Mba580 Forces And Trends
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Forces and Trends Research
University of Phoenix
Dr. Kenneth Sherman
Forces and Trends Research
Remote environment is a subcategory of the external environment, which affects many aspects of our culture and our lives. Remote environment consists of economic, social, political, technological, and ecological factors. These factors creates trends and forces that drive our culture in many ways such as high fuel prices, the housing market, retail sales slowing, and car technology. Trends are defined as the general direction something starts to move in or a current style. (www.dictionary.com)
A lot of trends are wonderful and positive like the trends we are seeing with Microsoft, Google, and Apple technology, but the economic trends we are seeing now is very ugly and scary. Throughout this paper we will examine some of the current trends, discuss how they affect our individual organizations, and determine a strategic plan to overcome the trend. Lastly we will define strategic adaptability for organizations and analyze its relevance to the issues and opportunities facing our companies.
Gas Prices —
Rising fuel cost have caused many to question our nation’s dependency on foreign oil. Much of this has come to light because of the war in Iraq and our negative relationship with Venezuela, one of the United States primary sources of fuel. It has many wondering why we have yet to find an alternative source of fuel. The fuel is controlled like any other market where there is money to be made. It becomes an issue of supply and demand. The demand is great, especially here in the US, but supply is depleting significantly every year. Current gas prices are at an all time high and there is really no end in sight for consumers. People tend to only think of the price at the pump that is affected but heating oil and natural gas prices are higher as well. A poll was taken, and sadly 31% of those polled that higher fuel costs were causing a hardship for them.
“America’s gasoline and fuel consumers are facing what could become the most
expensive Spring/Summer driving season yet, despite declining gasoline demand, record
stocks, more refining capacity, and growing volumes of lower-priced ethanol. While these factors should contribute to lower prices, the falling value of the dollar, OPEC resistance to increasing production, and speculation on Wall Street that have pushed the price of crude oil above $100 per barrel maintaining the upward pressure on gasoline prices.” (www.consumerfed.org)
Higher fuel costs eat away at the profits for businesses because their suppliers increase the cost of goods in order to compensate for their own increased operating costs. Jamba Juice relies on deliveries of fresh fruits three times a week. The also rely on deliveries of frozen yogurt, napkins, cups and straws, and t-shirts and other good sold in their store. The stores are small and have very little storage room so they use the just in time (JIT) method. Unfortunately for Jamba Juice customers, the cost is being passed on to them. Jamba recently raised all of the drinks prices by fifteen cents, which may not seem like a lot but it adds up over time, and may ultimately their customers decision to buy there.
Farmers and Corn —
Farming and farmer’s play an extremely important part in our lives, and we take for granted what they do and how much we need them. We rely on them to grow our food, to grow materials for our clothes, and now to grow products that can be used as fuel. Farming has been a way of life for many Americans but it is not always profitable. A rough winter can wipe out an entire years work, not to mention heavy competition, and decreased demand for a particular vegetable or fruit. Sometimes farming can be a life of hardship but now that may be changing for many farmers.
“Driven by growing ethanol demand, U.S. farmers intend to plant 15 percent more corn acres in 2007, according to the Prospective Plantings report released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS). Producers plan to plant 90.5 million acres of corn, the largest area since 1944 and 12.1 million acres more than in 2006.” (www.nass.usda.gov)
The practice of blending ethanol will gas has increased dramatically over the past four years. The US is producing ethanol in large numbers and it has decreased some of the demand on refineries, but Americans are seeing the financial benefit and worse we are losing valuable farming land to corn crop. It because a supply and demand issue again because with fewer farmers growing potatoes, onions, strawberries, and other produce that in turn drives up the price of these products.
The price of fruits and vegetables directly impact Jamba Juice because those are good used to make their products. Jamba drinks are made of fresh fruits and some vegetables, and the cost they pay for those products can and will affect their bottom line. Jamba has several options for addressing future cost of fruit due to the growing trend of farmers growing corn. The first option would be to adjust their drink selections based on fruit pricing. For example if strawberries are in high demand and pricing is high then Jamba could eliminate drinks with this fruit, replace the fruit in the drink, or charge more for those particular drinks. A second option for Jamba would be to settle for the frozen variety for some types of fruit. It would lower in cost and still offer the same taste to customers without them having to pay more. Either way Jamba, and people in general will have decide what we will do about our purchases of produce as this trend continues.
Purchasing Habits —
Inflation and recession are ugly words, and no one likes either of them, but it seems that both may very well apply to the current US economy. Between a failing housing market, lackluster performances in the stock market, and high prices at the gas pumps, Americans are tapped out,