Environmental Scanning: Brasco Inc.

Environmental Scanning: Brasco Inc.

Background of the business

Brasco Inc. is a soap manufacturing unit. From the past 10 years the company has upbeat products and upbeat profits in the US market in which it is operating. The company's target market is lower class and middle class income segments. The current financial crisis around the globe and especially in US has resulted in constraining the operating activities of the company. The profits are going down, sales target becoming unachievable and costs are rising on monthly basis which resulted in difficult times for the company. Due to loss in production, Brasco Inc. is losing the business to its competitors. The company is unable to employ advance and efficient production techniques and technology. From the past two years the company's profit is under constraint from external factors. In the last quarter the company made loss. The management hired me as a consultant in order to ascertain the problems which the business is facing currently and how to overcome this issue.

Environmental Scanning

The environmental scanning is observing and analyzing the external factors which affect the business activity directly or indirectly. It covers all the influences which affect the performance of the business externally (Olamade et al, 2009). Peace and Robinson (2000) has divided the external environment into three areas

The domestic and international political, economic, social and technological forces.

The competitors of the industry.

The stake holders of the business including suppliers and customers.

Important Factors

The factors which are important in decision making process are economic, technological, competitive, regulatory and social. Social factors include demographic shifts and cultural changes. Technological factors include changing technology, impact of technology on the customer value and electronic business technologies. Competitive factors include alternative competition forms and small businesses producing the same product at a lower cost. Regulatory factors include the taxation policy, the business competition policy, laws affecting marketing mix decision and company policies. Economic factors include macroeconomic conditions and consumer income(Kerin et al, 2010).

The factors which will impact the most are technological, economic and competitive and regulatory. Technological factors include shift towards more efficient production methods mostly towards those methods which are used across the industry. If the company didn't made timely shift towards employing a competitive technology it will definitely loose to other people. Economic factors include macroeconomic conditions and resource allocation of the consumers. Continuous scanning of macroeconomic variables and shifts in consumer demand pattern and the level of income, are necessary for a business, so that it can adjust the operating activity accordingly. The economic cycles of boom and recession must be examined closely in order to make timely decision making regarding future business strategies. Competitor scanning is also the most important factor. Companies should keep a track of the competitor performance and then follow the best practices in the industry or try to achieve more than that. Regulatory factors in which affect the business are the stringent fiscal policies adopted by the government during the recessionary phase, restrictions on the financial sector regarding ...