Free «Environmental Scanning» Essay
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Environmental scan offers a methodical overview of the external factors paramount to a business indicating whether the business is in a position to influence them or not. The factors are categorized in factors controlling demand, the input supply to the project or the organization, general policy factors, collaboration, and competition (Morrison, 2006). Environmental scanning also categorizes the factors on the basis of their positive or negative influence on business, and whether the factor can be influenced by the organization or it is there to be appreciated.
Basically, an environmental scan entails the identification of the influence on important factors in the environment. People usually complain with the inferiority of the negative factors organizations or some sectors produce within the surroundings. An environmental scan is meant to help people decide on the actions to be taken to help accustom oneself with the environment. Scanning enhances a positive feedback while giving insights on how to cope with the strong facts. The scan is a simple tool and it helps to acquire a complete view of the main factors, thus offering solutions to scattered observations.
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The paper will focus on the environmental scan of both the Pepsi and the Coca-Cola companies. Apparently, Coca-Cola and Pepsi are the chief competitors within the beverage industry and both companies aim to differentiate itself despite the fact that they produce a common product. Although the two companies are popular at the peak of existence, there is the need to develop a business strategy that will work in their favour, thus helping them maintain a competitive advantage. To attain a competitive advantage, measurement guidelines need to be enforced to ensure the effective strategic planning, as well as measure the efficacy of each plan. The main aim of the paper will be to examine the two cola giants to illustrate their internal and external environments and determine how they employ environmental scanning in their operations. Besides, their competitive advantage will be examined to uncover the creation of value, measurement guidelines, as well as the effictivness of the measurement guidelines used by each company.
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The environmental scan of the two cola giants will entail monitoring, evaluating, as well as delivering the information from the internal and external environments to the major stakeholders (Wheelen, 2010). In order to come up with an effective strategy to enforce and evaluate two companies, there will be the need to evaluate the results of the present performance.. The analysis will comprise of the natural physical, societal and internal environment. It is crucial for each company to come up with strategic directions to ensure success (Morrison, 2006).
It is possible to compare the two market rivals by examining their competitive advantages consisting of differentiation advantage as well as cost advantage. Cost advantage is comprised of organizations producing a similar product but charge a customer friendly price to attain competitive advantage. On the other hand, there is differentiation, when a company provides better services and products within the same market. According to Porter (2012), differentiation and cost advantage become a value creation when the capabilities and resources manifest into distinct competencies.
In its early stages, the Coca-ColaCompany employed differentiation techniques such as enforcing firm standards of mixture at the soda fountains to help produce a different product from other companies, thus being able to capture a large market share as compared to its competitors.
Presently, the strategy employed by Coca-Cola Company is to ensure high growth and maximize profits , in order to create value for stakeholders. This is attained by giving attention to the potentional value of the customers, enforce multi-segmentation strategies, drive innovation, maintain efficacy in their operation, and create high quality. The value and maintained competitive advantage of the Coca-Cola company comprises of business partners, customer relations, client value management, market leadership, strong brand portfolio, sales and distribution models as well as channel marketing (RetroPlanet, 2008). Moreover, the firm employ such measurement guidelines as managerial expertise, sustainable development and operating potential. The company’s market leadership allows it to make decisions on how to equal capabilities and strategies within their operating environment, thus assisting in strengthening subsiting business relationships as well as creating new ones. Developing capabilities and knowledge management facilitate the company in building client relationships by gathering information from client opinion studies and mutual attempts to create novel products and improve subsiting products.
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Cohesive and indepth data will be provided by channel marketing. By putting focus on sustainable development, the company centers on culture, plants locations, employees’ health and environment. The implementation of constant evaluation and control ensures the efficiency and governance of measurement guidelines. The relationship of the aforesaid aspects helps the company to establish performance standards, measure definite performance and evaluate real performance with standard performance.
Since its establishment, the growth of Pepsi has been exceptional and has shown constant growth in numerous ways similar to those of Coca-Cola. Nevertheless, being a major rival, Pespi requires to set performance objectives and goals as well as to substantiate guidance in order to sustain competitive advantage. Some of the most current performance goals encompass growing global revenues twice the real international gross domestic product rate, amplify market share of beverage and snacks, maintain scores of brand equity, persist in enlarging operating margins, in addition to boosting cashflows. However, in order to attain and maintain the performance goals, the company necessitates conducting an environmental scan. This encompasses definition of the environment, both macro and industry environment.
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The strategic plan of Pepsi is supported by primary value chain actions with marketing and sales, inbound logistics, service and operations. Sales and marketing are the company’s main competitive advantage. This is evidenced in most aspects including asPepsi constantly engages in advertisements with an aim of promoting personal brand attachment (Andy, 2012).
Pepsi uses various measurement guidelines that are intended to confirm strategic effectiveness and this include decision making and governance in order to promote sustainability. Besides, tracking and reporting, and the establishment of novel practices to aid in integration are employed in the sustainability chart. The chart comprises of the chief executive officer, leadership teams who oversees human aspect, performance, talent and environment, and steering committee (Andy, 2012). To summarize, companies that plans for success needs a measurable strategic cohesion plan as this ensures growth as well as detection of novel opportunities.
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The social environment encompasses institutions as well as other forces affecting behaviours, values and societal preferences, which impacts marketing decisions amongst consumers. The Coca-Cola brand is widely recognized and popular in the entire globe. The success of Coca-Cola company in international marketing is linked with product adaptation and variation. According to research, the company adapted to the external social environment in the year 2007, thus being honored with a silver award during a “Levate la Mano” commercial (Iberoamerican Advertising Festival). In order to meet its social preference, the company has ensured an exceptional preparation of its soft drinks.
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The Coca-Cola company has acquired various plants implying that it necessitates amplifying their shares due to the professional individuals in the management rank. This is due to the ability of the firm to employment MBAs with an aim of increasing professionalism levels.The firm consumers are individuals from various cultures and various income levels, and distributes its products to all people. Furthermore, the Sheraton and Pearl Continental, among others are unique clients who are classified as industrialists. Pepsi, the main competitor of Coca-Cola company has also ensured that, its task environment is favourable enough in order to ensure success (RetroPlanet, 2008).
As aforementioned, carrying out an environment scan is paramount for any organization. It offers a methodical overview of the external factors vital to a business indicating whether the business is in a position to influence them or not. Besides, it categorizes the factors on the basis of their positive or negative influence on business, and whether the factor can be influenced by the organization or it is there to be appreciated. The paper has examined the two cola giants (Pepsi and Coca-Cola) and has illustrated their internal and external environments and determined how they employ environmental scanning in their operations, as well as their competitive advantage.
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The Coca-Cola company has embarked on a strategy which involves giving attention to the value potential of the customers, enforcing multi-segmentation strategies, drive innovation, maintain efficacy in their operation, and create high quality; whilst the strategy of Pepsi is supported by primary value chain actions with marketing and sales, inbound logistics, service and operations. Unlike Coca-Cola, which makes certain implementation of constant evaluation and control to ensure efficiency and governance of measurement guidelines, Pepsi concentrates on decision making and governance in order to promote sustainability. In addition to tracking and reporting, and the establishment of novel practices to aid in integration is employed in the sustainability chart.To summarize, companies that expectsuccess needs a measurable strategy and efficient internal and external environments as these are the factors that ensure success.