Riordan Virtual Organization and Environmental Scan Paper

Riordan Manufacturing Environmental Scan
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Riordan Manufacturing Environmental Scan
According to the data provided, Riordan Manufacturing has sustained a solid sales figure over a considerable period. This means the company has numerous external and internal factors that are working in their industry. However, a stable value without rising can also indicate a cause for concern. This means that the company is not penetrating effectively into new markets and therefore its competitive advantage against other manufacturers is weak. Riordan has to focus on its internal environment that will influence its performance because these factors are easily manageable within the firm. These factors are therefore essential for success because of its ease of manipulation. (“Strategic Planning: What are the basics of environmental scanning?”, 2012)
Some of the competitive advantages that Riordan shares with the apparel manufacturers discussed last week include dominance. When established in 1991, the company enhances its differentiation and positioning strategies by producing a different type of quality than what was regularly provided. As a result, the company established loyalty within a particular market segment that requires a certain quality of the product. Historical data shows that Riordan has 15 to 10 regular customers that contribute significantly to the company’s revenue. These clients include government agencies, hospitals, and big industries.

This segment is a target to contribute to 60 % of the company’s growth. Establishing a market cap is an area where long-term loyalty is expected is a bug advantage for a company.
The popularity of the brand means that the brand does not have to use a lot of funds for advertising. In addition to this, price positioning contributes significantly to the companies competitive advantage. For its quality, Riordan continues to offer competitive prices globally. To emphasize on this, the executive management allows sales team in different regions to make necessary changes to the selling price depending on the economic climate in the region. This increases the decision-making process and therefore means that the company can serve its customers more efficiently than competitors who are more centralized. The pricing competitive advantage draws heavily from its location. Operating from China, the company can benefit from cheaper labor and transporting system. Global trade agreements enable the company to work efficiently in the US thus reducing operational costs and increasing efficiency.
The chief strategy that Riordan anticipates is a growth in the US, advancement in technology and enhancing customer loyalty. The technology works very efficiently in the two objectives. Fast of all, technology is used to advance the quality of the products on sale. Investment in better technology also means that there can be the utilization of energy efficient machines that work with faster rates, this reduces operational costs, increases units produces per predefined time and ensures the assurance of quality for the consumer. (“You Need an Innovation Strategy,” 2015) Failure to invest in this new technology could mean that other companies will overtake Riordan is quality and spread of production resulting is shifting of the client.
Technology also helps in maintaining loyal clients as well as extending the market share. Social media is one of the most useful tools of communication in the modern world. Using social media, an individual can communicate details to multiple people across the globe. In addition to keeping in touch with the clients, faster communication technology enables the company to build a cohesive management team. This eases the process of decision making and therefore increases efficiency. (“You Need an Innovation Strategy,” 2015)
The move to establish the manufacturing industry near the river banks is a wise idea. This reduces transportation cost and increases profit margins. The fact that sales have not increased in China, as well as the specificity of the company’s market segment, shows that the company needs to start diversifying its products. So far, the company has probably worked with the notion that one quality size fits all. However, pricing is a major factor in positioning. The factor is very different in various economies. While a better economy may identify as undershot with a particular product, another one will be considered overshot because people’s financial status do not allow the purchase of specific qualities. The unsuccessful attempt to enter the Chinese market may mean that pricing is above the accepted value. (“WTO | stimulate economic growth and employment,” 2016) To be able to penetrate such markets effectively, the company should do a rigorous research on strategies that are being used by other competitors.
Although the growth of the primary market (US) is essential at the moment, the strategy for increasing sales is necessary for stability. This is because foreign trade is affected immensely by external sources. If global commerce changes, there may be adverse effects on a country whose main market is foreign. A good example is the fact that most Americans feel that international trade diminishes the US instead of building it. (“WTO | stimulate economic growth and employment,” 2016) There has been an uprising that condemns importation of goods produced externally even by domestic companies. If future policies discouraged this kind of trade, Riordan’s market structure would fail. It is, therefore, crucial that a local market share is built. 

References
Strategic Planning: What are the basics of environmental scanning?. (2012). SHRM. Retrieved 4 October 2016, from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/cms_021670.as
WTO | stimulate economic growth and employment. (2016). Wto.org. Retrieved 10 October 2016, from https://www.wto.org/english/thewto_e/whatis_e/10thi_e/10thi03_e.htm
You Need an Innovation Strategy. (2015). Harvard Business Review. Retrieved 10 October 2016, from https://hbr.org/2015/06/you-need-an-innovation-strategy