Importance of an environmental analysis

In every business, either a small business or a big company will have their internal and external environment. The internal environment is refers to the environment that are exists within an organization and it also refers to the strength and weakness of an organization. The internal environment are consists of the management strategy, corporate culture and values, quality of the control system, work culture, career progression of the employees, mission and vision of the organization, industrial relations, line and staff relation, team spirit among employee and compensation system. Those elements are affected by the procedures, policy and employment conditions that managers oversee. Next, about the external environment, it is contrary to the internal environment, the external environment is refers to the environment that are exits in outside of the firm and uncontrollable factors, it also refers to the opportunities and threats of an organization. The external environments are the suppliers, competitors, society, customers and financiers. Some of the external factors can contribute to the growth of the company.

When having a business, we need to make the environmental analysis. The environmental analysis can help a business understand the external forces that will affect the success or failure of a particular product. The environmental analysis is important because we can make the correct decision when understand the external environment. The marketers will look at the cultural forces, competitors, social conditions, political situation, economy, legal and ecological factor when effecting an environmental analysis.

2.2 Body

The small local business proprietor that I had interview is the proprietor of Moy Huat Motor Trading Sdn Bhd. Moy Huat Motor Trading Sdn Bhd is a motorcycle shop, they provide several service such as repair motorcycle, service motorcycle’s engine, spray and design motorcycle’s cover, and help paying the motorcycle’s insurance and road tax. Besides that, they also have sell the product such as motor, helmet, raincoat, motorcycle tire, motorcycle lock, motorcycle alarm, motorcycle’s box, motorcycle’s rear and front bulb and other accessories.

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The reason why I interview this business is because I need to do a SWOT analysis report from this business. The meaning of the SWOT is strength, weakness, opportunity and threats. The SWOT analysis is an effective way that use to identify the company’s strength and weakness and to examine the opportunity and threats. The SWOT analysis report can help a company with tactical, strategic, contingency and operational planning.

First is about the strength of the Moy Huat Motor Trading Sdn Bhd. I saw that there had many customers at their motorcycle shop because they have good service and their price of the goods is cheaper than other motorcycle shop, the goods are refers to the motorcycle tires, sport rim, motorcycle oil, motorcycle cover, raincoat and other accessories. The reason why they can sell their goods in lower price is because they get their stock from the manufacturer, so the goods are not pass by the other suppliers and this cause they get the lower price of their stock. Besides that, the main strength of the Mot Huat Motor Trading Sdn Bhd is they are the agent of the Yamaha, Honda, Suzuki. The main advantage of being the agent is they can get the lowest cost of those three brand’s motorcycle. This is also the one reason of why their total sales of the motorcycle are more than their competitors. Other than that, the another reason they can increase their sales of the motorcycle is because they use the high commission to help them promote their motorcycle, they will give the high commission when the customers bring their friend or family to buy the motorcycle and they will give much discount and the free give such as helmet, raincoat, motorcycle lock, motorcycle basket, motorcycle box and free service to the customers who buy the motorcycle.

Next is about the weakness of Moy Huat Motor Trading Sdn Bhd. Although there have many customer, but they are not enough worker to do the work. So the customers who cannot wait, they will decide to go to other motorcycle shop to repair their motorcycle. Second, their shop is not large if compare with some of their competitors, some of the consumers will decide to go to the motorcycle shops which look higher standard. Third, the facilities of them are not enough, the facilities are the motorcycle’s jack, spanner, and other. Next, the main weakness of them is the stock of motorcycle. The cost, sale price, total sale, stock of the motorcycle are all depend on the suppliers. For an example, they need to wait the Yamaha supply the motor to them if they want to sale the motor and when they supply the motorcycle and the cost of each motor are not necessarily.

After that is about the opportunities of Moy Huat Motor Trading Sdn Bhd. They have use the internet to help them sell the motorcycle, they provide a website that can let the customers know what is the price of motorcycle they sell. Now, there are many of the Malaysian would like to work in Singapore because their economic is better and the salary is higher if compare to Malaysia. Most of the Malaysian will decided to buy a motorcycle that use as a transport to Singapore, so that they can increase their total sales. Next, because of the economic downturn, the people will decide to buy a cheaper transport such as the motorcycle or bicycle. So that is also an opportunity for them.

Last is about the threats of Moy Huat Motor Trading Sdn Bhd. They face many threats that are come out from the competitors, such as some of their competitors become stronger and open many branch at different place, the competitors sell the price of the motorcycle lower than their price and the demand are very seasonal.

Those are the SWOT analysis of Moy Huat Motor Trading Sdn Bhd. I have some recommendation that can minimize the weakness and the threats. First, they can open more brunch or to expend their company to bigger, this can help them to create a professional impression to the consumers. Second, they can use high salary to help them more easy to hire the worker. Third, they can find more supplier to overcome the problem about lack of stock. Next, to overcome the demand are always seasonal, they can go to do some market research, that can let them know that what is the demand of the consumer now and after that they can make the decision of want to order the stock or not.

2.3 Conclusion

In the process and after of doing the SWOT analysis, I know that the SWOT analysis in not only important for the big company, a small business also needs to have the SWOT analysis. They need to use the SWOT analysis to know what they stronger than their competitors, how they can survive in the market, what is their weakness, what is their obstacle, how the competitor, social or government affect them and other factors. After doing the SWOT analysis report, then can know that what is the strength, weakness, opportunity and the threats of the company, we must think that how to minimize the weakness while maximizing the strength and how to minimize the threat while maximizing the opportunity. If the company either a big company or a small business, which refused to do the SWOT analysis, they will become no progress or maybe cannot survive in the market.

Strength

Question

Answer

What advantages does your company have if compare to your competitors?

Our company is the agent of Yamaha, Honda and Suzuki. We are also supply these three band’s motorcycle to other motorcycle shop.

What are the major sources of your company’s revenue?

Service charge from repair motorcycle and interest from selling motorcycle.

How you increase your sales of the motorcycle?

We will give the high commission when customers introduce their friend or other person to buy motorcycle and we will give much discount when the customer buys motorcycle.

What is your cost of the capital, such as the motorcycle?

For the cost of motorcycle, we will get the lower cost of the motorcycle because we are the agent of Yamaha, Honda and Suzuki.

What make you stand out from your competitors?

We provide good service, and our motorcycle price is lower than our competitors.

How you retention your customer?

We have give feedback to our customers, such as giving the free service to our customer if they buy motorcycle from us and we are also sell the goods to them with very special (low) price.

Weaknesses

What disadvantages does your company have if compare to your competitors?

The momentum of us are lose to some competitors because our shop is not large enough and the facilities of us are not enough, the facilities are the motorcycle’s jack,

Do you have any weak brands of the motorcycle?

Yes, the weak brand is Demak, which is the product of Malaysia.

What are the biggest expenditures of your company?

When pay for the total cost of motorcycle.

What resources are inadequate in your company?

Not enough of the worker and the supply of stock, such as motorcycle.

What weaknesses cannot be overcome?

The cost and sale price of the motorcycle are always depend on the suppliers.

Opportunity

Is there a service or produce area that other have not yet covered?

Yes, we have sell our motorcycle by using the network

Is that your company entering in new markets?

No

Is your company advanced in technology?

No

What economic trends that benefit you?

There are many of the Malaysian would like to work in Singapore because their economic is better than Malaysia and most of the Malaysian will decided to buy a motorcycle that use as a transport to Singapore. Next, because of the economic downturn, the people will decide to buy a cheaper transport such as the motorcycle or bicycle. So that is an opportunity for us.

Threats

Are your competitors stronger?

Yes, some of our competitors have many branch at different place.

How is the market demand of motorcycle or accessories?

The market demands are very seasonal.

Do you see other external threats to your company?

Some of the competitors sell the motorcycle price lower than us.

What obstacles do you face?

Some of the competitors become stronger.