Emerson Electric Company Analysis

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Emerson Electric Company is a worldwide globally spread and technologically diversified company that is engaged in the process of developing and marketing technologies and also supplying engineering services to both industrial and consumer markets all over the world.

It was established in the year 1890. Since the year of its inception, it has shown constant growth and now it has become the leading company in the United States and also a global company, which has listed its name in the 375^th position among FORTUNE’S list of world largest companies. The company has annual revenue of around $22 billion. It is operating through its five major departments, which include the process management department, Industrial automation department, network power department, Climate technologies department, and appliance, and tools department. (Awards & Recognition, 2008).

Both the internal and external environment contributes to the success of a business. The growth-oriented and effective internal and external environment help Emerson to meet the challenges and opportunities in the global market.

Describe Emerson’s external environment. What implications does that have for the company? Why?

Emerson does business in more than 150 countries and has 265 manufacturing locations globally. The external environment of the company includes the market competition, the market condition, and the taste and preference of the consumers. The trade policies and the restriction in the foreign trade policies and also the availability of the raw materials will also affect the external environment of the organization. Emerson’s management also anticipates the needs of the customers, which helps them to develop technologies that help them to provide services to them without compromising on reliability.

A team of consultants is appointed so that the emerging needs of the customers can be identified and develop a customer-oriented business strategy. (John Baker 2001, P. 57-70). Porter’s five force model emphasis on five factors that are used to analyze the environment of the industry. The competitive rivalry, power of suppliers, power of buyers, threats of substitutes, and threats of new entrants. In the case of Emerson, competitive rivalry is more since there is high competitive pressure on price, margins, and also on the profitability of the company.

The power of suppliers is also high for there are large numbers of suppliers of raw materials and there are no substitutes for a particular input. The buyers are very price sensitive and they are the ones who impose pressure on the volume and also on the margin of production, so Emerson is much more interested in customer satisfaction. The threat of substitutes and new entrants is high in the case of Emerson, but they have a competitive advantage over the other competitors since they are an established brand and they have brand loyalty. (Recklies 2007).

Describe Emerson’s internal environment. How does that contribute to and determine the company’s performance? Why?

The existing products of the company and its marketing strategies constitute the internal environment, which also has an impact on the performance of the Company. Emerson has a competitive advantage and market differentiation over its competitors since it makes frequent product investments and technology investments. This will also help Emerson to maintain its quality and also to satisfy the needs of the customer in a cost-effective and in an environmentally sound way.

They are up to date in their research, engineering, and manufacturing skills so as to win customer satisfaction. Emerson also gives importance to the information process and communication within the organization so that using such insights to pinpoint those places where costs can be cut and so that the profitability of the company can be increased. (Roberti 2001, P. 7).

Is top management support necessary for successful change? Why or why not? What do you think of Emerson’s approach to conveying such support?

Support of the top management is necessary for the effective and successful growth of an organization. Emerson’s disciplined and planned management enables the company to compete in its highly changing and competitive environment and also create value for customers and the shareholders. The top management of Emerson has followed many long-term strategic management processes that are necessary to strengthen the business platform, globalize their assets, and also to increase business efficiency. Emerson’s management gives more importance to the operational brilliance and improves capital efficiency thereby generating a huge cash flow. (Growth Initiatives: Growing our Business, 2008).

Bibliography

Awards & Recognition. (2008). Emerson. Web.

Growth Initiatives: Growing our Business. (2008). Emerson. Web.

JOHN BAKER, Michael. (2001). Marketing Myopia: marketing. P. 57-70. Web.

RECKLIES, Dagmar. (2007). Porters 5 Forces. Themanager. Web.

ROBERTI, Mark. (2001). Case Study: Emerson Electric Inc. and Innovation. CIO: INSIGHT. P. 7. Web.

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Emerson Electric Company Analysis

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