This scanning actually to define the factor that involve together such as monitoring, evaluating and disseminating information from the external environment. The basic environmental scanning as per stated below:
High economic growth rate
Low inflation rate
High consumer spending
High personal tax
High level of education
Positive social values
Negative attitude towards ethics
Government policy on subsidies
Local government support.
Unfavorable fiscal and monetary policy
New technologically advanced products and services.
General widespread of internet.
High rate of innovation
High cost in R&D.
Reason Why Small Business Fail
Success in business is never automatic. It is not strictly based on luck, although a little never hurts. It depends primarily on the owner’s forethought and organization. Even then, of course, there are no guarantees. Starting a small business is always risky, and the chance of success is slim. A lot of small businesses come and unfortunately, go all the time. Over 50 per cent of small businesses fail in the first five years. A US-based writer, Michael D. Ames in his book called “Small Business Management” gave 10 reasons for small business failure.
The reasons are:-
Lack of experience
Insufficient capital (money)
Poor inventory management
Over-investment in fixed assets
Poor credit arrangements
Personal use of business funds
Gustav Berle adds two more reasons in The Do It Yourself Business Book:
From the literature review found that there is a lot of improvement that achieve towards effective strategic management in term of competitive advantage. There is cost leadership, differentiation and focus. So in order to improve this kindergarten performance in competitive advantage, some of the said element is already implemented by the kindergarten.
A firm sets out to become the low cost producer in its industry.
A cost leader must achieve parity or at least proximity in the bases of differentiation, even though it relies on cost leadership for its competitive advantage.
If move than one company aim for cost leadership, usually this is disastrous.
Often achieved by economies scale.
A firm seeks to be unique in its industry along some dimensions that are widely valued by buyers.
Areas of differentiation can be product, distribution, scale, marketing, service, image and etc.
A firm sets out to be best in a segment or group of segments.
In order to be more competitive advantage among the kindergarten in Tronoh area, the staff should be more motivation and have positive criterion. To support this statement, according to Ahmad Al Rfou and Ichalaf Trawneh, 2009 mention that the successful organization of the future organization, and achieve in reality the propositions that people are our most important assets and people are our source of competitive advantage. So company should motivated and satisfied employees who are willing to work effectively and efficiency to achieve their organization goals. The results indicated a significant relationship between job motivation and competitive advantage.
My conclusion is this small business about the kindergarten can be better and also can be improve if they implement a good strategic management towards it. This can be prove with Helene Hafstrand which cited that the important areas where sustainable competitive advantage can be generate are human resources management, market knowledge and product development.
It seems reasonable to believe that it is not resources or asset as such that generate competitive advantage, but the organizational capabilities and routines to handle them. Capabilities, knowledge and routines within human resources management, market research and product development are accumulates over a long time and embedded in the organization and therefore cannot be easily replicated.