The success of a business requires a clear understanding of the business environment within which the business operates. Business environment includes all the various factors which have a bearing on the running of the business. This includes internal factors which are those that the business has control over and can modify. These factors also have a direct impact on the business. These factors include factors such as personnel, organizational structure and physical facilities in the business (Indris, 2015). External factors refer to those that the business does not have control over but have an indirect implications on the business. These are factors such as suppliers, customers, competitors, the economic environment, the political environment, legal environment among others (Indris, 2015).
From the assessment of Red Carpet, a number of internal as well as external factors affect the running and outcomes in the business. The internal factors influencing Red Carpets operations are discussed below. One of the most important internal forces include the human resource or personnel. For a business to be successful, its human resource need to be well trained, committed and highly motivated. On the contrary, the 16000 employees at Red Carpet are not properly trained as evidenced by their struggle in adhering to employee laws as well as lack of a training department in the institution to conduct customized training for the employees. In one of the divisions in Cruise Ships, the company relies on seasonal, poorly trained employees.
The management structure and nature is also another internal force that affects the running of Red Carpet business. The management in the business is informal and inorganic which leads to employees operating under no code of conduct. The management also does not hold the managers who run the restaurants, cruise ships or hotels accountable for their actions and decisions resorting to blame games. The lack of flexibility and negotiation also affects the running of Red Carpet. Another internal factor is the companys image to the outside world. Red Carpet has had problems with business partners and suppliers because of its reputation. Marketing is another internal force that has affected Red Carpet as shown by the struggle of Food Park a restaurant division due to poor marketing.
A number of external factors affect the running of Red Carpet business. Suppliers are part of important external factors that have affected Red Carpet. Businesses need to have reliable suppliers in order to be successful. A division of red carpet known as Burger Blast has been struggling with suppliers leading to poor customer relations and experiences. Another external environment that has affected Red Carpet is the market or customers. High competition in the restaurant market has led to the struggle of Red Carpet divisions such as Food Park. Another external factor is the Legal factor like the Federal investigation launched against the Cruise ship division after it almost collapsed and had to be salvaged at a cost of 1.5 billion dollars.
These internal and external factors have affected the running of Red Carpet. The managerial structure as well as its lack of dedication towards human resource training and motivation has led to poor employee training and relations with high turnovers of employees and managers which leads to poor employee and customer experience. The company image has made the company experience bad relations with suppliers and partners. Poor marketing has led to struggling of some of the divisions an example being Food Park. The external factors such as unreliable suppliers and high competition in the market has led to the struggle of some of the restaurant divisions. A federal investigation launched against the cruise ship division affects the perception of the customers towards the company.
Idris, S. (2015). Internal and External Environment Analysis on the Performance of Small and Medium Industries in Indonesia. International Journal of Scientific & Technology Research Volume 4, Issue 04.
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