Organisation and Management - Golden Wonder Case Study

530 Organisation and Management

Assessment 2

Question 1

A business like Golden Wonder has to act and react to what happens outside the factory and office walls. These factors that happen outside the business are known as external business environment challenges. Below are the five major external business factors in the Golden Wonder’s case.

Economic factors

Economic factors include economic cycle, economic growth, interest rates, exchange rates and the inflation rate (Mehta, 2000). These factors have major impacts on how businesses operate and make decisions. In this case, Golden Wonder suffered from the recession in early 1990s. This was caused by the current weak economic conditions, declining property prices and rising unemployment; so consumer spending has declined significantly. The demand on crisps declined at the beginning of recession, however it quickly returned to high levels of growth with the adverse economic conditions being outweighed by the positive social effects. This also suggests one of the fundamental economic factors of crisps products as it is not particularly responsive to changes in income.

Social factors

Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety (Mehta, 2000). Trends in social factors affect the demand for Golden Wonder's products and how that company operates. In this case, there was a general desire to eat healthily (consume less fat), lose weight and look good. Furthermore, Golden Wonder may change various management strategies to adapt to these social trends (such as introducing the low fat product - Golden Light). Like most other retail markets, the crisps market is impacted by global social trends, which sees an increasing interests on nutritional value and calorific content of food - in general the low fat products.

Technological factors

Technological factors include technological aspects such as development activity, automation, production processes, technology incentives and the rate of technological change (Mehta, 2000). They can determine barriers to entry, minimum efficient production level and influence production decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.The technological innovation of Golden Wonder has developed its production process in low fat crisps. Golden Wonder understood the importance of technological factors so it had contributed extensively to the research and development process. The technological innovation of a production process known as “steam stripping” had finally established its leading position in low fat crisps market.