The nature of the industry and the effects of globalization have significant consequences for the internal and external environments in which a business operates. The operation and business activities on Blackmores are affected by the structure of operations, the internal business environment as well as the external factors. Blackmores operates in the Australian and international markets; thus the company faces issues related to competition and other factors which affect its productivity and sustainability. The internal analysis utilizes tools such as SWOT techniques in highlighting the strengths and weaknesses as well as the threats and opportunities. Blackmores specializes in health care products and the nature of the pharmaceutical industry in Australia presents competition, diversity of products and population needs and demands are varied which will affect the company’s production processes as well as other operations (Issa, Chang, & Issa, 2010, p. 73). The focus of this paper is an analysis of the internal and external environment of Blackmores Company and its business strategies and operations in the Australian market.
The analysis of the internal business environment focuses on the organization’s resource capabilities, core competencies, and management abilities. This analysis is based on goals and objectives as well as the vision and mission which are relevant to strategic decision making. The internal analysis identifies the company’s strengths and weaknesses, and it contributes to strategies which will contribute to achieving competitive advantage. Blackmores has experienced stability and profitability in Australia. The company has expanded its operations to other countries such as Malaysia, China among others which place its performance and profitability higher than its competitors. An organizational analysis of Blackmore’s illustrates success in the diversification of products and services to include health care products such as of vitamin, minerals and herbal and nutritional supplements in both domestic and international markets (Dranic, 2014, p. 122).
The internal environment of an organization depends on the management and the coordination of different departments in the effective and efficient operations. Blackmores specializes in production, marketing, and strategic development projects. The nature and style of management affect the competitive advantage, the performance of human resources and resource utilization in the organization. For instance, Blackmores utilizes its human resource management in the creation of diversity in the workplace and improvement of the quality of life through the various products which address the human and animal needs of the Australian population. The success of the company is associated with the leadership qualities and contribution to strategy and growth over the years. The contribution of leadership to growth and sustainability is the establishment of the reward system and recognition of innovation in the company which is relevant to the research and development efforts in changing production processes and product development (Keillor, 2012, p. 88).
An analysis of the internal environment of Blackmore leads to the identification of the company’s resources capacity as well as the core competencies which contribute to the growth and competitive advantage in the health sector. Blackmore relies on research and development in the creation of diversified products to meet the consumer needs in the domestic and international markets. The company has invested in research and development in the product development processes which contributes to the wide range of products focusing on human health and supplement, animal well-being and other nutritional and therapeutic products. The company collaborates with institutions such as Blackmore Institute in advancing research and providing trained workforce in the healthcare industry. The contributions of the collaborative efforts by the institute and company have contributed to fewer costs in research and quality of products in the market. The internal analysis tools include the SWOT technique which identifies the strengths and weaknesses and the firm’s ability to adapt to the external environment opportunities and limit the effects of threats to business growth and sustainability (Ahlstrom & Bruton,2010).
Blackmore’s success in the Australian market is associated with the strategic goals and objectives the company has adopted over the years. Following changes in the global competition and health care reforms and demand for quality and internal analysis of the company leads to the identification of various strengths the company is likely to explore and adapt to the Australian market. Blackmore’s strengths are evident in the high profitability and revenue generations of the company which is as a result of quality and established the brand as well as other factors such as reduced cost of production. The company can benefit from the low costs of labor which is as a result of high population. The other strength is the Australian market and the health reforms which has imposed restrictions and legal regulations on market entry for the pharmaceutical industry. The reform and market entry restrictions place Blackmores at an advantage against international MNCs competition. The company has and advantage over the unique products and diversity it offers to the domestic and international markets. The diversity and unique products is evident in the health, nutritional, supplement products the company offers in the market (Ahlstrom & Bruton,2010).
The weaknesses evident in Blackmores limited are the company involvement in research and development which is a costly initiative. Research and development contributions to the success of Blackmores are the product development, and this contributes to the company’s expenditure, and it affects the market share and price competitiveness in the health industry. Australia’s health sector receives limited funding for health care research from the government and thus, private involvement in research and development which is a costly investment to health care industry. The analysis on the opportunities and threats illustrate Blackmore’s advantage to explore new, market and acquisitions which will contribute to the expansion. Also, the company has an opportunity for growth and profitability given the dominance in the market and product diversification. The company faces threats in business operations and activities in the government regulations and reforms to improve the level of quality and safety for health products in Australia. Government regulations act as hindrances to new product development which have to undergo accreditation and approval from the government agencies such as Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (PIC/s) standards of good manufacturing practice (GMP) (Ahlstrom & Bruton,2010)& (“Blackmores Vitamins and supplements- Australia’s most trusted – Blackmores,” n.d.)
Blackmore’s success and sustainability is dependent on the competitive advantage the company has over its competition both locally and internationally. The Australian market is saturated with organizations private and public which deal with health products and services, and thus the rise of Blackmores is attributed to the products and services they provide in the market. The contribution of competitive advantage is performance and maintaining market share and productivity in the market. Blackmore’s internal analysis establishes the organizational capabilities and characteristics which distinctively differentiate Blackmore’s resources and products from competitors products. For instance, Sanofi-Aventis, Harron Pharmaceuticals are competitors in the Australian market. Blackmores investment in quality and diverse products contributes to improved customer experience and value and the contribution of research and development lead to unique products in the health care industry, Blackmores future sustainability is dependent on the company’s ability to maintain customer value and quality and unique products in the Australian market (Goldman & Nieuwenhuizen, 2006).
The strategic decision-making process of an organization requires a micro and macro evaluation of the external business environment and its effects. The external and internal factors in an organization play a major role in the performance, productivity, and profitability of the company. The strategies are aligned with the company’s environment and goals, and thus the use of techniques such as the PESTEL illustrates the external factors and influences on business decisions and performance. Through PESTLE analysis, the company identifies social, political, legal, environmental and technological influences on performance and sustainability of the company (Goldman & Nieuwenhuizen,2006).
The operations of Blackmores Company are international and thus the exposure to the political environment in Australia which is characterized by controls and regulations in the health industry. The expansion of Blackmore’s operations in different countries includes the different market policies and regulations. The expansion to other markets includes opportunities and threats to the company. Australian political and social environment has undergone reform over the years, and this has significant impacts on the industry. The Australian government has adopted a democratic type of governance and these have contributed to stability and the right environment for business growth. The government has adopted policies which regulate the health care sector and consumer protection in health care products. This has contributed to the maintenance of the level and quality of products and the adoption of the right processes in the production of healthcare products and services (Issa, Chang, & Issa, 2010, p. 73); (Box-Hall & Short, 2006, p. 6).
The socio-cultural factors in the external analysis of business environment focus on the demographic characteristics and the issues such as health, education, attitudes and influences on business performance. For instance, Australia is a multicultural nation which is characterized by social inequalities and disparities in the heath care. The health inequalities are present in the native Australians and the aboriginal descent which calls for government intervention in creating equilibrium in the market. Other socio-cultural factors which are likely to influence the success of Blackmores are consumption patterns of health products. The employment levels vary from the urban and rural population which affects the consumption patterns of the Australian population in Blackmores products. The diversity of the population contributes to the diversified need for health products in the Australian market, and thus Blackmores products are effective in meeting the market needs. For instance, Blackmores diversity o products to cover health products focused on skin infection, health conditions, supplementary health products attract the different lifestyle, choices, and attitudes represented by the diverse Australian population (Goldman & Nieuwenhuizen, 2006).
The globalization effects have led to improved systems and operations by industries, and this has contributed to the efficiency and effective achievement of companies. Blackmore’s existence in the international market subjects the need for technology and innovation in achieving competitive advantage through improved production processes, product innovations through research and development and other technological contributions in marketing, communication, and promotional activities. Technology contributes to effectiveness and efficiency in business activities, and thus, Blackmores benefits from the research and development processes through collaboration with educational institutes, and thus the company benefits from product development and diversification (Goldman & Nieuwenhuizen, 2006).
Conclusion
The external and internal analysis of the business environment is important for the globalized companies whose profitability, sustainability and performance are subject to influences within and outside the business. The sustainability approach is influenced by performance and other factors such as the competitive capacity of the business. Blackmores Company in Australia represents an international company whose sustainability is subject to maintaining the competitive advantage of the business through internal analysis of business performance and positioning in the global market. The external environment contribution contributes to strategic alignment in maintain success and performance given the external influences.
References
Blackmores vitamins and supplements- Australia’s most trusted – Blackmores. (n.d.). Retrieved from
https://www.blackmores.com.au/
Issa, T., Chang, V., & Issa, T. (2010). Sustainable Business Strategies and PESTEL Framework. PsycEXTRA Dataset, 1(1), 73-81. doi:10.1037/e527392013-013
Gupta, A. (2013). Environment and PEST Analysis: An Approach to External Business Environment. International Journal of Modern Social Sciences, 2(1), 34-43.
Keillor, B. D. (2012). Winning in the global market: A practical guide to international business success.
Boxall, A., & Short, S. D. (2006). Political economy and population health: is Australia exceptional? Australia and New Zealand Health Policy, 3, 6. https://doi.org/10.1186/1743-8462-3-6
Goldman, G., & Nieuwenhuizen, C. (2006). Strategy: Sustaining competitive advantage in a globalised context.
Ahlstrom, D., & Bruton, G. D. (2010). International management: Strategy and culture in the emerging world.
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