Situational Analysis of a Cleaning Industry-Sample for Students

Question: Discuss about the situational analysis of a cleaning industry in Canberra. Answer: Introduction This case analysis discusses cleaning businesses in Canberra. A cleaning company can consist of serving body corporate or end of lease cleaning and serviced apartment. This study will address marketing mix strategies and factors of the uncontrollable environment such as political force, economic force, socio-cultural force, legal force and technological force. The analysis will also cover the strengths, weaknesses, opportunities, and threats that are likely to be found in cleaning businesses (Boumans Davis, 2010). Opening a cleaning business in Canberra is a big opportunity because it is the capital city of Australia and therefore highly populated. It is clear that the new business is likely to face a lot of competition from already established cleaning industries like Marks cleaning industry, Houzz, Blue cleaning group and Home Giraffe. Michelle is likely to succeed in the business since she has already had an experience in the cleaning industry. Industry overview The cleaning industry is one of the leading industries in Canberra. It began with the aim of helping people who feel they have no time to carry out house chores. The industry covers a range of cleaning services to their clients. Services include overall house cleaning, cleaning appliances, vacuuming and mopping, disinfecting and other services. The target market for offering cleaning services is mostly a two income family and where one spouse works, but the other has no desire of cleaning. The cleaning industry has few players both in Canberra and even the entire world. Many people in Canberra and even the entire world have had needs for the professional cleaning services. However, the services have not been evenly distributed because these service providers have concentrated more on the rich thus forgetting the middle-class people. The industry is advancing, and currently, most cleaning companies are adopting the best available cleaning technologies to realize effectiveness and increase productivity. Factors of Uncontrollable Environment These are factors that happen within our business environment that one has no control over. These factors determine day to day activities of the firm. Due to these existing factors, one needs to check and regularly analyze the environment in which they are running their businesses (Cameron, 2014). Because of the changes, PESTLE (Political, Economic, Socio-cultural, Technological, Legal and Environmental) analysis is carried out to know where the market currently stands. Political forces This involves the political situation of a country and how political situations affect running of businesses in the country. The leadership that is in the country impacts how the business is carried out because they are the ones that come up with rules and regulations to run businesses. When opening a business, there is need to consider the following factors; taxes law and tariff, government policies, entry mode regulations and stability of the nation (Booker, Bontis, Serenko, 2008). Canberra is in Australia and therefore, Michelle can start a cleaning business comfortably because the environment is politically stable and government policies favor the business. Besides, there are no stringent laws that exist in Australia which may contradict the operation of the business. Economic forces The prevailing financial state of the business has a significant influence on the success of the business. The economic conditions of a particular business context influence the profitability of the firm. Some of these economic factors include inflation rate, interest rate, credit accessibility, unemployment rates and monetary or fiscal policies. Analyzing the economy of a business can help Michelle come up with different strategies that are in line with changes that may occur in the firm. In Canberra, cleaning services have low demand when people are having holidays because they can do the work themselves, but sometimes they are high when it is around Christmas. Checking out unemployment rates can help one know how to access employees (Barry Elizabeth, 2017). Socio-cultural forces Every place has its way of thinking and carrying out activities. These differences bring out varied attitudes in people and therefore, affecting selling of products and services. Cultural implications of the distribution of wealth, education levels, gender, domestic structures and social lifestyles of the people Canberra can help Michelle predict the behavior of her potential customers. Canberra is made up of different communities of people who do not have social-cultural practices that are contrary to the cleaning business. Thus, having a cleaning business is an idea that will not face social-cultural challenges since it is easier for the people to understand and adopt the services (Wooliscroft, 2011). Technological forces Technology is changing and advancing every day. These advancements have a great impact on businesses. Carrying out an analysis of these factors will keep the business up to date with the advancements. Because of changes that come up every day, businesses should get connected all the time (John, Katherine Jocz, 2012). This involves knowing discoveries, rate of technological obsolescence and advances, and innovative technological platforms. This helps business leaders understand how consumers react to different kinds of trends in a cleaning business, create a website, face book pages, and twitter handles to market their services and also know how customers feel about the services offered (Milisavljevic, 2013). Therefore, Michelle needs to adopt the best technology in the cleaning industry to ensure that they can deliver the best. Legal forces A business leader should always be aware of the rules and regulations that cover their business. This involves product regulations, employment regulations, competitive laws, patent infringements and health and safety regulations. Legal factors change from time to time, and they affect business environments. The legal forces in Canberra are not too strict on the cleaning industries or businesses, but it has set time from them to carry out their work. For the security purposes of customers, property time is limited so the thieves should not take advantage. The business has to be fully registered for it to run (Hanssan, 2012). Environmental forces The geographical location of a business influences its success and profitability. The climate changes in the region affect day to day activities of the business. Waste disposal in the area creates a particular image to the customers in that they will intend to consider it clean or dirty. The market should work toward ensuring the environment give customers the correct attitude for the business. A cleaning business, in this case, should start by showing how clean and organized they are for customers to hire them (Foo, 2011). Competitor analysis For business leaders to understand their competitors well, they need to carry out competitor analysis to know where the strengths and weaknesses of their competitor's lye. Knowing strengths and weakness will help the business establish opportunities and threats that face their opponents, therefore, have an advantage. Identifying the current and possible future competitors will help one come up with a good marketing strategy knowing that there is a threat a head and another one coming. Some of the main competitors in the cleaning business in Canberra are Marks cleaning industry, Houzz, Blue cleaning group and Home Giraffe as they are already established and are known by customers. To successfully establish a cleaning business in Canberra, the entrepreneurs need to know the existing business players and also determine the potential of others arising. This is the main aim of carrying out competitor analysis (Barry Elizabeth 2017). The objective of carrying out this analysis is to have a good picture of the market and find out ways of getting your customers and offer services that are above those of competitors. Knowing about the competitor's objectives can help predict their reactions to different competitive moves. This also helps know the forthcoming trends in the business (Karniel Reich, 2011). This analysis will help in developing strategies that can enhance growth, diversification and extension plans for the business. Since it is also going to be a new business that customers do not know about, there is need to use direct promotion or advertising for customers to get acquainted. These way customers will be able to learn about the business (Mankiw Taylor, 2011). Customer/ Client analysis The customer is the cornerstone of any business. Without the customer, there is no business because they are the ones that buy the products. Before starting a business, one has to know the target customers, needs and desires of the customers and establish whether the products or services provided satisfy their needs. When carrying out this analysis, business leaders should understand the demographic profile of the customers such as their age, location and gender. For example, for cleaning services, men who are bachelors are the ones that are likely to use a lot of their services. It will not be convenient if it is located far away from them (Charles, 2012). Customer behaviors can be determined through this analysis. It is important to know what customer like to obtain from you and your competitors. Look out for the competitor that every customer likes and know what they offer (James, 2014). There are clients who value price than quality and vice versa. There are those who look for the reliability of the products or services. The location of the business determines reliability and Canberra is a good place as customers can easily access. Customer analysis can identify the group that is likely to be the best customers and in this case working families. Businesses can know how to acquire new types of customers like convincing women importance of calling one to clean for them. A business enterprise can know how to improve customer service, come up with effective campaign planning, and increase their market share and therefore increasing overall profitability. For example, Michelle can decide to set up day to offer free cleaning services to loyal customers. SWOT analysis There exist both internal and external factors that affect the business. This acronym stands for strength, weaknesses opportunities, and threats. Carrying out this analysis can help organizations develop a robust business strategy because companies consider business strengths and weaknesses of the enterprise, as well as opportunities and threats available in the market place (Chermack Bernadette, 2007). Strengths and weaknesses alter the business internally while opportunities and threats affect the business externally. Internal factors can be the location of the business, reputation, and relationship between employees and employers because they can be changed. External factors are example competition and prices as they cannot change (Clarke, 2007). Strengths help an entrepreneur determine the positive things in the business. This can be tangible or intangible. Strengths are the capabilities of a business which can be maintaining good will with customers, services offered, finances, brand loyalty and human competencies. A cleaning company should work towards having a good relationship always with their clients. That is through carrying out their cleaning services to perfection (Blythe, 2009). Michelles business idea is likely to have a lot of strength such the chance to embrace the latest technology in the market among others. Weaknesses are the negative things a business may be facing. They are things that make the company be unable to accomplish their objectives or aim. They reduce the influences on the success and growth of the firm. These factors can be insufficient facilities, poor decision making and poor services offered due to lack of motivation. Michelles business idea is likely to have weaknesses such as a brand name which is not yet established among others (Khan, Munir, Willmott, 2007). Opportunities arise from the business surroundings. The business should take advantage of the surroundings to come up with strategies that can bring in more profit and give a competitive edge. A business can build opportunities using available strengths and use the opportunities to deal with weaknesses. Cleaning businesses should grasp any opportunities available for example if a competitor becomes reluctant, the company should take that advantage and even offer extra services they do not usually offer (Kerr, Janda, Pitts, 2009). For Michelle, the business is likely to have opportunities such as fewer competitors in the market and also the potential to grow further. Threats come up as a result of the external environment making the business unreliable and non-profitable. They are uncontrollable and can lead to the end of the firm. Companies should use their strengths to minimize their weaknesses and therefore avoid threats. Threats in the cleaning industry can be the changing technology and increased competition. To avoid this, businesses should be up to date with changing technology, like having new cleaning materials, and ensure competitors do not go ahead before them References Barry M. Elizabeth P. (2017). Regulatory Entrepreneurship. Southern California Law Review 90(1) Blythe, J. (2009). Key Concepts in Marketing. London: Sage Publications. ISBN978-1-84787-498-6. Booker L., Bontis N., Serenko A. (2008). "The Relevance of Knowledge Management and Intellectual Capital Research." Knowledge and Process Management.15(4): 235-246 Boumans, M. Davis, B. (2010).Economic Methodology: Understanding Economics as a science, Palgrave Macmillan, pp. 129-133 Cameron, B. (2014). Management. Strategic Leadership Review, pp. 22-27. Charles L. (2012). Essentials of Marketing (7ed.). Mason, OH: South-Western Cengage Learning. Chermack, J. Bernadette K. (December 2007). "The Use of and Misuse of SWOT analysis and implications for HRD professionals".Human Resource Development International.10(4): 383399. Clarke, T. (2007)."International Corporate GovernanceLondon and New York: Routledge,ISBN 0-415-32309-6 Foo, M. (2011). "Emotions and entrepreneurial opportunity evaluation." Entrepreneurship Theory and Practice, pp. 375-393. Hanssan, A. (2012). "Tax policy and entrepreneurship: empirical evidence from Sweden." Small Business Economics. James W. (2014). Your Small Business Adventure: Finding Your Niche and Growing a Successful Business. ALA/Huron Street Press. ISBN978-1-937589-44-8. John A., Katherine E. Jocz (2012). All Business is Local: Why Place Matters More than Ever in a Global, Virtual World. Penguin. Karniel, A. Reich, Y. (2011).Managing the Dynamic of New Product Development Processes. A new Product Lifecycle Management Paradigm. Springer. p.13.ISBN978-0-85729-569-9 Kerr, M., Janda, R., Pitts, C. (2009). Corporate Social Responsibility: A Legal Analysis. Toronto: LexisNexis. ISBN978-0-433-45115-0. Khan F., Munir K., Willmott H. (2007). A Dark Side of Institutional Entrepreneurship: Soccer Balls, Child Labour and Postcolonial Impoverishment. Organization Studies 28/7, pp. 1055-1077. Mankiw, N. Taylor, M. (2011). Economics (2nd ed., revised ed.). Andover: Cengage Learning. Milisavljevic, M. (2013). Value oriented strategic marketing. Marketing, 44(4), 299-309. Wooliscroft, B. (2011). Marketing Theory as History. Marketing Theory, 11(4), 499-501.