Question # 1- Create an environmental scan for the company indicating the most significant environmental threats and discuss how the company should respond to each threat to ensure that the impact to the business is minimal.
Companies and industries are constantly impacted by their surroundings. For example, “all companies operate in a macro environment shaped by influences [including threats] emanating from general economic conditions; population demographics; societal values and lifestyles; legislation and regulations; technology; and closer to home the industry and competitive environment in which the company operates (Thompson, Strickland, & Gamble, 2010, p.56). Companies have an inner and outer ring in their macro environment. Happenings in the outer or inner ring of their macro environment may occur rapidly or slowly, sometimes even without advanced knowledge or warning. However, the major forces and factors that can have the largest impact on shaping the strategy of a company will normally pertain to the company’s “immediate industry and competitive environment–the actions of rival firms, buyer behavior, supplier related considerations, and so on” (Thompson, et al., 2010, p.57).
All of the major influences and threats will be discussed below. This discussion will include how Sky Renovations Inc. (SRI) will respond to each threat to ensure that the impact on the business is kept at minimal. Economic Conditions
Today’s economic conditions are a great advantage for SRI. Because of the current foreclosure market, there is more property that is available to enable SRI to renovate, rent, and resale properties. There are so many different stages and types of foreclosures, including the pre- foreclosures, the auctions, and the real estate owned (REO) properties, SRI will have no problem finding its market niche (Caplin, 2004).
Population Demographics The current population demographics show that there are many” baby boomers” that are in the process of retiring. Some of these “baby boomers” have been life-long tenants. Some of these people will be first time home buyers and some will be in the process of purchasing another home, where a prior home may have been loss during the past economic turnover. “Demographics are not quite destiny but do exert a powerful influence on future housing demand” (Belsky, 2009, p. 99). SRI will make sure that population demographics will be carefully considered in all operations and expansions within the company. Societal Values and Lifestyles
Societal values and lifestyles will determine the very existence and expansion of SRI. The determination of how clients and customers choose to live will determine the profitability of the company. SRI must make sure that its core values, mission statements, and vision statements coincide with the society’s values and lifestyles for this specific era. A strategic vision will point SRI in the desired direction, plan SRI’s strategic path, and form its organizational identity (Thompson, et al., 2010).
Legislation and Regulations SRI must be very sensitive to the legislation and regulations that will be surrounding the foreclosure and real estate markets. These laws and regulations will determine SRI’s competitive advantage over other companies entering the market. Since much of SRI’s business depends on its ability to buy property at a discount and sell or rent this property at a discount or affordable price, SRI much stay abreast to and legislative and regulative changes in regard to the real estate and renovations industry.
Technology Technology is changing at such a rapid pace. SRI must keep the accurate, proper, up-dated computer equipment, and websites to make sure that SRI’s presence and availability is accessible to any client or potential clients. These technological up-dates must be done on a regular and consistence basis. This will give SRI a physical and web presence on a local, national, and international level.
The factors, issues, and occurrences that are found in a company’s industry and competitive environment should be considered the strongest of the external threats.”However, the factors and forces in a company’s macro-environment having the biggest strategy-shaping impact typically pertain to the company’s immediate industry and competitive environment-the actions of rivals firms, buyer behavior, supplier-related conditions, and so on” (Thompson, et al., 2010, p. 57).