The paper "Firm Resources and Sustained Competitive Advantage" is a great example of a Management Assignment. Companies operate in an open system. They have got to interact and respond to various factors that impact on their performance. Top among these factors are the external environment (Political, Economic, Social, Technological, Legal and Ecological), the porter’ s five forces (threat of substitutes, threat of new entrants, rivalry among existing competitors, bargaining power of suppliers, and bargaining power of suppliers) and competition. This report describes the influence of these factors on the Australian grocery industry and the Australian retailing industry.
The grocery industry is dominated by two big retail stores; Coles and Woolworths. David Jones is a leading player in the Australian retailing industry. In the first part of the report is the external environment analysis. The second part outlines the five forces analysis. The third part indicates the sources of competitive advantage for each firm. External environment analysis. The external environment analysis entails the scanning and evaluation of a firm’ s external factors that have an influence on its performance. Scanning involves monitoring and interpreting the political, economic, social, technological, legal and ecological happenings to identify emerging trends that may possibly impact the industry in the long run.
This informs the decision-makers on the goings-on in the external environment. They identify and can anticipate potential changes in the external environment in the coming times. Evaluation involves looking at the trends in the external sectors and assessing how they may influence the firm judging by the opportunities and the threats. The political environment in Australia is quite stable. There has been a peaceful transfer of power under the rules of fairness and democracy.
However, the economic environment is subtle amid global economic uncertainty. The current economic situation is characterized by lower consumer spending. Various social factors seem to influence the trade in the Australian grocery and retailing industries. One of the major rising social impacts is the people’ s consciousness towards their health. Moreover, social influences seem to have an impact on consumer preferences and taste with more demand for organic foods. This offers the opportunity for the grocery companies to bring to the market organic foods that are set to be in demand in the long-term.
On the other side, firms specializing in the production of organic foods will feel threatened. Another key emerging social trend is the time convenience that shoppers demand in their shopping spree. This requires firms to offer more product range and one-stop shopping experience. The technological environment has had a major influence on the industry. The internet has offered a channel for online sales. More consumers are using the internet to buy commodities. The legal environment has mainly influenced the industry’ s operations through government legislation requiring big companies, including supermarkets, to consider the impact of their operations on the environment.
This is to reduce carbon emissions that are detrimental to the environment. This also touches on the environmental aspect of being eco-friendly. Consumers seem to purchase commodities with green labels or better energy ratings.