Environmental Analysis and Long-term objectives Essay Example for Free

Environmental Analysis and Long-term objectives Essay The organization selected for this paper to discuss the environmental analysis and long-term objectives is Dunkin Donuts. The main focus will be on the forces and trends operating in the environment which have a considerable effect on the running of the organization. The paper will first discuss these forces and trends in detail and then provide an insight to how these forces effect the organization and align themselves with the vision and values of the organization. The trends selected are: 1. Social responsibility 2. Environment 3. Fuel Social Responsibility One of the environmental trends is social responsibility which adds to the credibility of an organization. Social responsibility basically refers to the responsibility or the duties of an organization, government or even an individual towards the society in which it functions. Every organization has a responsibility to keep their actions and practices in the best interests of the people living in the society so that it does not endanger them in any way. Instead organizations should work to provide comfort and help to the society as a whole. This is a part of their corporate social responsibility. The company can also be involved in eradication of unethical practices and behavior taking place in the society so that the lives of the people could be made easier. For example, some companies take initiative in planting trees or constructing gardens in an area which serve a place for community people to come together and meet each other (Kotler and Lee, 2004). Social responsibility at Dunkin Donuts has actually helped the organization in a considerable manner. The restaurant holds a respectable position in the society due to its charity and community involvement programs. The company as well as their employees contributes for the community service organization in order to make the lives of the people better. Moreover, they are extremely committed to the environmental responsibility. The restaurant follows the environment regulations and promotes cleanliness. The restaurant itself is very clean and tidy with a proper system to discard the garbage. The company supports charitable programs and takes initiatives for supporting and participating in the welfare of the community people. They even sponsor educational programs in local community schools and provide funds for different events like Special Olympics, AYSO soccer teams etc. Recently Dunkin’ Donuts has entered into a relationship with a non-profit organization ‘Coffee Kids’ for supporting families in the coffee-producing regions of Mexico and Central America. On 22 May, 2008, the company went ‘green’ by initiating its first LEED (Leadership in energy and environmental design) restaurant which is a part of their corporate social responsibility commitment. This way the company hopes to improve the quality of life of the community people by making the area clean and green (Kotler and Lee, 2004). The trend operating in the environment must be aligned with the mission, vision and values of the organization for it to work in the best possible way. At Dunkin’ Donuts, there are seven core values and one of them is responsibility towards the environment and the community in which they are functioning. They are committed for improving the people’s quality of live. The first LEED being built up by the company is an effort towards promoting a healthy life for the people and improving their quality of life. The social responsibility practices of the company reinforce their mission, vision and values which are focused on making the ‘world a better place live and work’ (David, 2006). Environment The second force the paper talks about is the physical environment in which the organization is functioning. The trends in the environment have a much larger impact on the organization; here we are discussing the physical environment. Changes happen in the physical environment without any notice which might result in shock or disaster or even opportunities. Organizations need to have a contingency plan to deal with such contingencies resulting from the physical environment (Shaffer, 2000). In the physical environment outside the Dunkin’ Donuts Company and restaurant, variable changes can take place which can sometimes help the organization or hinder its processes at some other instances. The environment can provide opportunities as well as threats to the company. Since Dunkin’ Donuts has now essentially become a beverages company so it can specialize in different kinds of beverages and become a market leader. Moreover, the increasing number of suppliers in the industry can also result in new opportunities. Threat comes mainly from the substitutes and the new entrants. The company faces tough competition from Starbucks and their success becomes a threat for the company plus the industry doesn’t offers high barriers for the new entrants so more beverages company can be set up thus giving rise to the competition. Apart from this, the physical environment also includes the threat from natural disasters which can cause huge losses to the company so the company needs to have contingency plans for dealing with them. Thus, the physical environment can both help and hinder Dunkin’ Donuts depending on the situation (Reeve, 2002). The organization strives to accommodate any changes emerging in the physical environment in its strategy. The company was essentially based on donuts first but now it has developed into a beverages company. This was because it saw greater opportunities for itself in serving the beverages market. It saw the changing taste of people towards coffee and decided to establish a strategy based on a coffee company. Today Dunkin’ Donuts is known as the no. 1 retailer in hot and ice regular coffee. Thus, this shows the organization’s strategic adaptability towards the changing forces resulting in the environment (David, 2006). Rising Fuel Costs The burning issue facing the organizations today in their environment is the rising fuel prices. Companies have to face rising costs due to this shooting up in fuel prices which have almost doubled this year. As the costs are increasing so the companies have to raise the prices of their products and services which decreases their sales. This way many companies are facing problems due rising fuel costs which in turn decreases their average sales. Therefore, the third issue is of fuel which this paper will examine (Reeve, 2002). The rising cost of fuel is a trend in the environment which hinders the company by raising the costs of doing business and thus, decreasing the sales and profits. Since electricity is produced through fuel so increase in fuel costs also increases the electricity cost. At Dunkin’ Donuts restaurants, the food including the donuts and beverages is prepared to sophisticated machines which run on electricity. They have to pay higher for electricity which increases the cost of inputs and simultaneously, the cost of doing business. The company has raised the prices of its products worldwide recently but that has caused the sales to decrease and thus, it earns lower profits. This way fuel is actually a hindrance towards high profits for the company and simultaneously, its long-term objectives. Since rising fuel costs are hindering the company’s sales and profits, Dunkin’ Donuts is trying to find out ways of producing the products efficiently so that they involve low costs and the profits of the company could be increased. The company tries to specialize in certain beverages which can be produced with hands so that machine use could be limited thus, saving up the electricity. The company tried to adjust for these rising costs so that it can acquire an increasing number of customers to boost up its sales as well as profits (Shaffer, 2000). Conclusion The paper has discussed in detail the environmental analysis pertaining to social responsibility, environment and fuel. It first discussed what these forces actually mean and then identified their relevance with the organization and how organization adapts to these forces operating in the environment. Social responsibility at Dunkin’ Donuts is aimed at winning the hearts of the masses through charity and community involvement activities. The mission of the company is to improve the quality of life and this is effectively done through their social involvement programs. The company also takes immediate action to the changing environment which may involve rising incomes or changing tastes of the people and tries to accommodate the change in its strategy as it did from shifting to beverages industry from donuts industry. Finally, the company is also trying to cope up with the rising costs of fuel through cost efficient methods and increasing the prices since the income of a common man has also increased. All these forces or trends help or hinder the organization and its strategy in their own way. Thus, it can be said the Dunkin’ Donuts is a very capable organization who has effectively dealt with difficult times and has become the no. 1 retailer in coffee throughout United States (David, 2006). References David, F. R. (2006). Strategic Management: Concepts and Cases. Prentice Hall. Kotler, P. , Lee, N. (2004). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause . Wiley. Reeve, R. N. (2002). Introduction to Environmental Analysis. Wiley. Shaffer, J. (2000). The Leadership Solution. New York: McGraw-Hill