Contemporary business cannot afford to ignore the environment in which they operate. To navigate this vast and ever changing landscape, businesses must keep a keen eye on the external factors that influence it. Customer behavior, government regulatory and economic policy, competitor strategy and public opinion all impact on a firm’s success. The environmental scan report is an effort to identify these factors and propose solutions to the risks they pose.
This assessment serves to collect data about a firm's environment in one places:You will work individually to identify any relevant information about the environment of a chosen organisation. You must choose an Australian firm of appropriate size and view it through the lens of theories and frameworks identified in this subject The development of the environmental scan must incorporate the following elements
Analyse those environmental factors, making reference to an appropriate volume of external sources (i.e. (Articles from your private study), to explore challenges to firms a Present your chosen case study firm, making reference to several external sources.
ENVIORNMENTAL SCAN REPORT
Environmental scanning refers to the ever-changing landscape business environment, which is influenced by external factors of the business. This process is not only helpful for scanning the different external factors like government regulation, customer behaviour, economic policy, public opinion and competitive strategy but also help in developing solutions further. In this assignment, an Australian electronic retail organisation is chosen which is associated with their business all over New South Wales. The company is known as Bing Lee and famous in Australia because of its useful role in Retail Industry and thousands of customers all over Australia.
Bing Lee is founded in the year of 1957 as a private retail Organisation in the New South Wales. This electronic retail organisation is spread all over New South Wales with approximately 41 stores. Among them, 13 stores are franchised. The annual turnover of this local organisation is about 490 million dollars (Binglee, 2018). Initially, the business started as an electronic repair business in Fairfield New South Wales after that is transformed into an electronic product retailer in all over this region. The founder of this business Bing Lee died in the year of 1987 and currently his grandson Lionel Lee is the CEO of this company. The electronic Technologies are highly priced from the beginning of the company. Therefore, this organisation was aiming to introduce more affordable electronics to the Australians from the last four decades.
Political factor- the revenue and profitability of Bing Lee can be affected by government policies and regulations. Political stability can give better results and the change in the political power can effect on the sales and supply chain management. The current political scenario in Australia is stable with little or no turmoil in legislative changes or trade relations with other nations (Yunna& Yisheng, 2014). In this context, the political environment can affect the retail business similarly.
The Commonwealth of Australia is a Federal Stated including 2 territories and 6 states based on a governmental democracy. It is a liberal nation, which fits the Commonwealth and is acquainted with the British ruler as its sovereign. The democratic nature of the political environment helps to bring stability and peace within the country and its people. It has a positive impact on the business deeds of Bing Lee. The positive and stable nature of the political environment encourages domestic and international investors supporting business growth. Therefore, Bing Lee is in a favourable business environment (En.portal.santandertrade.com, 2018). Moreover, Rastogi & Trivedi (2016) commented that the country is a member of the World Trade Organisation and it manages a strong relationship with the US (United States). In spite of the stable and safe political environment of the nation, it is criticised for a number of issues such as failing to protect human rights. While operating in the country, Bing Lee must take care of the human rights of its employees and customers for having a positive attitude from the stakeholders. The Justice Minister of New Zealand has criticised the deportation law of the nation. It may have negative impact on Bing Lee. Being a Chinese company, Bing Lee can be removed under the Deportation law if it becomes involved in any kind of unethical, illegal, or criminal acts.
Economic factor- For the context of trading, the economic factor is essential because the sales and profit of the organisation Bing Lee is dependable on it. In fact, the economic growth in the Australian market will help this organisation in gaining more profitability (Ebrahimi & Sawyerr, 2016). Australia has displayed constant growth since the last years of 2001-2011 even during the recession. The national economy has experienced 26 years of continuous economic development. Thus, it possesses one of the top positions of the developed world and the 13th biggest economy of the world. The nation has significant potential in the retail, wholesale and other sectors as well that has a constructive impact on the business growth of Bing Lee (En.portal.santandertrade.com, 2018).
Figure 1: the Economic outlook of Australia
(Source: Focus Economics, 2018)
As per the above data, it can be stated that the economy is growing steadily through factors like inflation rate, public debt and exports have increased in 2017 compared to previous years. This is going to have a negative impact on the retail industry as a retail business depends on the quality of life people is living. Economic improvement is seen through the mentioned factors are creating issues in customer buying power. However, the Australian Treasury foresees a growth of real GDP of 3% in 2018-2019 expecting household depletion to recover following a constant consolidation in the labour market of the nation (En.portal.santandertrade.com, 2018).
Figure 2: the Economic condition of Australia
(Source: En.portal.santandertrade.com, 2018)
The GDP growth rate in 2017 is 2.2%. The economic condition continues to be influenced by the government and business spending. However, the consumer sector and households struggle amongst low earnings growth. It may have distrustful impact on the growth of Bing Lee, due to the low purchasing power of consumers Moreover, the Australian economy is rapidly depending on China and hence, the nation keeps an eye on the investment made by China (En.portal.santandertrade.com, 2018). Therefore, as a Chinese company, it is an advantage for Bing Lee to run their business in Australia without worrying much. The dependence of Australia on China will bring positive impact and support to the business of Bing Lee.
Social factor- the social factors include the demographic changes and the customer behaviour related to the organisational products and services. In the served areas of Australia, this organisation already able to create an impact by providing personal life services to their customers. Understanding the preferences of the customers and providing the most affordable price then other retailers of Electronics is becoming one of the strengths of this organisation.
Australia is such a country, where people like to live in because of its wealth, health, education and quality of life. Hence, there is a good chance for Bing Lee to design and sell electronic products that match the lifestyle of Australian people. It will have constructive impact on the firm. As compared to other developed countries, Australia has a lower population, 22.9 million. The country has a notable number of universities that attract global students especially from China, Nepal, India, Vietnam, Colombia, Malaysia, Brazil and Vietnam each year (Carson & Kerr, 2017). Thus, it provides an opportunity to Bing Lee to innovate and develop consumer electronics that can make the lives of these students easier as they live far away from their homes and families. Thus, it will bring a positive impact on the sales and profitability of the firm.
Moreover, the consumer electronics market in Australia is experiencing growth every year influenced by innovation. OLED TVs have become a favourable group within consumer electronics. In the current year, the manufacturers are putting greater effort into penetrating televisions in the nation. Consumerhas become more inclined toward online stores for purchasing their electronic goods (Euromonitor.com, 2018). Hence, considering the current trends, Bing Lee can develop its marketing strategy and offering products to the customers based on their preferences and expectations. It will drive business growth of Bing Lee positively.
Technological factor- the changes in technology is hugely impacted on the supply chain and customer service of this organisation (Fleisher & Bensoussan, 2015). Except for the 41 stores all over New South Wales, the organisation also offers E-Commerce services through their websites. The use of new technologies for online payment and use of digital technology as part of the promotional and marketing techniques this retail organisation able to adopt additional advantage.According to Arnold (2018), Australia is one of the most developed countries of the world not just in terms of the economy, but in terms of technology too. It is famous for acquiring latest technologies at a quicker rate as compared to other developed economies. The country has shown huge growth in this filed over the last many years. It has a positive impact in all the technology-driven industry and so as Bing Lee. The company can bring innovation in its business activities adopting the latest technology. Purchase of technology is expected to increase 4% in the current year to $63 billion and in 2019, $65 billion. Local organisations are spending on technologies for fulfilling the increasing demands of the customers. Computer, software, cloud, artificial intelligence and tech consultant services are possible to influence the investment that should lead to more designs and innovations.
Thus, by taking advantage of this growth and development, Bing Lee can better equip its business and customer services with advanced technologies and machinery. It would help the firm to develop a better connection with its customers and provide the products in accordance with their technological needs and demands for gaining their satisfaction and trust. Hence, the overall impact of technological development on Bing Lee is positive.
Environmental factor- The environmental factors are also effective for this little organisation for the concern of maintaining sustainability. In fact, for this like other retail organisations the use of renewable energy, environmentally friendly packaging and waste reduction is part of the policy of this retail organisation.
Australia is one of those countries that are known for their natural beauty. It has mountains, stunning beaches and forests. The country is also renowned for its wonderful biodiversity. By focusing on protecting this bio-diversity, Bing Lee can acquire positive impact on its business operations. Over 1 million species of animals and plants are there in Australia that attracts millions of tourists to the nation every year. Protecting this environment and beauty is the responsibility of all the Australians including the business organisations. Therefore, Bing Lee must be concerned with reducing environmental impact created by its business for developing a positive image in the marketplace. To reduce the harmful impact of business industries on the environment, the Australian government has imposed regulation such as the Environment Protection and Biodiversity Conservation (EPBC) Act (Chandler et al.2017). For doing business effectively, Bing Lee must follow these rules for improving its company image and efficiency and gaining encouraging impact as a whole.
Legal factor- Finally, the legal infrastructure is associated with various regulations and policies used under this electronic retail organisation (Larivière et al. 2016). The rules are related to the business procedure and the employment factors of the organisation. In fact, the use of regulations is also important for maintaining the pricing of the products for managing the competitiveness of the market. For ensuring fair business for both companies and consumers. Australia has rational trading laws including consumer laws and competition laws. The Fair Work Act 2009 is the major piece of regulation that controls employment within the nation. Following this law, Bing Lee must conduct its business activities fairly, so that it does not violate the law and gain a positive impact of the government and other stakeholders. Similarly, privacy legislation deals with the way businesses protect the personal information of customers.
Therefore, to run a business without any legal risk, Bing Lee must follow all these regulations throughout their business practices. It will help the firm to grow its business without any scandal and gain positive impact on brand image and publicity.
In light of the above discussion, it can be concluded that the Australian electronic retail organisation Bing Lee is serving the New South Wales area of Australia. For the local customer, this organisation is famous and best known for their moderate pricing with down to earth customer services. From the environmental scanning of this organisation, it has been found that due to the changes of political-legal and economic structure the organisation affected. In addition to that, the competitors in the market and the changing behaviour of the customers can also influence the business procedure of Bing Lee.