General Environment

General Environment 

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General Environment

An organization is exposed to various kinds of environments. These are the task environment, the internal environment and the general environment. The general environment of a company is its external environment. It is composed of the political/legal, sociocultural, technological, natural, international and economic. These six dimensions are very important for a company as they affect the company from the outside. Most of these are not in the control of the company, which makes it necessary to analyze these dimensions to have a future view of the business (Wild & Wild, 2014). In this assignment, three of these dimensions are considered and discussed with respect to the New Zealand based food manufacturer, Hubbard Foods. It sells cereals under the brand name Hubbards. In the ready to eat cereal market of the country, Hubbard is currently at number three position after Kellogg’s and Sanitarium. An attempt will be made to understand the political, economic and sociocultural factors that impact the business and the possible growth path of the company in the next 10 to 15-year horizon.

Political factors are one of the most important factors to consider when a company plans to expand into another country. Even in case of the same country, a stable political/legal condition is required for the smooth conduct of the business operations. This dimension basically tries to evaluate the percentage or proportion of government influence on the policies that govern the businesses (De Villa & Rajwani, 2015). Since Hubbard is in the whole foods markets, a few important influencing points would be:

• Organic foods GMO regulations
• Free trade agreements with other countries
• Labor standards

The company is one of the market leaders and has a market share of around 25%. It is a trusted brand in New Zealand and hence the stringent policies related to the GMO free products of the government would not affect the company and its brands to a large extent. The government has also succeeded in maintaining good and effective foreign alliances which would help in creating free trade partnerships with other countries to expand overseas and increase its presence. The company also has Whole Trade Guarantee certification. This enables in getting more customer trust and integrity. It will help in building a long term and sustainable relation with the people. Hence, with respect to the above factors discussed, it can be concluded that the political factors will contribute positively to the company’s growth in the next 10 to 15 years.

Economic environment is the second important dimension of the general environment of the company. The economic condition of a country plays an important role in deciding the growth of the company. This is because and positive and growing economy will result in more spending by the people due to availability of more disposable income. One of the common indicator of this is the GDP growth rate of a country. New Zealand is growing at a 4% annual rate in terms of real gross domestic product. This is a very good growth rate for a developed economy like New Zealand. The employment rate has also increased in the country in the past couple of years. The inflation rate of the country is under proper control and the political condition of the country is stable (Luo & Zhao, 2013). These factors make the Whole Foods Market very attractive in the New Zealand context. The interest rates on the food products are moderate, the corporate tax is low and the consumer spending has increased over the years. The favorable factors would help the country stay in the growth path for next couple of decades. The economic condition is very strong and it will continue in the future as well. In addition, since the company is trustworthy and one of the market leaders, the sales and profitability will increase with an increase in the increase in the growth of the company.