No, any flourishing company can continue into existence and grow at the same time without having extremely well-researched and well-articulated goals and strategies. Even with a company that has come up with a solid proof plan, such a company must also continuously evaluate its effectiveness based on the external environmental changes. Use of a market check tool which helps with this evaluation is what is referred to as environmental scanning. Within this process of environmental scanning, executives and employees assist in gathering, analyzing and sharing of information for strategic purposes.
Environmental scanning is one of the key activities that initiate a firm’s strategic planning process. The environmental scanning process includes external factors such as technological, political-legal, economic and sociocultural. The process also involves the internal factors like value, rareness, imitability among other core internal competencies to come up with an effective strategy. The thorough analysis provides the building ground for an organisation to develop their strategic plan upon. Environmental scanning provides a business with the required energy to build upon, the opportunity to realize their weaknesses which they have to mitigate on, the opportunities that they need to capture, and the threats they need to watch out for. Multinationals like Microsoft and Amazon are still surviving today and reaping significant benefits still because they allocated time and their valuable resource to conduct environmental scanning. This helps them to adjust their strategic plans and align them according to the needs of the ever-evolving market.
A company like Microsoft Corporation from conducting environmental scans shows the existence of typical internal environments like the rate of employee turnover and talent retention, the morale of employees, and conventional financial planning. Some of the specific strategies that Microsoft would include in aligning the internal strategic plan would be ensuring hiring and retention of talent, this move is aimed to keep Microsoft at the forefront of innovation and technology. From Bill Gates’ (2014) vision statement notes that their vision is to develop innovative solutions that are accessible to every individual, and that aligns with the needs of the society. Developing innovative solutions that are universally accessible reduces the barriers for traditionally marginalized people and at the same time facilitates the unlimited usage of their capabilities. The vision statement has in itself initiated considerable effect on internal environments. External Environments for the giant corporation, Microsoft, include making significant advances in the area of technology to compete with likes of Apple and Google
The Internal environments for the other giant online company, Amazon, are more or less related to those of Microsoft. The company’s mission statement is one that can be considered a high reaching one, the mission statement state that Amazon wants to be world’s most customer friendly organisation (Amazon, 2014). The mission statement epitomizes the Internal Environment which is very specific to the mega online retailer. This is what drives strategic planning of the company.
The External Environments for the online retailer are mainly focused on the satisfaction of customers, the introduction of new vendors, introducing new products, and challenging their competition. For the world’s largest online retailer company, competition is mostly the biggest External Environment occasioned by Amazon’s extensive offering of different products. Amazon product range reaches almost to every facet of the industries available globally.
Understanding Competitive Advantages and Strategies
Like many other businesses that have gone to be successful in the world of business, the giant corporation, Microsoft rose the ranks to be among the top software and computer companies by implementing the correct competitive advantage. The Corporation has one of most dynamic competitive advantage strategy which includes expansion and increased stability. But the one strategy that the corporation used to raise quickly among the ranks was that for research and development. This particular approach ensures that Microsoft grew with unprecedented margins. According to business analysts Growth is a brilliant strategy, it ensures survival for longer compared to stagnated companies that are not expanding.
Microsoft has grown with time and has adopted more market-friendly policies that include the strong brand name, the extensively researched and comprehensive product portfolio, the strategy for inclusion, and the extensive diversity. On the other hand, Amazon’s competitive advantages involve strategies like technological innovation and business reinvesting. These strategies that the giant online retailer uses pays more focusses to the marketing aspect. These plans are mainly concerned about things like distributions, sales, goods pricing and such kind of activities.
The online retailer can maintain the competitive advantage by being among the few trusted online shopping malls. It offers the clients the convenience doing shopping online and the comfort of having goods delivered right to your doorstep. The company continues to offers a wide range of goods from many different vendors this ensure that their products are affordable. The online retailer also has specialized in among the fastest shipping mechanism to guarantee customer satisfaction at all times.
The two companies Microsoft and Amazon have been able to continually grow and sustain a competitive strategy which is based on creating value for their products. They have also created new and existing goods that have been used in the most common places like at schools, work points, or for play. Customers of these companies are always out looking for the newest innovation, be it the fastest computers, or the best prices these strategies help maintain customers. Microsoft, for example, has in the past few decades continually competed with emerging companies in the technology and innovation industry. The corporation has still maintained their mark in the sector. This speaks of the great environmental scanning and planning strategies implemented by the giant company. The have implemented strategies like making their prices affordable to their customers.
Measurement Guidelines
Measuring for strategic effectiveness is important to understand the impact of the policies and strategies the company is implementing. Microsoft uses a certain method to verify its strategic effectiveness called balanced scorecards. Balanced scorecard method is a performance measurement method. It projects a complete long-term, critical performance management methodology. This particular method defines, refines and improves the strategies. The corporation has to meet all the standards represented for a specified period of events in the firm’s gradual but steady development. The approach is challenging especially in relation to the gradual process that would involve cultural change.
The online retailer on the other hand verifies its strategic effectiveness based on feasible and originality of business model whose purpose for existence is satisfying the customers’ needs and whose motto built in changing market. Amazon uses a strategic plan of deed and a thorough approach for profit. This particular measurement guideline has enabled the online retailer to survival in the competitive online industry. Amazon began with books but have since expanded to now include almost all types of goods and services. Both Microsoft and Amazon are some of the most successful and most profitable business because of they can scan the environment, work towards creating value and sustaining very competitive advantages, and as such can verify the effectiveness of their strategies through various measurements approaches. The two companies have incorporated most of the essential elements of leading a successful venture into their strategic planning process. The two, in essence, have been able to exploit the strengths they possess and have been able to keep in pace with the changing innovations while always remaining ahead of their competition. Environmental scanning is the major reason for the success of this two companies while many have come and crumbled.
References
Levesque, B. (2016). Microsoft Environmental Scan | Brandon Levesque. Blogs.uoregon.edu. Retrieved 18 April 2016, from http://blogs.uoregon.edu/blevesquepr/microsoft-environmental-scan/
Lesca, N. (2013). Environmental Scanning and Sustainable Development. London: Wiley.
