14 Jun STR 581 Week 2
Environmental Scan
1
Environmental Scan
6
Environmental Scan
Robert Gil
STR 581
10/23/2017
Claudia Duranceau
Introduction
In the Foodservice industry that are many organizations providing all essentials required to run a reliable and stable environment. Compass Group USA is an organization that provides foodservice and support services to corporate cafeterias, arenas, museums, award winning restaurants and other related organizational needs (“Who We Are”, 2017). Although it is an international company providing their services in over 50 countries and over 50,000 locations, the U.S. branch began in 1994 when it acquired Canteen. Compass Group has been around for over 75 years and it continues to grow each day (“Who We Are”, 2017). One of the reasons it has been successful, it’s because Compass Group scans its environment and adjust accordingly in order to stay competitive and profitable for the sake of its shareholders.
Environmental Scanning Strategy
Organizations are always encountered by opportunities and threats. Environmental scanning helps identify those areas. In this instance, Compass Group environmental scanning needs to collect data about their organization and its goods and services and then collect the same about competitors in the same or similar shared markets (“Strategic Planning: What Are The Basics Of Environmental Scanning?”, 2012). The information will then be used to adjust their plans and strategies to continue to be competitive and profitable.
An important step in environmental scanning for Compass Group is to learn how government affects local businesses and how laws and the economy stand in any new possible market. Factors such as population and the size as well as the demographic where the new location should be established (“Strategic Planning: What Are The Basics Of Environmental Scanning?”, 2012). All these different factors are important because Compass Group can learn how their competitors are handling specific issues in the current local market share.
External Environment
An organization can be affected by the external environments. These types of factors are beyond the reach of an organization because the business can lack function from the effects of these elements. Some factors can be addressed by adjusting the marketing strategy, but other may require more drastic adjustments to be in compliance. Factors such as customers, government, economy, competitors and public opinion are considered the external environment (Root III, 2017).
Customers can be influence by making changes or redirecting marketing strategies to regain customer confidence. Ultimately, it is best to know and understand the customer more closely because this will help you influence them in obtaining the services Compass Group offers. On the other hand, government can become rather costly. Because of regulations in State and Federal laws, these can affect the cost of doing business. Compass Group has set pricing for their services and it guarantees their services at the cost agreed upon signed contract, but the profit margin can be drastically reduced if government enforce new legislation that would cost money to get up to standards.
Profit margin is also connected to the economy. Compass Group must constantly review and monitor changes in the economy. For example, avocados and meats have recently been affected by the weather’s damage to land, therefore their prices have sky rocketed. These changes may affect temporally, but hey can last longer than expected and the business will have to adjust how it serves its clients if there is no room for adjustment. But competition can also affect the way the business will need to adjust their pricing (Root III, 2017). Open markets where competition is minimal might be ideal to startup new locations, but for the most, it is what happens to the competition that allows the market share to shift. Competitors may be affected from public opinion. Something drastic could have taken place within the organization and clients do not want to deal with organizations that have negative impact in partnerships (Root III, 2017). Therefore, public opinion is important to upkeep because it can affect the way new and current clients view the organization.
General & Operating Environments
PESTEL analysis refers to the six segments that are within the general environment of an organization. Political, Economic, social, technological, environmental and legal are the segments for each letter of the analysis (“The Elements Of The General Environment: Pestel Analysis”, 2017). For Compass Group, the political can refer to taxation and tariffs changes for importing or exporting of goods used each day such as fruits, vegetables. Any additional fees paid can affect the bottom line.
Economic factors can be driven from how the GDP adjusts each day or how the unemployment rate fluctuates. But it can also refer to as how much money or cash flow an organization has to use for services and this can affect how new businesses are acquired, but also how current businesses are lost due to lack of cash flow. Social factors are those that derived from trends whether it is from age, ethnicity or cultural status. Compass Group has been successful at functioning in a large demographic area and continues to grow.
Technological factors are those that as new technology becomes available, organizations promote the use of them and sometimes are connected to the environmental factors which can put a business at a loss if the competition is offering a more earth friendly use of technology alongside their business. But also following the legal factors such as safety, employment rights and healthy work environments are examples how well an organization will develop public relations in the long run.
Conclusion
Environmental scanning reveals what the competition is doing and it helps the organization develop strategies to better themselves as well as to stay in competition s well as to stay profitable. Compass Group continues to grow and acquire new business and as long as it is growing, it will have to continue examining its external, general and operating environments in order to maintain a competitive edge among its known rivals. Applying technology and reviewing data, are crucial to a well establish footing for the future and with the strategy building and adjusting, Compass will continue to have success.
References
Clayton, J. (2017). The Five Stages of the Strategic Management Process. Retrieved from
http://smallbusiness.chron.com/five-stages-strategic-management-process-18785.html
Compass Group Mission & Vision. (2017). Retrieved from
Root III, G. (2017). Five Components of an Organization’s External Environment. Retrieved from
http://smallbusiness.chron.com/five-components-organizations-external-environment-17634.html
Strategic Planning: What are the basics of environmental scanning? (2012). Retrieved from
https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/cms_021670.aspx
The Elements of the General Environment: PESTEL Analysis. (2017). Retrieved from
Who We Are. (2017). Retrieved from
https://www.compass-group.com/en/who-we-are.html
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