Analyzing the External Environment

1974 Words Mar 8th, 2010 8 Pages
External Analysis and the Wine Industry*
Analyzing the External environment is important in the strategic decision making for the organization in that these factors will affect the company’s choice of direction and its internal processes. There are two specific categories of the external environment factors that will be discussed, the remote environment and the industry environment. The remote environmental factors important to the success of the organization are the economic, political, technological factors. In order to create their strategic action plan, the company must also have a clear understanding of its competitive forces included in the industry environmental factors. The factors the company must look at are the entry barriers
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By utilizing the Internet channel, the winery could open up doors to new business. Another remote factor of mention is the need for increasing technological advancements in the wine industry. The organization is constantly looking for ways to promote innovation in the vineyards as well as in the winemaking process to decrease production costs while increasing production. Forecasting for technology is a necessity for increased quality and profits. For example, the company has invested in infrared vineyard technology that when downloaded to a computer, can generate valuable information regarding the ripeness of the grapes from vineyard row to vineyard row. This infrared camera is used from an airplane to capture this data, allowing the winery to pick the grapes at their optimal ripeness, thus producing higher quality wines. Another technological advancement in the vineyard is the use of the “pressure bomb”. This device measures the water content in the vine so that the vineyard manager can gauge when to irrigate and when not to. Again, this technological device is working to produce higher quality grapes. The company has also purchased a “double grape sorter”, a new invention which will re-sort the grapes for inferior grapes and stems that can add negative elements to the wine. By forecasting for technological instruments, the company can stay on top of the industry trends and increase quality production. Besides remote

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