Environmental Scan

Environmental Scan

Adrian L. Gadsden

MGT 498

March 11, 2013

Dr. Tug Gokaydin

Environmental Scan

Environmental scanning refers to the careful, diligent monitoring of an organizations internal, and external environments that seeks to detect early signs of opportunities, and threats that may influence the organization's current and future plans (The Law Dictionary, 2013). This paper will describe the internal and external environments of Dell and Apple. This paper will also lists the competitive advantages of each company, explain how each create value, sustain that competitive advantage, and finally explain how effective each company's measurement guideline are.

Internal and External Environments

The first step in an environmental analysis is to conduct an internal analysis. The internal analysis means observing how employees interact with each other and management, and how management interacts with other managers, as well as shareholders, and other staff. An analysis of the internal environment of an organization helps to determine the strengths and weaknesses of that particular organization.

The external environment of an organization are outside factors that affects an organizations day-to-day operations, and has a significant influence on its growth, and survival. These factors include customers, government, the economy, competition, and public opinion. An organizations external environment can be influenced by marketing, while other parts of operations may need to be adjusting. It is imperative that an organization monitors, and keeps a close eye on its external environment.

Dell

Dell was founded in 1984 by Michael Dell. Michael Dell, a pre-med student at the University of Texas at Austin, founded PC's Limited with $1,000 and a game changing vision fo how technology should be designed, manufactured, and sold (Dell, 2013). His concept was simple, by selling computers systems direct to his customers, it would eliminate the need for retailers and suppliers. The internal environment at Dell includes its SWOT, mission, vision, and leadership. Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in the market they serve (Dell, 2013). This is done by meeting the needs, and expectations of their customers by providing a high quality product with the latest technology, as well as exceptional customer service.

Dells competitive advantage is determined using a SWOT analysis. One of Dell's competitive advantage is that they sell directly to their customers thus cutting out suppliers and retailers. Dells computers are also built to order, based off customer specifications, so customers get exactly what they ask for. The external environment at Dell can be described using a PEST analysis. A PEST analysis is a scan of the external macro-environment in which a firm operates and includes political, economic, social, and technological factors (QuickMBA, 2013).

Politically there are still restrictions such as trade quotas, tax policies, tariffs, and political instability, when conducting business and Dell, like other businesses have to adhere to them. Economically it comes down to supply, demand, cost, and capital. If inflation is an issue it has the potential of affecting Dell and how and where they operate. Social issues depends on the taste and demands of the Dells customers. The demand for PC's will change according to educational and work requirements, so Dell has to be prepared and come up with pricing strategies and promotions that will still keep them competitive in the market.

In order for Dell to compete with other computer makers they must adapt, adjust, and accept new technological advances or risk losing their market share. Dell has done this by adjusting their prices to suit all taste and income levels. Dell uses a demand management process which is to sell what they have and they also have a good product lifecycle management system in place. Performance measurements assess how well an organization is performing according to the standards in the in the industry.

There are four common measurements guidelines and they are productivity, efficiency, utilization, and operation time. Dell utilizes each strategy very well, and the strategies seem to be very effective because in the last 20 years, Dell has become one of the world's leaders in technological innovations and are still continuously improving.

Apple

Apples