The major problem facing Alpha Inc is operations in a low margin market as compared to other established software markets. The company is stable and can rebrand itself into a better software producing firm as long as competition and external resource mobilization is well managed. The company also faces market risks where continuity of the industry is not guaranteed. The causative factor is a continued advancement in technology and many competitors who offer new products that complement or substitute those of Alpha Inc.
Managers always carry out an environment scan before launching their main business ideologies and strategies to have an overview of the internal and external business environment. Such includes analyzing the opportunities available such as the customer base, the competitive nature of the environment, economic status, and demographic data analysis. The analyses involve the external overview of the opportunities and threats available for the business in the environment of interest. The business environment being scanned comprises of three categories. These are the market environment, micro-environment, and the macro-environment (Maxwell, 60).
Demographic Environment and Market Share
Alpha Inc has a significant share of the market serving 15-80 lawyer firms (Warren, 5). The number of lawyer firms available in the market is over 2000 (Warren, 8). This means that Alpha Inc has an opportunity of increasing its market share through the appropriate approach. The company currently serves 163 firms that are about 8% of the market share. It means that it is a challenge for Gall to implement strategies for this.
Technology and Innovation
The current market share for Alpha Inc needs an improvement in terms of new products, experience and services being offered to the customers. The customers need something new in the market to conquer what the competitors are offering. Gall sees the need to capitalize on the Web service Alpha had started to focus on. Similarly, innovation will also be achieved through the company collaborating with other closely related companies offering complements so as to bring a new experience to the customers.
There are possibilities of new investors coming to Alpha Inc, which give it a better chance to expand its operations. According to Gall, the current economic status of the macroeconomic environment will allow the enterprise to invite private investors who will contribute about US$3 million to US$5 million to raise its working capital. There are also opportunities of takeovers (Warren, 5). A successful venture also requires an evaluation of the macro-environment. Gall came up with a strategy of collaborating with other companies offering complimentary products and services. This strategy was an assessment of the possible interaction with external resources and rivals who could be turned into an advantage (Warren, 3).
The competition was among the threats that Gall would have to tackle once he got into Alpha Inc. The primary competitors for Alpha Inc were Elite Information Systems Inc, Juris Inc and Software Technology Inc. (Warren, 4). Outdoing competitors in a market has never been an easy task for any investors. The current market share for Alpha Inc at the time was about 8%, which was far way below Elite’s share (Warren, 8). The best approach for the competition was to introduce alliances with the competitors and other allies who provided complementing products and services that Gall already had in his plan. Similarly, the way to conquer the opponents would end with Alpha’s acquisition of the rivals.
Possible External Threats
Another element of environment scan involves the evaluation of threats such as risks that may face a potential venture. At Alpha Inc, Gall identified various risks that would possibly meet the company in the nearest future. Such included the market risk where the technology industry performance had been declining. Similarly, demand for Alpha’s products and services were not assured in the future as well as its future financing (Warren, 9). Also, the reception by the customers after making changes to the company was uncertain.
Maxwell, Sandada. "Mission And Vision, Environmental Scanning And Formality Of Strategic Planning As Predictors Of The Performance Of Small And Medium Enterprises (Smes) In The Gauteng Province Of South Africa." Ecoforum 3.2 (2014): n. pag. Web. 18 July 2015. Retrieved from: <http://ecoforumjournal.ro/index.php/eco/article/download/70/67>.
Warren, Roll. "Alpha Legal Systems Inc." IVEY: Richard Ivey School of Business (2002): 1-12. Print.