Strategic management and the strategy process

Contextual environment scenario dimensions As explained earlier the transactional and contextual environment can both have great influence on any company, so also on Compass Procurement. This chapter will focus to get a better view on scenario dimensions of the contextual environment. In the case of Compass Procurement these are primarily economical and demographic dimensions. It is highly recommended for Compass Procurement to dispatch these dimensions, to adjust or anticipate in time if any changes will occur.

Economical dimension The economical recession is ruling for more than four years now in the Western oral and has led to a decrease in the purchasing power of the Dutch consumers. Everything in the economy is connected so the recession is not only tangible for the consumers, but also for banks and other companies. In this time more and more companies are forced to cut down their expenses. One of the options that is considered by a lot of companies from the moment that the recession has started is producing their products in other countries, where the production costs are considerably less.

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Milliner for instance, announced in 2010 to move the production of Knox soup from Ass to a place in Poland. An inevitable consequence of this is arced dismissal of employees. From CBS (Central Bureau Statistics) statistics of 2009 we can see that there were twice as much people fired in the same period a year before, that is to say 88. 000 employees in 2009 were fired against 44. 000 in 2008. Compass Procurement has a competitive advantage in this because of the office in Shanghai, but they are still affected by the recession, because they focus on Dutch business-to-business clients.

Another economical factor that is of significance for Compass Procurement, is that China is an upcoming economy. A lot is invested in technology and education in China nowadays. This meaner eventually that the prices will grow there too. Demographic dimension Because Compass Procurement is an international business several demographic factors are of importance to mention. First of all there is the threat of aging of the population in Holland. All the “baby boomers” will reach around this period of time their retirement age.

This influences the economy on its turn and is a major problem in this time where the need of cutting down the expenses is really high. One effect to There is a threat of keenness in the staffing, where the most employees will be of elderly age. The recession has led to an even more increase in this, because new employees (mostly young people) are only able to get temporary contracts. Results of the CBS show that in 2011 only 2000 people got a fixed treaty in Holland.

The aging of the population seems to be going an inevitable problem for the labor market. The only possible solution seems to be a change in the policy of governments and organizations to counter expected labor shortages. For example by using and investing in human talent in all phases of people’s lives. So are there already several emperors employment agencies that focus on recruiting 50+ employers only, to withstand the aging of the population and because they are more experiences and thus have more knowledge.

Which brings us to another problem that is caused by the aging of the population. That is to say the turnover of organizations. A lot of valuable knowledge is lost in that way, making knowledge management more important than ever for organizations and universities. In the chemical industry there will be a major stream out of older employees and smaller inflow of new employees. The demographic factors of China play a role as well. China invests in technology and their economy is constantly coming closer to the Western world.

Jesse
from Nandarnold

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