In order to effectively do an environmental analysis, one must look at the company's external environment. The external environment has 3 components: the remote environment, the industry environment, and the operating environment. Each of those three components have their own subcategories.
In this paper I will describe some of the external factors that will affect Domino's external environment over the next ten years. In the remote environment I will discuss the economic, social, and technological issues that will affect Domino's over the next decade. For the industry environment I will discuss the substitute availability and competitive rivalry facing Domino's. Finally, for the operating environment, I will be discussing the competitors, customers, and suppliers.
When combining all of the information, I will be able to project some long term objectives for Domino's Pizza. To achieve long-term prosperity, strategic planners commonly establish long-term objectives in seven areas: Profitability, productivity, competitive position, employee development, employee, relations, technological leadership, and public responsibility. I will use a few of these objectives in order to formulate a plan for Domino's Pizza.
Economic factors concern the nature and direction of the economy in which a firm operates. Because consumption patterns are affected by the relative affluence of various market segments, each firm must consider economic trends in the segments that affect its industry.
World events can affect the consumers purchasing habits in a negative or positive way. Recent events such as Hurricane Katrina, and the attacks on the world trade center. These events had a negative effect on our economy, and consumers were spending less money. However, in the next ten years the economy is forecasted to improve, allowing consumers to spend more.
Consumers are forecasted to have higher levels of disposable income over the next few years. Real disposable household income is expected to increase by nearly 12% over the next five years resulting in more opportunity for expenditure on home delivered food.
Over a twenty to thirty year period, the numbers of older people will continue to increase. The research suggests that firms in the home delivery market can benefit from this by building and keeping brand loyalty amongst a generation of people who have grown up as pizza consumers and whose incomes and affluence are likely to grow.
The social factors that affect a firm involve the beliefs, values, attitudes, opinions, and lifestyles of persons in the firm's external environment, as developed from cultural, ecological, demographic, religious, educational, and ethnic conditioning. As social attitudes change, so does the demand for delivery pizza.
The research shows that, on average, adults in the US eat out and/or eat delivered/take-away meals around 80 times a year. Researchers look at the impact of freeing up time normally spent on preparing food at home, as 'creating a time oasis'. As Americans become busier with their careers and lives, they have less time to prepare meals at home, and the amount of people eating out or ordering in will increase.
To avoid obsolescence and promote innovation, a firm must be aware of technological changes that might influence its industry. Creative technological adaptations can suggest possibilities for new products, for improvements in existing products, or in manufacturing and marketing techniques. A technological breakthrough can have a sudden and dramatic effect on a firm's environment.
In the short term more people will have access to interactive technologies, up from 70% today to...