As consulting firm, we will be interested in assessing the external societal environment which involves how the company will safeguard or upkeep social, cultural, demographic and environmental factors which directly or indirectly affects its performance. In the social set up, we will look at how the society is benefiting form the work of the company (interactive data .com. in every operation, the company should ensure that the social issues affecting the clients should be addressed, as it is the main pillar of corporate social responsibility. Cultural issues should also be assessed and the implication it has on the society noted. This will go a long way in making the company to be in peace with the society.
In the report we shall also deal with external industry environment, opportunities and threats for the organization, implication of future strategy of the organization (global challenges and tools and techniques will be highly addressed.
Interactive Data is a very successful company that has literally grown into a global brand with no less than 2400 employees who are dedicated and focused towards delivering qu7ality data services to various companies. The company is very committed towards creating a sustainable environment where business easily flows and benefits every individual. The company also delivers a very comprehensive and specialized data on financial issues and is designed upfront to meet the various needs of products and services either in the back or front offices.
It also specializes in handling market pricing, ultra low latency data and advanced analytical tools for managers. They are determined to provide comprehensive financial solutions to the ever expanding global business empire.
In analyzing the external societal environment of Interactive data. Com, we are going to specifically look at how the company relates to the market especially the users of the Interactive data services. The company for a long period of time has been able to relate well with the market, especially financial companies in the whole world through its proactive roles it has on improving the customer relations.
Under industrial organization view the major areas in which the company should improve on is how to make suppliers satisfied and increase their bargaining power, how to win the confidence of customers, and how to overcome the threats of the new firms which pose competition to the firm.
Under the bargaining powers of suppliers, it is often advisable that the company should avoid markets where there are high bargaining powers of suppliers. The reason is because such markets are not profitable hence making the company to get the risk of making loses and losing a firm grip in the market. The strategy that the company should adopt is the avoidance strategy where it should try as much as possible tries from operating in such type of markets. The role of any business is to maximize profits. To maximize profits, firms should produce high quality products and services. Therefore for Interactive data.com there financial services should not only be of high quality but should be advanced. This will enable them to have a competitive edge over the competitors in the same business field.
Another substantial advice that Interactive Data should follow is to use the principle adopting barriers to entry. What I mean here is that the company should try so much to retain its market by ensuring that o9ther competitors will not do well in the area of business operation. The barriers to entry are simply the economic forces that usually provide disadvantage to the entrance of new firms to the market. The forces may be in terms of government regulations, patents, or high sunk costs. Establishing a solid existence in almost every country of the world will build high level of brand loyalty, hence making customers to develop a high sense of the company, which will also act as the barrier to entry ( Richards, 1992).
Interactive data company for a long time have been active in ensuring that there is a nourishing relations between the company and the social environment in which they are working with. The reason is because once a company directs its attentions towards caring for the external environment in which they are working with; there are high chances that their profitability levels will go up. Interactive data have been encouraging social responsibility by being an equal employment partner, and taking part in environment sustainability programs. It is very good for this firm to therefore adopt a policy of advancing its interests to the external environment, like improving the living standards of people, environmental clean up, and AIDS awareness campaigns. Whenever they do all these customers will build confidence about the company and will therefore help the company grow, hence boosting profitability.
Firm’s general attitude towards the environment can be categorized into on e major broader field that is responsibility. Social responsibility considers various aspects of security and quality of products, child labor, and firm’s impact on the environment. The important debate is that interactive data.com should provide to the society which is actually their market. Here the society’s behavior towards the firm will be positively affected.
Interactive Data Company has also understood that it is only through managing the social and environmental values that it can be able to increase its business’ long term value. Social environment will improve the company’s portfolio and hence lowering the chances of losing a firm grip in the market.
In turn, a number of advantages of integrating the environment into forefront in the business include; the quality of the product will improve, there will be improved relationship with the community, there will be easy access to the new markets and more so advantages which emanates from anticipating competitors and legislation.
External industry environment
External factor valuation matrix is a major strategic management tool which is basically used to assess the current business conditions. It is a useful tool that enables the management to visualize and prioritize the threats and opportunities which the business is facing. What should be done here is to weigh the company’s threats and opportunities, in the rate of 0 to1 where o means that the company’s roles are not influential while one means that the company’s roles are very influential. Next, interactive data ratings of responsibilities, opportunities or threats are assigned 1-4 rating where 1 means the lowest score of the factor and 4the highest score. The companies factors have been good for example in a way they deal with the environment, the way they interact with customers, the quality of their services, technology there are using, business practices, management strengths, and investor relations policies. The strengths mainly come in form of industry consolidation (11%), increase in business performance (12%), timeliness of financial analysis and other data provisions (10%), growth of low cost data services, particularly to young companies (8%), increased demand in USA and UK (16%). The threats include, (as weighted in the External factor evaluation matrix; declining margins (10%), government oversight (5%), economic downturn (15%), new tax systems( 5%), climbing costs of operations (5%). Totaling all these factors gives 100% and the total weighted score is 2.46 which shows that interactive data’s business somewhat had less than the average ability to respond to external factors.
What should also be include in the Interactive data’s EFE matrix include socio, cultural, demographic and environmental variable, economic variables, and political, business trends, government and legal variables. When we talk of socio, cultural, demographic and environmental factors, we mean, can Interactive Data be able to provide services to all customers, regardless of race, age, marital status, or ethical inclinations. Interactive data should be in a position to provide being biased and concentrate on providing financial analysis services without bias or prejudice, favor or any other impartiality aspect which might occur. Being a global brand implies that the company should serve each and every individual with respect and dignity. Economic factors includes how interactive data comp-any response to changes in level of savings in the economy, number of new companies springing up, level of disposable income, economies of scale, product differentiation and level of competitiveness. So far interactive data had been able to show a recommended level of competitiveness, as per Michael Porters Five Sources Model.
The political, government, business trends and legal factors include trends in globalization, internet and communication technologies, international trade regulations, taxation and world wide product and service demand. But according to various analysis on external issues facing the company, and particularly as reflected by external factor evaluation results, it means that the company should use aggressive and intensive tactical strategies that would particularly focus on market penetration, product development and market development. Since not all companies have subscribed to interactive data’s services, the company should be able to advertise itself fully, so that its services can be known and used hence boosting market penetration of the company. Form operational perspective of the company, forward and horizontal integration should be considered for best results. Strategic analysis also shows that the company (interactive data) has low costs of rejuvenating the business; hence it should attempt to improve the business. In other words, the company should ensure that aggressive cost management should be applied in order to improve cost management hence promoting the efficiency of the firm (Edwards, 2006).
Opportunities and threats for the organization
Since I have talked about the threats and opportunities facing the company above it are worth noting that interactive data should ensure that it has to build a string network of existence in every country of the world. The strengths the company has include highly consolidated industry and global existence. The company assists various global companies to analyze data using its advanced financial analysis tools. This fact gives the company a strong competitive edge and also a wider avenue for growth and expansion. The ever expanding global business empire and the ever increasing demand for high technology financial logistics is another opportunity for interactive data. Ever since its formation the company has committed itself towards the provision of quality financial logistics to many companies. Coupled with the fact that the company is timely in making financial logistics, it has lead to increased confidence from the users of its services (Porter, 1976).
The company should also ensure that its financial services are up to date and accurate. Company’s world wide wants their data to be prepared and delivered in the right time. Therefore the strategic realignment of the company in future should ensure total transformation of company’s threats into opportunities and weakness into strengths. What cannot be left unmentioned is the fact that interactive data should live according to the name of the organization that is to be interactive- in the sense that the data h they have produced should be able to communicate more about the company.
Implication for the future strategy of the organization
The essence of market structure conduct performance, being part of strategic consulting, has to be used by the company in trying to find the answers as to how the firm will interact and eventually compete with other established data firms at different market situations. Results of the interaction should also be analyzed, and should be made to be consistent with market demands. In this case, there will be a rising argument as to whether or not the action should have top be taken or not. Market structure and market conduct should have to go hand in hand with each other if success in the business is to be achieved. In industrial organization, imperfections in competition are studied, and various ways in which market performance is to be fixed are highlighted. The major issue is the fact that interactive data should actively be reviewing its EFE matrix outcomes in order to ensure that the company is on toes and ready to expand and get more opportunities in the data world.