The organization has a number of options it can consider expanding the business. It needs to explore opening subsidiaries, joint ventures or increasing distribution of its products. Among these three alternatives, joint venture will be the most viable, with companies engaged in security.
Macro-environmental PEST analysis:
- Political and legal environment
Right now, political stability in US is high. The government policies are focused on encouraging environmental friendly investment, and the company will benefit so much from such policies since company will invest on sensors that will depend on the use of solar energy.
- Economic environment
US economy has recovered significantly from the 2008 crises, and the rate of inflation has also gone down. The uses of solar energy in the sensors will lower the production cost as well as provide the sensors at the lowest prices ever in the long run. The decreased inflation after the 2008 crises and the improved economy have improved the people’s purchasing power and the need to invest in their own security. This will improve on the company’s revenue from sales. The improvement in the economy is as indicated in the graph below over the past three years.
- Social and cultural environment
The sensors market is experiencing growth as more and more people seek security in their homes and other places of confinement. As many Americans are engaged in parting, many business owners especially in the entertainment and sports industry are investing on the security of its customers and their wealthy through putting sensors all over the places. And the threat from global terrorism is also a factor encouraging the use of security sensor systems in almost every structure in towns. This will continue to widen the market for the company’s product in the long term
- Technological environment
Technological advancement in United States of America has enhanced the ability of individuals to adopt the technology-based security in their homes. This has called for the use of sensors in homes, businesses and entertainment places which are sustainable over a long time. This has significantly boosted the demand for such products in the market (Sadler, & Craig, 2003).
- The internal attributes of the firm can be categorized as either strengths or weaknesses. In its internal environment, the organization has strengths such as reliable human resources with clear job descriptions and use of sustainably cheap sources of energy like the solar energy. It is equally engaged in the production of highly demanded products. In terms of weaknesses, the organization has a high debt that it needs to repay. However, through joint ventures, mergers, issuing stock and rescheduling the debt as well as reducing the expenses it can acquire extra cash to pay off such debt.
- The organization’s external environment identifies the threats and opportunities.
The society is characterized with increasing demand for security in homes and other places of entertainments. Similarly, there is an increased concern over security of the public and privacy due to the use of high tech sensors.
The Segmentation of the Market
The organization will focus on selling its sensors to large organizations and entertainment sites that need to boost security of their premises.
- Percent of sales
The percentage sales are expected that almost half of all sensor sales go to large organizations for security purposes.
- What they want
Large business often seeks to boost the security of their stores. Consequently, they end up employing sensors in detecting movement in the organization.
- How they use the product
The zone product is used in securing the premises. Often, large organizations may encounter intruders in the organization. To boost the security of their products and premises, they employ these products for security purposes.
- Support requirements
The use of sensors in organizations will require significant support equipments. Organizations may need a network of CCTV cameras and networks to coordinate the identification of captured images from one point to another. It may equally require a monitoring security officer who will be identifying images with the enterprise on real time basis
- How to reach them
There are numerous ways that the organization can use to reach its customers. In particular, the organization will focus on the use of indirect distribution. This will involve the use of middlemen in the distribution of the organization’s products. Involving middlemen and women in the distribution process is also advantageous. For instance, it would result to wider distribution of the products across the world. By delivering its products to independent distributors and wholesalers, the organization will enjoy a wide market reach.
- Price sensitivity
In this particular case, the organization will focus on the quality of its products in attracting customers rather than the price. Also note that note that many large organizations hardly peg the security of their multimillion dollar enterprises on mere prices. It focuses on how the security details, though expensive, can secure the investment. This is more so in risk management where such organizations focuses on ways of minimizing risk. The organization will thus focus on non-price sensitive customers. This will enable it enjoy high-profit margins, kicking it out of near bankruptcy.
- Sadler, P., & Craig, J. C. (2003). Strategic management. London: Kogan Page.
- Trading economics (2014). US GDP growth rate. Retrieved from http://www.tradingeconomics.com/united-states/gdp-growth