Cloudbiznet Environmental Analysis

Cloudbiznet Environmental Analysis

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Environmental Scanning Strategy

For any given organization, environment refers to external factors that might influence its performance. Environmental concept can be broken into: 1.The general environment which consists of overall societal trends and events such as technological, social and economical trends and 2. The industry environment composed of several organizations that compete with one another through providing similar goods and services. Environmental strategy, therefore, is a process that systematically surveys and interprets relevant data to identify external opportunities and threats. This is where the information from within and without the company is monitored, evaluated and disseminated to key individuals in the company. (Wheelen & Hunger, 2006).

Environmental scanning process requires an employer to gather accurate and diverse information about the world in which it operates, including information about the economy, government, laws and demographic factors such as population size and distribution. It then has to focus on its competitors to determine their number as well as the fierceness of the competition. It is important for a company to consider how often it carries out environmental scanning as well as the means they use to achieve the same. The company has higher chances of establishing itself well if it does scanning quite often using the right methods. This allows a company to act quickly and to take advantage of any opportunity ahead of our competitors. The company will be focussing on two key areas: how to compete to realize competitive advantages and how to sustain these advantages. Strategy involves performing similar activities but doing them in a different way. This is the only way to realize sustainable advantages from a competition.

Cloudbiznet Solutions’ External Environment

An organization’s external environment refers to the factors outside the organization which affects its operation. These are the factors that are not easily controlled or manipulated by the firm executives. (Adebisi, 2006) . They are categorized as directly interactive and indirectly interactive. The first case pose immediate impact on the organization while the later have more distant effects. Cloudbiznet Solutions will be facing factors including competition, government regulations, customers, economy and public opinion. Being a startup company, we will face the challenge of getting accepted as customers will tend to trust what they already know.

The government regulations mean spending more cash to meet these requirements and therefore affecting the profit margins. These include expensive government documents, tax rates and exchage rates which affect importation of items. Taxes rates also flactuates. Customer factors involve demands, spending rates and employment levels. The poorer the levels of employment, the less the expenditure. Market fluctuations affects organization operations. There are times when demand for services is high and other times when it is low. Public opinion is another factor. It is in order that a company seeks opinion on the best service providers. Public perception can either boost or damage a company reputation. It is important to ensure best relationship with all the stakeholders and the citizens at large to keep a good reputation.

Forces Most Important In Driving Competition

This analyzes the forces that determine competition intensity and market attractiveness. Michael E Porter developed a framework for assessing the competitive strengths of an organization. The concept sites five factors including: threats of new entrants, buyers bargaining power, suppliers bargaining power, threats of substitute products or services and rivalry among existing competitors. The major factors facing Cloudbiznet Solutions, being an IT company, are emergence of new companies and competition from the established companies.

Threats Of New Entrants

Cloudbiznet Solutions is in itself a startup company. It will have to do a lot of work to onboard customers. If other companies emerge during this time, they will pose a threat in acquiring customers as some of them may decide to join the new companies. New companies come with new stregth and new ideas to offer. It will be upon us to implement the best strategies to acquire and retain the clients.

Competition From Already Existing Companies.

There are already large cloud computing companies who have long gone to the public and gained public trust. In a competition, one goes ahead and the other follows. This will make the losing company device means of winning whereas the winning company would not afford to lose, resulting in actions and reactions between the firms and leading to rivalry. The higher the rivalry the higher the competition and when rivalry is low, competition is less. (Azhar 2009)

Cloudbiznet Solutions’ General Environment

These are factors outside the organization and may influence its operation but their impact is less direct. The key factors to focus on include economic, political, socio-cultural and technological trends. Focusing on these factors means that an organization will be able to monitor the changes and adjust accordingly in order to continue with the company activities and achieve their goals and objectives.

Economical factors involve market demands (the purchasing power of the consumer as well as spending patterns), inflation, rate of unemployment, interest rates, tax systems and exchange rates. All these factors determine the company returns. For example high service demands, high rates of employment and low taxes mean higher returns as compared to low demands, poor employment rates and high taxes. If the consumer earns little, they will also spend less. We will therefore have to put strategies in place to that we continue to thrive despite economical changes.

Technology is an important aspect in every IT company. People are moving to automated services. Cloud computing in itself has everything to do with technology. People will go for reliable and affordable services. It is also important to note that technology is ever dynamic. The company will have to be quick in identifying and embracing new trends to keep up with technological pace.

Socio-cultural factors focuses on what the society accepts and does not bring harm to them or their believes and practices. A company will head nowhere if it is offers goods or services that are not accepted. Society dictates the kind of business we do around people and will ultimately determine our success. The consumer lifestyle also determines the kind of services they will require. Technological trends has influenced customer demands and buying patterns due to changed lifestyles.

Political factors involve government regulations that determine what businesses can or cannot do at any given point in time. Some laws dictate how businesses should be carried out. There are also legal documents that a company must possess to carry out a business. These make a company to spend quite some money to meet these regulations. Government has also imposed taxes that take away some good money from the businesses. All these affect the profit margin of the company and adjustments have to be made ensure the business always runs with good profits.

Cloudbiznet Solutions Industry Operating Environment

As a cloud computing company, it will realize massive growth due to the set strategies. The company will put the customer needs ahead. It will ensure that the customers are offered excellent services they require. This is because a skilled support team will be able to reach the cusomer one on ene to understand their needs, advice them on the best technological solutions, offer the service to them and support them to the fullest. Unlike the established companies that only offer online support, our company will ensure to reach to the customer one-on-one

The company will set allocate time to brainstorm and support new technological ideas. This is foster innovation within the company. It will also ensure that the company keep the pace of the evolving technogical field and add value to the new changes. This will enable the company to brand itself and gain more acceptances from its customers and thus acquiring more. The skilled team will always receive training on the new advances to enable them support the customers fully.


Azhar, K. (2009) Strategic Management and Business Policy 3rd ed, India, Tata McCrian- Hill Publishing.

Hunger, D. J. &Wheelen, T. L. (2006 ) Concepts in Strategic Management and Business Policy. 10th ed. New Jersey. Pearson Education, Inc.

Adebisi, Y. (2006) Essential Marketing Management, 1st ed, Lagos, Gilgal Publication.

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