Business Operations: Competitors, Suppliers, and Macro-Environment Factors - Essay Sample

Introduction

Various factors affect the operations of businesses, either positively or negatively. In this regard, they have been broadly categorized into the competitive business environment and the macro-environmental factors. The competitive business environment consists of the dynamics in the industry that form and external system which makes the business to compete and function, including such components as the new competitors, the suppliers, the existence of substitute products and services, as well as the rivals to the business. The macro-environmental factors include such elements as the demographics, technology, the state of the economy, as well as the existing laws and regulations from the government. In the paper, there is the discussion of the factors forming the competitive environment as well as the macro environments of W-40 Company: which deals in the manufacture of the household as well as multi-use commodities: as it is brought out in the Hoover records of the information of companies.

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Starting with the competitive environment, there are rival firms in the same industry of the manufacture of household goods as W-40 company. One of them is the 3M company. It is a large conglomeration that is headquartered in Minnesota. Its name stands for Minnesota Mining and Manufacturing Company. It deals in consumer goods, worker safety products, as well as health care, hence seen as a chief rival to the W-40 company. To show the large extent of the company it can be observed that it makes a gross revenue of $ 31,657 million, alongside the profit margin of 15.35%. Its et operating cash flow sums up to a region of $6,240 million. It was formed following the dissolution of several firms dealing in the same line of household goods and services, with the primary aim of forming a formidable front to optimize on the specifics of the market, alongside having collective suppliers and organized business environment in the industry having minimized the competition level. Such a huge company is, thus, in competition with W-40, whose gross revenue is at $ 408.52 million as per the end of the year 2018 statistics. Also, its net profit margin was at 15.96% while it's operating cash flows summed up to %37.08 million. There is a second chief rival firm of W-40, which is the Church & Dwight Company, which is also the top competitor. According to the 2018 financials, it recorded the gross revenues of $3,776.20 million, the net profit margin of 19.69%, as well as the net operating cash flow of $681.50 million.

Regarding the external environment affecting the W-40 company, there are aspects of the economy, government regulations, technology, as well as the demographics. It can be understood that W-40 mainly deals with solvent products, where the government has put in place measures to ensure that such products are safe or human consumption. Since there are drinking water solvents, there are government policies concerned with food safety. In such a context, it regulates on the nature of components that should be involved as the consumption water solvents are being manufactured, offsetting the arising of deadly alteration of human health following the consumption of harmful chemicals in the water. W-40 is obliged to operate under them for its license to continue being valid. Otherwise, it will be revoked. There is also an aspect of the technology, where there are the arising methods of increasing productions with lower costs in the optimization of resources for raised revenues. The company has tried to adopt the use of machines to uphold its efficiency.

Conclusion

In conclusion, it can be observed that various competitive and macro-environmental factors affect and shape the business operations of W-40, including the existence of rival firms such as 3M and Church & Dwight companies, as well as the existence of government regulations on its operations respectively. When they are dully considered, there shall be the forging of mechanisms to optimize its efficiency following the conditions of such factors.

Reference

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