ENVIRONMENTAL SCANNING 2
Environmental Scanning
Environmental Scanning
According to "Strategic Planning: What are the Basics of Environmental Scanning?" (2016),”Environmental scanning is a process that systematically surveys and interprets relevant data to identify external opportunities and threats” (para. 1). This report will evaluate the internal and external environments of your selected company, the United States Federal Reserve under the new government of President Donald Trump using an environmental scan, establish long-term goals and objectives, strategy formulation, the markets that the company will pursue, the unique value that the company will offer in the markets, I will also discuss the resources and the capabilities that are required, I will also discuss how the company will capture value and sustain competitive advantage over time.
For the business management strategy I will consider the cost and differentiation advantages, describe the corporate strategy, investigate vertical integration, describe strategic alliances, detail the company’s competitive advantage and generate an organizational chart for the United States Federal Reserve.
Establish Long-Term Goals and Objectives
According to Atkeson & Ohanian (2001), the United States Federal Reserve aims to calculate inflation for the country of the United States based on something called the Phillips curves. These Phillips curves are analyzed to calculate on a monthly basis the fluctuations in the market and how this affects the rate of inflation for the entire country of the United States.
The research of Atkeson & Ohanian (2001), did not predict the financial crisis that would hit the United States in 2010 or the years surrounding it. Many Americans lost their homes and their jobs due to companies shutting down because of the fiscal disaster during that time. The financial markets surrounding that time period was so dismal that even President Barack Obama had to step in and bail out the top banks in the world. All of these internal factors put the United States Federal Reserve in a constant state of flux during this period and the Phillips curve was at an extremely high due to rate the high inflation rate at that period in the United States.
Strategy Formulation
According to Blinder (1996), the United States Dollar (USD) does have its dips and falls on the international market. However, its competitive advantage on the international market tends to remain consistent and stable over many decades since the 20th century of the world, as well as after World War II.
The mission of the United States Federal Reserve is “mission of the Board is to foster the stability, integrity, and efficiency of the nation’s monetary, financial, and payment systems so as to promote optimal macroeconomic performance” (Board of Governors of the Federal Reserve System, 2017). The values of the United States Federal Reserve are public interest, integrity, excellence, efficiency and effectiveness and independence of views (Board of Governors of the Federal Reserve System, 2017). The strategic goals are as follows:
The Board has six primary strategic goals with interrelated and mutually reinforcing elements:
1. conduct monetary policy that promotes the achievement of the Federal Reserve's statutory objectives of maximum employment and stable prices
2. promote a safe, sound, competitive, and accessible banking system and stable financial markets
3. administer federal consumer financial protection laws that fall within the Board's statutory authority, including those designed to encourage regulated financial institutions to help meet the credit needs of their local communities
4. foster the integrity, efficiency, and accessibility of U.S. payment and settlement systems
5. provide oversight of the Reserve Banks
6. foster the integrity, efficiency, and effectiveness of Board programs and operations (Board of Governors of the Federal Reserve System, 2017).
The urban density and high market value of American companies, businesses and enterprises, whether they be banks that are governed by the United States Federal Reserve, computer organizations or infrastructure, state governmental practices, the food industry, the housing industry, the automobile industry or the market for education, the high urban density that tends to be characteristic of the United States puts the United States Federal Reserve at a competitive factor globally in comparison to such countries such as Greenland and their banking industry with a population of approximately 55,000 when converted into American dollars is the average salary of an American in the United States. This leads naturally into a discussion of the United States Federal Reserve’s power on an international scale.
The United States Federal Reserve is one of the most powerful entities in the world when it comes to the international and global banking industry. It is for the reasons already mentioned such as the power of the USD and its population mass that account for this.
The Markets the Company Will Pursue
One of the ways that the United States Federal Reserve monitors how well the markets in the United States are is whether or not Americans are working. If Americans are working and the unemployment rate is non-existent in a perfectionistic world, then the United States Federal Reserve would know that things are going well because this means there is money in America.
Here is the Consumer Price Index for the United States according to the Federal Reserve:
United States Prices / Last / UnitConsumer Price Index CPI / 242.35 / Index Points
Core Consumer Prices / 249.36 / Index Points
Core Inflation Rate / 2.10 / percent
GDP Deflator / 111.64 / Index Points
(Tradingeconomics.com, 2017).
Resources and Capabilities Needed
Some of the external factors that are present with the United States Federal Reserve are the business it does with other countries such as Latin America and Japan. In 1993, Latin America began benefiting greatly from a higher exchange rate with the American dollar, as well as increased capital flow within the continent due to its business relationship with the United States Federal Reserve. In comparison, there was an unfortunate financial crisis in Japan which greatly affected the United States Federal Reserve’s markets globally and its external environment. The external environment of the United States Federal Reserve has done much to reach out to the young people of America to educate them about the importance of financial matters which has created a positive external environment of more financial awareness among young people in America. The efforts of the United States Federal Reserve to educate young people towards financial matters are spreading throughout the world. Other countries such as Canada, parts of Europe, Australia and China are also following the lead of the United States Federal Reserve to educate their young people towards the value of money and how to best use it in their lives which shows a positive external role that the United States Federal Reserve is taking on (Johnson & Sherraden, 2007). The markets had predicted that with President Donald Trump, the new President of the United States that the markets of the United States would be in flux. At the current moment these markets are stable and have not been any great flux in the markets since the world is now aware that President Donald Trump is the incoming President of the United States.
Unique Value in the Markets
Another way that the United States Federal Reserve monitors its effectiveness is how well the economy is doing. The Great Depressions that have affected the United States during the 20th and 21st centuries have greatly affected the reputation and the business position of the United States Federal Reserve. These depressions effectively put the United States Federal Reserve in a tail spin when they happen and the resulting factor is that the Federal Government has taught the United States Federal Reserve many lessons to help avoid such depressions in the financial market in the United States from happening again.
Competitive Advantage
A good tax rate for Americans means that the United States Federal Reserve is again doing a good job and the books are close to balancing for this financial company because then they do not need to tax Americans in a high manner in order to pay for overspending or any misdeeds of the government.
Organizational Chart for the United States Federal Reserve
Here is an organizational chart for the United States Federal Reserve:
Conclusion
Although the United States Federal Reserve is not considered your typical company it holds a lot of importance as a corporation of the United States with much influential power. This report shows how a company’s success is affected by internal and external environments, as well as the importance of competitive advantage and the measurement guidelines of strategic effectiveness.
References
Atkeson, A., & Ohanian, L. E. (2001). Are Phillips curves useful for forecasting inflation?
Federal Reserve Bank of Minneapolis. Quarterly Review-Federal Reserve Bank of Minneapolis, 25(1), 2.
Blinder, A. S. (1996). The role of the dollar as an international currency. Eastern Economic
Journal, 22(2), 127-136.
Board of Governors of the Federal Reserve System. (2017). Missions, Values and Goals of the Board of Governors. Washington: United States Government. Retrieved from: https://www.federalreserve.gov/publications/gpra/2011-mission-values-and-goals-of-the-board-of-governors.htm#subsection-142-21B7B547
Johnson, E., & Sherraden, M. S. (2007). From Financial Literacy to Financial Capability Among
Youth. J. Soc. & Soc. Welfare, 34, 119
Strategic Planning: What are the basics of environmental scanning? (2016).
Retrieved from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/cms_021670.aspx
Trading Economics.com. (2017). United States Consumer Price Index (CPI). Online: United
States. Retrieved from: www.tradingeconomics.com/united-states/consumer-price-index-cpi