).

 Other than this certain environmental challenges, which are faced by every business organisation, are Uncertainty of future, financial management, monitoring performances internally and externally, also considering market and technologies shift and restricted rules and regulations, maintain customer services, getting on to innovations, Product development are some of the challenges faced by the business organisations (Gleeson, 2018). There are certain technical encounters faced by human resource managers, due to some technological advances, which generates challenges for building up the organisation. Along with this, managing the competitive prices within the organisation is considered as a toughest task. In order to compete in the market the organisation biggest challenge is to maintain the quality of the product, which totally links with the customer’s satisfaction (Krapez, Sherlavaj & Groznik, 2012).

Solutions to Environmental challenges

Solutions to overcome the challenges faced by them are examined critically like Woolworth core business aim is to improve the stock turnovers and optimized network efficiency in the market, for this they have certain strategies planned for successful accomplishment of their long-term business objectives. To surmount the challenges they are extending their leadership in food and liquor. Woolworth is striving for building it competitive market position by product development in retail sector (Pierre, 2015).

They are also taking strategic move towards profitability through effective supply chain and focusing on overall development of the organisation. They are now more dedicated towards the customer’s perception, through this they are attracting new customers and delighting the existing customers to generate profit along with the building good relations. Through positive business efforts they want to establish leading value proposition. For this purpose, they are more emphasising on hiring the highly skilled local and international talents. Reduction in cost motto highlights the minimal wastage along with the fulfilment of company’s objective (Jimenez, 2015).

Solutions to Environmental challenges

 High quality of product and the competitive price structure attract more and more customers. Being flexible in nature, is the apt change made to the company as this fulfils the demand of the customers by delivering the fine quality of product and services with an objective of high cash flow and income generation. Focusing on product development is the solution for innovation, which improves the existing product by putting on to new ideas, abilities, and new technologies in an old product (Mitchell, 2014).

   Woolworth, to gain competitive advantage, they are adopting the strategy in context of uniqueness by products the diversifying its product line under one roof. As launching its leadership in food sector as well as liquor. Differentiation in product, which no one can copy, generates profit. Certain strategies are to be performed in such a way that it helps in facing competition with the other suppliers (competitors) in the market. Debating about the Woolworths relation with suppliers and investors, Woolworths has found to be committed into partnerships and trusts in establishing long-term relationships with them. As for their business or supermarkets their dealings with suppliers is important, thus the company ensures in maintaining good terms with these people. Woolworths established strong collaboration with farmers of Australia to ensure delivery fresh and high quality food to the people (Janda, 2016).

The past trends of the Woolworth states that the mainly focuses on customers, suppliers, and competitors value but in future concern they are more oriented towards CSR and sustainability context, which makes Woolworth more successful and will earn higher level of accomplishments (Sotiropoulos, 2017).  Likewise, Farming for future programmes were initiated by the company, which manages, monitor and will help the company in transforming the environmental performances.

Woolworth is also focusing on climate resilience by proactively responding and adapting opportunities. Along with this, Woolworth initiates with certain motives like reducing food wastage, and ensures by helping to manage waste of farms, in stores and at homes of customers by expanding farmer donation programmes, which allows stores to donate surplus produce to farmers to feeding animals. Other sustainable efforts were reducing plastic packaging, Animal welfare and energy efficiency, which in total made positive change (Brook, 2018).  

The above challenges and below, their related solutions concluded that Woolworth is now; more focused in reducing risk, protecting their reputation, looking after customers need, taking care of their shareholders on which their business depends on. Their aim is to have more responsible and sustainable business, which generates more and more profits over a period (Jones, 2015).

Relevant Responses to the type of factors, which Influences the Environment

 In relation to the above context, historically relevant responses made to the factors, which can influence the environment and the business critically and affects the working of the organization. It includes the social, political, economic, legal and technological factors, socio-cultural and the natural environment, which brings the challenges and the opportunities for the business. These factors affect the long run functioning of the organization.

• Economic factors:

The economic conditions of the country majorly influences the business in which it operates .It consist of changes in the government policy, distribution of income , inflation rate, development stage of the country as well as the restricted import and export policies has majorly affected the working of the Woolworth. The organization gets affected through such changes in the form of decrease in the demand and restriction on export leads to reduction in the profit of the organization. Increase in the inflation rate leads to reduction in the demand for the goods .To overcome such challenges the organization adopts the strategy that favours the government policies and does not hamper the growth of the organization (Anastasia, 2017).

• Technological factors:

Relevant Responses to the type of factors, which Influences the Environment

The technological advancements hinder the growth of organization as the workforce at Woolworth was not able to cope up with the changes and thus leads to the fall in the demand of the goods. There are also certain technical encounters faced by human resource managers, which generates challenges for building up the organisation.  To overcome such challenges the Woolworth focuses on providing the efficient training to the employees, which helps them to use the technological advancements and thus increase the productivity of the firm.

• Socio-Cultural environment:

Fluctuations in such factors majorly affects the demand of the business. It includes the changes in buying pattern of the customers, alterations in their taste and preferences, customs and traditions. These factors lead to fall in demand and thus decreasing the profitability of the organization. To overcome such challenges the Woolworth focuses on the changing needs to the customers and producing according to the taste and preferences. Its focus was to delight the customers and maintain its competitive edge over the other. The business focuses to deliver the product according to the customs and traditions of the country so that the customer achieves the overall satisfaction.

• Political and the legal environment:

The political and legal environment of the country influences the political stability, changes in the organizational structures and the changing attitude of the government and government intervention. Such changes create the fear for the firm to bring innovation and to abide by the laws made by the government. To overcome such challenges Woolworth abides by the law made by the government and restricts the use of plastic. The innovations made by the business were in accordance to the laws set by the government.

• Demographic environment:

It includes the changes in size of the family structure, age, sex composition of population, education levels. The demographic environment majorly affects because demographic constituents the people. It affects the demand of the products, as there is a shift in the composition of population and changes in the family structure. To overcome such challenges the business adopts the strategy of catering the needs of all the age group under one roof. The organization opens one store fostering to the needs of all the age group, also opens the grocery store under that roof to fulfil all the needs, and thus earns profit (Bennie, 2015).

• Natural Environment:

It includes the seasonal variations, changes in the climatic conditions, the natural terrain and soil conditions. Such alterations affect the differences in the nature of the product bought by the consumers due to the variations in the climate and season. The quality of the product does not remains same especially the food products gets majorly affected. In the hilly areas, the product becomes expensive for the consumer. The increase in the distribution channels also increases the price of the product. To overcome such challenges Woolworth adopts the strategy of maintaining and supervising the warehouses, which assures for the quality of the product. The business also focuses on reducing the distribution channels so that the stability in the price can be, maintained and thus does not hamper the growth of the firm (Mitchelson, 2018).

Such Industry specific factors highly influence the decision making of the firms. The Woolworth has adopted various strategies which further helps in improvising the decision making process. Such strategies have led to fruitful conclusions, which include alternation of the challenges, and achieving higher rates of return and proper allocation of the resources. These strategies have helped the form in attaining higher profitability and ensuring overall success of the organisation (Fobes, 2018).

 For a successful strategy implementation, an appropriate strategic formulation is necessary. It consists of certain guidelines and policies, pre- defined rules and responsibilities to each member, effective communication among the various levels of hierarchy and proper budgeting. This will help the organisation in smooth functioning and thereby achieving higher profits (Jones, 2015).   

Conclusion

From the above discussion, it is analysed that the business gets majorly influence from the changes in the external as well as internal environment. Externally it affects micro and macro factors, which comprises of individuals and environment. In addition, these factors critically influence the internal functioning of the organization and leads to the various harmful challenges for the organization. In Woolworth, Australian based company concern, it is concluded that the company has adopts various strategies to maintain its competitive edge over the others and thus ensuring the survival of the organization.

Along with this it further helps in improvising the decision making process. Such strategies have led to fruitful conclusions, which include alternation of the challenges, and achieving higher rates of return and proper allocation of the resources. These strategies have helped the form in attaining higher profitability and ensuring overall success of the organisation. Successively, they not only thought for their own benefits their also worked over improving sustainability. Now, they are focusing on 2020 targets, which are majorly on the corporate responsibility goals. The above adaption made to the environmental changes ensures success in current targets because they are adaptive in nature to changes made in the society.  

References

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Brook, B. (2018). Woolworth renewed focus on multi-billion dollar ‘impulse purchase’ market. Retrieved from: https://www.news.com.au/finance/business/retail/woolworths-renewed-focus-on-multibillion-dollar-impulse-purchase-market/news-story/5fea8b12626f520b8d3737f2bcb4cdb0

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Mitchell, S. (2014). Online strategy: Woolworth opens first supermarket without customers. The Australian financial review. Retrieved from: https://www.afr.com/business/online-strategywoolworths-opens-first-supermarket-without-customers-20140811-jy8vi

 Mitchelson, A. (2018). How Woolworths is winning over consumers. Retrieved from: https://thenewdaily.com.au/money/finance-news/2018/02/23/woolworths-half-year-profit-coles/  

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