Environmental Scan

Environmental Scan

Introduction

Every business operates in a particular situation which depends on its nature. The environment, however, is of two kinds - internal and external. Internal environment includes forces and conditions within the business. On the other hand, the external environment consists of forces outside the business (Wheelen & Hunger, 2010). The primary components of the internal environment are employees, culture and its shareholders. While that of external are political, technological, economic, socio-cultural, customers, suppliers, competitors etc. Both of these types consolidates and form an overall business environment for any company (Carpenter & Sanders, 2009). Among all of these circumstances, the role of competition is pivotal. Companies employ each and every unit of their resources to beat the competitors in such cutting edge competition. Hence, this paper will discuss the environmental scan of two companies - American Airlines & Wal-Mart.

Discussion

American Airlines

One of significant competitive advantages that American Airlines have is its computerized reservation system. As a matter of fact, after the implementation of SABRE system, it left many of its competitors like United Airlines far behind. In addition to that, American Airlines is among the top cost leaders in the airline industry. Its cost per-seat mile is lower than that of its competitors due to firm value chain.

In order to measure the effectiveness, American Airline has many tools. These tools, however, are designed according to the criteria of the airline industry. Most of this measure are related to cost and volume, but also includes some qualitative measures, as well. One of the primary measures is the available seat mile, this measure the capacity of airline. Furthermore, for production it has revenue per mile, then comes the load factor, cost per seat and so on and so forth. Most of this measure is related to cost. In ...