Running a business effectively is connected to estimating the environment of operation. In fact, environment appraisal is the foundation of crafting a productive business strategy and achieving set objectives and desired levels of operational performance. It is motivated by the necessity to remain competitive and outperforms rivals in a constantly changing environment. Nevertheless, not all companies are equally efficient in conducting business environment analysis and recognizing the significance of this process for maintaining a competitive edge.
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What Is Business Environment?
Before conducting environmental analysis, it is imperative to understand the very essence of this concept and its elements. That said, the business environment is, in fact, an operational surrounding of a company or organization – a combination of factors and forces, which have a direct influence on business performance and operational outcomes. Some elements of this surrounding include technologies, developments in the industry and international economic environment, political and governmental changes, natural factors, and socio-cultural issues (Subba, 2010).
What Is Environmental Analysis?
Once a company recognizes that it is significantly affected by the external business environment, senior managers acknowledge that they should conduct an environmental analysis. This appraisal is defined as the investigation of all factors mentioned above to determine threats and opportunities for the company’s further development and drawing strategies for overcoming potential difficulties to achieve success (Subba, 2010). There are three dimensions of environmental analysis – macro analysis, assessment of the industry, and appraisal of the organization itself. Macro analysis is the evaluation of the general business environment both in a country of operation and at a wider scale, e.g., regional or global economy. The scope is determined by the company’s size and its involvement in economic relations. Macro analysis is paramount for identifying external opportunities for further development. Industry appraisal is connected to understanding outer threats. As for the organization analysis, it is necessary for obtaining apprehension of internal strengths and weaknesses (Harrison, 2014). Altogether, they contribute to developing a strategy for maintaining a competitive edge.
Google: Maintaining a Competitive Edge?
Google is building operational capacities to win the Indian market. The focus is made on powerful enterprises as the foundation for success. The core of the strategy is making Gmail, Google Docs, Google Drive, Google Cloud platform, and similar applications popular among the biggest companies in India. The objective of this initiative is to outperform competitors such as Microsoft and IBM and turn enterprise customers into the driving force of the company’s future development (Mendonca, 2016).
The proposed change is connected to environmental analysis in several ways. First of all, Google realizes its primary weakness: lacking experience working with this market and addressing its peculiar needs. That is why it involves local professionals for filling positions of sales executives at middle and senior levels. They are responsible for developing effective sales strategies, promoting Google’s products, and targeting necessary consumers. Moreover, the company recognizes major threats, i.e., the operation of competitors such as IBM and Microsoft. Here, it addresses the challenge with its significant strengths – the power of the brand and diversified products, which are applicable to satisfying business needs and solving business matters at all levels. Because rivals focus on small and medium enterprises, Google decided to target the most influential Indian firms and offer a wide scope of products and services to them. This decision is wise because there is no intersection of operations with competitors, as they work in different sectors. Finally, Google managed to take advantage of opportunities because of the size of the Indian market, which is related to the potential for boosting sales and development (Mendonca, 2016).
At the same time, Google introduced new products, which would attract ordinary users. They are Google Assistant in Hindi, YouTube Go, Google Station (free Wi-Fi stations in trains), and new options for using Google Play and Google Chrome (Chandran, 2016). This strategy is an appropriate example of business environment analysis due to the rate of India’s economic development and enormous economic potential. Because most influential companies are interested in increasing their share in this market, offering new products is a critical strategic decision. However, the Indian market is a turbulent environment because of the inability to guarantee that its growth potential will be sustainable in the future, especially keeping in mind the recent slowdown in China that was a success story and the unpredictable influence of Brexit on India’s further development due to trade ties with the United Kingdom (Anand, 2016).
Why Does It Matter?
Google’s experience is significant because it proves that adequate reaction to market changes and environmental analysis is the foundation for increasing influence in the global economy and improving economic performance. It is an appropriate example, which illustrates that a company’s strengths and weaknesses can overcome threats and maintain a competitive edge. Still, it is important to remember that Google’s practice can be carried over to a smaller scope. It means that just like the company recognized the potential of transmitting operations to India and launching new products in this market, smaller companies might become industry leaders by finding gaps in local economies or areas of potential growth and take immediate steps to operate in these spheres.
Anand, K. (2016). Four global challenges for Indian market are listed by finance minister Arun Jaitley. The Economic Times. Web.
Chandran, N. (2016). Google unveils 5 products for India market – including one that could go global. CNBC. Web.
Harrison, A. (2014). Business environment in a global context. Oxford, UK: Oxford University Press.
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Mendonca, J. (2015). Google to take on Microsoft, IBM as it looks at enterprise business. The Economic Times. Web.
Subba, P. R. (2010). Strategic management [Including skill development]. Mumbai, India: Himalaya Publishing House.