Environmental Analysis: Sherwin Williams
University of Phoenix
An important step in developing an effective strategic plan for Sherwin Williams Paints is to scan the organization’s external environment in order to identify opportunities for strengthening the company and threats against the current and future successes over the next three to five years. In addition to scanning the external environment, the company’s internal environment was studied to establish strengths and weaknesses of the organization. The external environment produced many threats including potential political changes due to the upcoming elections that could see a swing to more government control over regulation of emissions from coatings. If this is to happen paint makers will need to invest more into developing products that meet tougher standards. Currently government regulations exist at the federal, state, and even the local level and this presents challenges to paint retailers since each location must be an expert in all applicable laws concerning sale and use of these products. Related to these concerns is the push for more environmentally friendly products and these demands put financial strains on paint manufacturers due to the high cost of researching and developing these products that comply with the new regulations. Some economic threats include inflationary pressure, consumer purchasing habits, and the most significant of all would be the decline in the housing market. This has drastically changed which segment of customers purchase paint as the shift moves from painting contractors purchasing to DIY consumers who will paint their properties themselves. Other threats to be aware of include the flat predicted growth rate in labor, pending lead paint litigation that could severely impact the paint industry and Sherwin Williams in particular, and the threat of substitute products such as...