Task: Environmental analysis
1) Internal environment
- Use McKinsey 7s Model
2) External Environment
- Use PESTLE Analysis
3) Competitor Analysis
- Use Porter's five analysis
Sanitarium Food company promises to be different from other food companies of New Zealand. In this evaluation, the focus will be on the environmental analysis of the company, which includes both the macro, and the micro environmental analysis along with the competitor analysis. For the internal environment analysis McKinsey 7S model has been used. For external environment analysis, PESTLE analysis is used. Porter’s five-force analysis has been used in the Competitor analysis.
Internal environment of any organization is consisted of the role players who are close to the company and they directly affect the function of the organization. Most important factors of micro environment of any organization are divided into ‘soft’ and ‘hard’ areas (Hourani, 2017).
The 7s factors of the organization are
|Hard S||Soft S|
| Structure|| Style|
| Strategy|| Skills|
| Systems|| Staff|
| Shared Values|
Sanitarium Food Company has developed their strategy in order to achieve sustained competitive advantage. Their advertising strategies are sound and strong for long-term success of the organization. Structure, strategy and systems are considered hard elements which are easier to locate. The soft areas are harder to manage in spite of being the foundation of the organization. Sustained competitive advantage of the company depends on these factors (Song& Tsai, 2017).
Hard S factors:
Soft S factors:
The application of this model on the Sanitarium helps in understanding the alignment of each factors of the company. The review of which is presented below
|Strategy||Providing quality service in New Zealand||Aligned|
|Systems||Systems focus is on the customer support.||Aligned|
|Skills||Many specialized skills are found and few jobs are undertaken by the management||Aligned|
|Staff||Employee need is present in the company||Aligned|
|Style||Democratic management style||Aligned|
|Shared Values||Teamwork and trust among the employees||Aligned|
The macro environmental analysis on the Sanitarium food company focuses on the political, economic, socio cultural, technological, environmental and legal factors affecting the company.
Regulation on organic and GMO food, low labor standards and free trade agreements are the political factors that affect the food companies. Sanitarium is proceeding with its policy of not sourcing GM ingredients in their products (Chain & Bookable, 2017). This organization monitors the consumer’s response to this particular issue as the state governments have approved the expansion of Genetically Modified (GM) crops in Australia. They also maintain the Identity Preservation or IP process.
For the assurance of the consumers, the company goes beyond the food labeling content requirement and also utilizes the ‘non GM’ supply chain which is supported by comprehensive handling, auditing protocols and testing to satisfy the customer needs.
The success of this company lies on the fact that Sanitarium has changed the eating habit of the New Zealanders. They are the one who initially introduced innovative breakfast and soy foods which are healthy according to the demand of the people (Pulker, Scott & Pollard, 2017 ). Plant based food has been made trendy by this organization
Sanitarium uses advanced biotechnology to improve the potential quality, quantity and acceptability of their food supply. Several new biotechnological techniques are used in the supply of foods and consumer concern related to the product safety is taken under consideration (Chain & Bookable, 2017).
Sanitarium also acknowledges environment while making their decision around technology, energy resources and operational methods.
Competitor analysis helps in understanding the viability of any business. The market condition plays an important role behind the success of any company or product. For the competitive porter’s 5 Forces can be followed as the model (Song & Tsai, 2017). These forces include
There are many other food companies in New Zealand but Sanitarium maintains its position because of their organic and healthy food products.
Sanitarium is focusing on incorporating Biotechnological advancements in order to improve the strength of the suppliers.
In spite of potential new entrants in the food industry, this company is maintaining their position because of their authenticity.
This company has many loyal customers. High consumer rate functions as the major force behind their organizational success.
In spite of substitute breakfast products, their new and innovative breakfast meal ideas have helped in maintaining their success.
The micro and macro environmental analysis of Sanitarium Company shows that the company needs to work on the skill and style and their strategy requires to be more structured. The PESTLE analysis evaluates the present condition of the company and for further development of the company the 5 factors of Porter’s model need to be evaluated by the management of the organization to ensure future success.