Bill Gates: Environmental Scanning and Benchmarking

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IF we closely analyze this statement, the patterns of an organization's actions will be clearly reflected not only in the financial performance of an organization over the years but in the relative strengths, weaknesses and strategic positioning of the firm in the business environment, industry or economy it operates in. The understanding of these elements is the prima facie requirement in the strategic planning and management process and is closely analyzed in the environmental scanning process of an organization. But one has to remember that there are numerous other factors also such as general state of economy, industry growth rates, etc. which influence the formulation of strategy.

Thus environment scanning factors that originate beyond, and usually irrespective of, any single firm's operating situation: The external factors will consist of study of (1) economic, (2) social, (3) political, (4) technological, and (5) ecological factors." (Pearce, 2004, p.79) It helps in determining the opportunities and threats facing the firm.

The internal environment analysis comprises of studying the environment within the firm to determine the strengths and weakness of the organization. The understanding of these elements is the prima facie requirement in the strategic planning and management process and is closely analyzed in the environmental scanning process of an organization. These factors are very important in establishing the corporate level strategies of an organization.

Here we will analyze the affect of societal forces and to see what trends are like to affect the Microsoft in a brief manner.
Business environment of the new millennium will have to contend with:-

1. Turbulent markets that change rapidly and unpredictably
2. Highly fragmented 'niche' markets instead of mass markets
3. Ever greater rates of technological innovation in products and processes
4. Shorter product life-cycles
5. Growing demand for tailored products - 'mass customization'
6. The delivery of complete 'solutions' to customers, comprising products and services.

And all of the above to be achieved at less cost!

Economic Forces

Globalization has also increased the opportunities. The mature product in US can be at introductory stage in US. For example GM AVEO is a mature product in US, but in India it is at growth stage. Moreover globalization leads to the creation of the Universal Customer, one who expects the same quality of products and services regardless of where he is located in the world.

This does not mean one customer, one world, one brand or one positioning platform. What it means is that thanks to Microsoft, the expectation of a customer from Infosys (Indian software firm) is considerably higher today. Similarly, thanks to LG and Samsung, the expectations from BPL are different today. A convergence of expectations is happening globally. And as barriers fall further, technology advances rapidly, customers talk more to each other on the back of a robust telecom network, the ranks of the Universal Customers will only swell. To meet the challenge of simultaneously reducing cost and enhancing customer value requires a radically different approach to the way the business responds to marketplace demand.

Technological Forces
Impact of Internet, Portable Information Devices, Electronic networking, smart mobile robots, and increase in the speed of microprocessors will have tremendous impact on business. There has been tremendous impact of e-Business on the typical businesses. The information is exchanged much more quickly than any other thing which is helping the organizations to make more quick and accurate decisions. E business ...