Understanding the external business environment will help Priam Rossa to make a huge step in its expansion plans. The environmental analysis provides a framework for developing strategic options in efforts to make a significant presence in the global markets. Due to globalization, the floral market is constantly facing major changes through factors that could be controlled by the organization and those that are out of control. This implies that the operations of Prima Rossa as it seeks to expand its roses retailing business will be influenced greatly by the environment in the territories it wishes to penetrate. The following analysis, therefore, explains the environmental factors that will have an influence in Prima Rossa expansion plans.
Political factors/Regulatory environment
The political environment of a country determines the ability to sustain the operations of foreign investors. This implies that it is imperative for Prima Rossa to look for territories that are more democratic with no incidents of frequent changes of governments that often disrupt organizations operations. Stability of the government is necessary for improving diplomatic relations among nations that in turn leads to incentives for foreign investments in the form of tax holidays and reduced tariffs. Political factors also influence the ability of the company to get operating permission and licenses since politics have an influence in the ease with which Prima Rossa will start operating in the targeted segments. Nations that have higher corruption cases from public officials make it difficult for the company to go through the process of registration easily since a large amount of money would be involved in bribing the officials which in this case would contradict the corporate governance of Prima Rossa. The firm, therefore, needs to consider engaging in transparent territories where the level of corruption is lowest. It is important that Prima Rossa understands the laws of other nations including employment and health and safety regulations that aim to protect the locals from adverse operations of an organization. The fact that every government would want its people’s welfare to be protected implies that the corporate governance structures have to work towards creating a sustained society. Prima Rossa has to identify the welfare benefits, minimum wages and additional laws as stipulated by foreign governments. Environmental regulations continue to be a major concern for governments with both national and international environmental laws focusing on the need to prevent business practices that pose harm to the ecosystem through pollution. While it is a corporate social responsibility to enhance the welfare of consumers and the society, it is imperative for Prima Rossa to consider undertaking initiatives that prove it a concern for the ecosystem.
Economic factors
Economic factors such as high import tariffs on imports are adverse for the company since they add to the operating expenses that could, in turn, reduce the net incomes for Prima Rossa. Factors such as high freight costs by the private sector in some of the nations as compared to others also lead to higher expenses for Prima Rossa since it adds to the export expenses that tend to reduce the net margins for the company. The implications of such costs is that they reduce the shareholders wealth thereby leading to loss of confidence among shareholders. Nations that are still developing or are underdeveloped pose threat to the success of Prima Rossa due to the limited support infrastructure such as storage facilities, modern road networks and poor shipment facilities that hinder the establishment of flower retailing business due to the perishable nature of roses. This means that Prima Rossa will have to consider penetrating markets such as the European, Chinese and the Indian segments where infrastructural resources are available hence the organization will not have to incur extra expenses trying to set up facilities that are the governments’ responsibilities. Inflation rates and high borrowing rates in territories a given company targets are also adverse for the business operations. Inflation is linked to higher wage demands by employees which in turn raises the cost of doing business. The cost of living as a result of inflation also interferes with the purchasing power of individuals since they are forced to lower the priority of buying flowers thereby lowering demand for the roses. High interest rates mean more costs of borrowing hence a determent to investment by Prima Rossa.
Socio-cultural factors
The factors include customers’ attitudes towards purchasing rose products. The majority of consumers especially ladies acknowledge the need to rely on flowers for internal and external decorations. Floral decoration is a growing social trend that gives room for opportunities in the roses retailing business. However, a major concern is the fact that sales fluctuate with seasons including Valentines, Mother’s day, Easter and Christmas. Other events that witness a high demand for the roses include situations where there are lavish arrangements during social, political, entertainment and sports events hence Prima Rossa could make bigger sales on such occasions. The seasonal fluctuations in sales imply that Prima Rossa will have to target segments that have a history of high demand for roses such as the European markets where flowers are not only bought on special occasions but are part of the daily experiences of people in the society. Flower retailing also requires highly skilled manpower with the capability of monitoring storage and ensuring that the flowers are in the right conditions to be purchased by consumers. Rose flower customers are always keen on key aspects of the flowers including the length, the color of the petals and the general appealing nature of the roses hence would not want a situation where their preferred retailer fails to deliver the quality they expect.
Technological factors
Roses are delicate products such that failure to constantly look for a way to lengthening their longevity and coming up with better hybrids would lead to losses. Due to the high competition and the changing needs and expectation of consumers with regards to quality, it is important that Prima Rossa learns new ways of improving production and distribution process. Innovations in production include the need to ensure seeds and plants have the potential of producing roses that fulfill market demands regarding quality and quantity. Such production innovations are accompanied by the need for quality irrigation and improvement in the controlled micro climatic conditions required by rose flowers. The implication of such measures is that they lead to the best quality roses that are key to edging out competition and establishing a competitive advantage in the global scene. The perishable nature of roses also requires innovations regarding logistics such that the shipment facilities have to ensure products for export land safe in their destinations. Post-harvest operations have to be considered in ways that breakages of rose stems and bruising of the petals are avoided so that the products reaches consumers in ways that eliminate customers’ complaints. The fact that the industry is much competitive requires that Prima Rossa establishes relationships based on trust and loyalty in order to maintain long-term relationships with all the stakeholders.
Works Cited
Ashfaq, Usman. "An Economic Analysis of Roses Cut Flowers in Punjab-Pakistan." The Journal of Animal & Plant Sciences (2014): 651-655. Document.
Dait, Jennifer. "Trends and Issues of the Cut flower Industry of Nueva Vizcaya." International Journal of Novel Research in Marketing Management and Economics (2013): 25-51. Document.
Reid, Michael. Trends in Flower Marketing and Postharvest Handling in the United States. Technical Report. Davis: University of California, 2005. Document.
