External Business Environment N. K. Luck Dental

Question: Discuss about theExternal Business Environmentfor N. K. Luck Dental. Answer: Introduction This report is about the management of the N. K. Luck dental Company in Singapore. The objective of the report being analyzing external environmental factors affects the operation of the company. As a business develops, complexities such as uncertainties and risk that are difficult to manage come along. An organization, therefore, has to change and adjust itself in the ever-changing environment increasing the need for existence of management. Management is the creation and maintenance of an internal and external environment in an organization or business whereby; individuals working in groups can do a certain task efficiently and effectively towards the attainment of certain set goals-its an outline of the general form of a business under which the organization is to operate (Hollensen, 2007). It ensures that businesses run smoothly and efficiently through better planning and effective control of various factors of production. N. K. Luck (Singapore) Ltd Company was established in the year 1985.Since its establishment, the Company has aimed at providing a one-stop dental solution for the dental clinicians and technicians. It has experienced, enthusiastic and devoted staffs that are ever eager to provide the customers with prompt technical service, updated trends and products consultancy. Some of the clinical equipment and products the company sells include Band Slitters, G-aenial Universal Flo, Heliostic Orthodontic and medicine such as Acroseal and Biodentine. The company seeks to synergize its product offerings and bring in its traditional expertise in sync with the customers new clinical needs. Its continuously re-inventing itself to bring in the latest trends in dentistry into practice. PESTEL Analysis Due to the current incessant changes in business environment, organizations have to think on their feet. As a result, in the formulation of management policies, an organization must take into account its external environment. Looking at N.K luck Ltd, there exist numerous external environmental factors that impacts its operations and which it organization has no control over and have impacts on its operations (Kotler Armstrong, 2010). In this report, PESTLE analysis was used to analyze this factors that affect the operations of N.K luck Ltd in Malaysia, Singapore. PESTLE is simply an acronym of six factors that may affect the operations of business. These factors include; Political: Any potential policy changes by the government in Singapore that does not favor the dentistry industry may negatively affect the operations of N.K Luck Company. Even when the political situation in the country is relatively stable, any changes that do not favor a good working environment by the local authorities may have serious implications on the business (Burt Starlin, 2003). For instance, unfavorable changes in employment laws, consumer protection laws, and Health and safety requirements among others may adversely affect the operations of N.K Luck Company in Singapore. Economic Factors: In Singapore there exist economic factors that affect the operations of N.K luck Dental Ltd. These factors range from inflation rate, taxes, exchange rates, trade regulations, interest rates among others. Looking at the economic viability of the Singapore market, for instance, the current cost of living has seen more clients visit public dental equipment suppliers due to the lower and affordable price being offered by government outlets. This would, in the long run, affect the profit margin of N.K luck Ltd. In addition, looking at the operational efficiency of the company a variety of economic factors arise. This includes availability of expertise, the labor cost trends, wage patterns among others that directly affect the profit margin of the business. Social Factors: Environmental factors such as cross-cultural communication are believed to play a vital part in the success of major international markets today. As the company seeks to widen its distribution and market base N.K luck Ltd will need to consider some of the social factors that directly affects its operations. Demographic pattern of the intended market for starters is one of the social factors that the company will need to analyze in order to efficiently capture potential clients. Other social factors that my either directly or indirectly affect N.K luck dental Ltd include; Education and career trends, Religious beliefs, employment levels, age distribution, e. t. c. Technological Factors: Technology has become a key factor in major organizations today. It has been incorporated in almost every department in blue chip companies (Arthur, 2009). The reality, however, has been the pace of change in technology is becoming more and more rapid. N.K luck Ltd needs to make its online presence more visible to the target audience. Online marketing is taking the Singapore market by storm, and this is an area that the company needs to invest in if its to compete with companies selling similar products and are already utilizing the online presence. The introduction of digital work space in the company is expected to cut down cost and increase efficiency in the work place. Technological advances in the business will give N.K luck Ltd more freedom to choose in management and operational decision making processes. For instance, it has been observed in similar companies that systems that are knowledge-based have helped such types of companies to make effective dec isions in real-time manner. Networking and ability to virtually connect across the world have allowed these organizations to streamline their workflow and eliminate geographical barriers. Legal factors: There are various legal factors that may adversely affect business. Some of these factors include impending or current legislations that may have major industrial impacts with regards to competition, job creation, health and safety among others. Singapore, for instance, an increase has been recorded in the numbers of bodies that regulate how organizations adhere to legislations in their fields of operation. These areas include employee welfare, consumer protection, waste disposal, taxation among others. When combined these factors, in the long run, affect the operations of N.K luck Ltd since they come with cost implications which are felt when formulating the strategy for the business Environmental Factors: Environmental conservation by corporate entities in the recent been given a lot of focus globally. No organization can now operate without first considering taking care of the environment around them. Turning a blind eye to environmental conservation by companies like N.K Luck Ltd who are believed to release waste products that may degrade the environment may lead to the incurring hefty financial penalties. Other environment factors that may adversely affect the operation of N.L luck Ltd in Singapore include weather, geographical location, climate, etc. For instance, Natural disasters or poor climatic conditions like the occurrence of monsoons that are experienced in this region may result in a high risk for operating the company. Moreover, weather conditions may cause logistical problems at specific times of the year, and this may negatively affect the operations of the business. In addition, an increasingly important environmental factor that N.K luck Ltd may face is that of packaging and waste disposal of its unwanted products. Throughout Asia, companies are required by law to remit a certain levy based on their sales to the government. This funds collected are expected to aid towards minimizing the cost and environmental impact of waste products Porters Five Forces Analysis of N.K luck Dental Company The Porters Five forces analysis is a model that was formulated by Porter Michael E. to assist in the examination of organizational situations. In this regard, it appropriate in the analysis of the position of N. K. Luck Dental Company in Singapore market. Bargaining Power of Suppliers The Singapore market is under the control of a few manufacturing firms that are located in Singapore. Their bargaining power is on the high due to because of factors such as brand recognition. In addition to this, the stiff competition has resulted in the lowering of prices of goods; however, this has come a long with an increase in the production of high-quality products. In addition to this, the ability to switch from one manufacturer to another is difficult and costly. Bargaining Power of Customers The number of potential customers (this includes both dentists and hygienists) of N.K luck dental in Singaporean market is about 6,900 making the number of customers higher than that of dental service suppliers. Also, there is a lack of product differentiation because most of the products originate from a similar producer. Price sensitivity among the consumers of dental services has also made the suppliers of dental services to keep their prices on check. The inability of the dentists to produce and supply products single handedly also reduces the bargaining power of consumers. This is because the consumers rely on the distribution services of the producers. Threat of New Competitors The Singapore market currently does not have any room for a new competitor due to the homogeneity of the products. This locks out an opportunity for new entrant since there is no room for them to adopt to the product differentiation strategy. Another shortcoming for a new entrant is that, in Singapore market, the dentist enjoy high levels of brand loyalty. In this regard, a new market arrivals will be forced to utilize the same brands that are used by the existing group of dentists before breaking from the norm. In addition, it is also evident that there is a close relationship between the present wholesalers and dentists and breaking these ties might prove an uphill task for new players entering the market. Threats of Substitute Brands. Alternative brands in the Singaporean market can only be from private label brands of existing competitors who are known to offer these products at a lower price thus compromising on their quality. Moreover, brand loyalty of dentist is high and personalized services offered by the majority of market competitors has rendered the threat of substitutes in this market insignificant. Competition Amongst Existing Players. In the Singaporean market there exist about 15 relevant competitors who compete for the market share. These players in most cases have employed similar strategies to win the hearts of their consumers. Moreover, product differentiation is relatively low, and this has led to strong price competition among players creating what market analysts refer to as a "price-wars." Recommendations Cut down the Bargaining Power of Suppliers N.K luck dental can achieve this by partnering with manufacturers who already have a strong footing in the Singaporean market. In addition, they should stand out from the rest by offering unique products that competitors do not have on their shelves. Reducing the Threat of New Competitors. The company should also purpose to do away with the threat of new service providers that may want to take over the market. They can mitigate this buy creating a strong marketing image while at the same time forming alliances with linked services. Mitigate Market price-wars. N.K luck dental company will have to come up with a strategy that will give them an edge over competitors. For starters, they should avoid concentrating on price competition and focus more on improving service quality. They can also opt to buy out a competitor to reduce the level of competition in the market. Cut Down the Bargaining Power of Customers. The company also needs to partner with the consumers of its products and at the same time work towards moving away purchase decision from the price of their products. Increasing product loyalty through provision of quality services will also go a long way in reducing the bargaining power of customers Conclusion In reference to the PESTEL Analysis, N.K luck dental will need to create strategies that are flexible to change so that they can fit in any economic situation in reference to the financial aspects of the macro-economic situation. For instance, the company will want to constantly monitor the countrys economic indicators constantly as this will give it a clear view of the markets confidence in the economy. The Analysis has also shown that organizations that are reluctant to embrace technological advances become vulnerable to competition and leaves opportunities for upcoming competitors to enter their market and snatch away their clients. As a result, the coming should embrace technological trends and incorporate it into their business. In addition, they should also note that consumer preferences and usage of products change according to technological advances thus the company should package itself to embrace technology in almost all areas of its operations. References Albaum, G. Duerr, E. (2008). International Marketing and Export Management. Sixth Edition Prentice Hall. Arthur, W. B (2009). The Nature of Technology. New York: Free Press. p.28. ISBN978-14165- 4405-0. Burt, D. Starlin, S. (2003): World Class Supply Management, Eighth Edition Feenberg, A. (2001). Transforming Technology. New York: Oxford University Press. Hollensen, S. (2007). Global Marketing. (4th Ed.) Prentice Hall. Kotler, P. Armstrong, G. (2010). Principles of Marketing. (13th Ed.). Pearson. Newton, L (2010). Guide to Pricing and Costs of Dental Supplies Business.com Retrieved from: https://www.business.com/directory/health_care/dentistry/equipment_and_supplies Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Voiculet, A., Belu, N., Elena, P., Rizea, C. L. (2010). The impact of external environment on organizational development strategy. Constantin Brancoveanu University. MPRA Paper No.26303, Retrieved from: https://mpra.ub.uni-muenchen.de/26303/