abhishreshthaa
Abhijeet S
Pest Analysis On Armstrong World Industries, Inc : Armstrong World Industries, Inc. (NYSE: AWI) is an international designer and manufacturer of floors, ceilings and cabinets. Based in Lancaster, Pennsylvania, Armstrong operates 40 plants in 10 countries and has approximately 12,300 employees worldwide. In 2006, Armstrong’s net sales were $3.42 billion, with operating income of $210.8 million.
Armstrong World Industries, Inc. emerged from Chapter 11 reorganization on October 2, 2006. Its stock began trading on the New York Stock Exchange October 18, 2006 under the ticker symbol AWI. The Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust, holds approximately 66% of AWI’s outstanding common shares. Armstrong's “Fourth Amended Plan of Reorganization, as Modified,” dated February 21, 2006, and confirmed by U.S. District Court Judge Eduardo Robreno in August 2006, become effective Oct. 2, 2006. The Plan includes a comprehensive settlement resolving AWI’s asbestos liability by establishing and funding a trust to compensate all current and future asbestos personal injury claimants. The company had filed for reorganization December 6, 2000, with the federal bankruptcy court in Delaware for reorganization under Chapter 11 because pending asbestos injury claims appeared to exceed the value of the company, and were growing.
“In addition to resolving AWI’s asbestos liability, we used the time in Chapter 11 to restructure our flooring business to make it more competitive,” Mr. Lockhart said. “We made substantial improvements in our cost structure by closing several plants and streamlining our workforce in the U.S. We have also expanded capacity to manufacture wood flooring, broadened our product lines and improved product quality and customer service.”
On January 11, 2007, Armstrong World Industries, Inc. and NPM Capital N.V. announced they were negotiating the sale of Tapijtfabriek H. Desseaux N.V. and its subsidiaries, the principal operating companies in Armstrong’s European Textile and Sports Flooring business segment, to NPM Capital N.V. The sale was finalized in April 2007.
On February 15, 2007, Armstrong World Industries, Inc. announced that it was initiating a review of its strategic alternatives.
PEST Analysis
The PEST Analysis is called by many names (STEP, PESTEL etc) yet it still uses the same principles of examination. Specifically, it looks at the political, economic, socio-cultural, and technological elements of the environment. This too essentially places importance on how these elements influence the organisation. (Blair and Hitchcock, 2001, 99) Usually, the use of this analytical tool is for planning and strategy creation of the company specifically to find a way to complement these plans with the findings of this analysis. More importantly, it allows the company the volition to exercise flexibility on the company and to serve as a safeguard in instances where major shifts in the trading environment take place. The primary source of this discussion is the case study provided by Collier (2004).
i. Political Factors
The UK political environment basically encourages trade in its territory. It is generally accepted that any trade is allowed in the said region provided that it does not oppose public policy, public order, or any existing law in the land. This is reinforced with the inclusion of UK in the European Union and the World Trade Organisation. However, in the case of Marks and Spencer, one of the more troublesome political elements that they have to contend to deals with the issue of labour laws and industrial relationship. In the past decades, the development efforts sought by the company have been constrained by several infringements in labour laws not only in their local operations but also in their international initiatives. This is especially true in their operations in France where the company is charged of grave abuse and breaking of expressed labour laws.
ii. Economic Factors
The United Kingdom is one of the hubs of commerce in Europe. Consumers are not limited to the locals as a considerable number of tourists flock the streets on a regular basis. This is similarly true in the context of the retail business, particularly in the area of fashion and apparel. The consumer base tends to require numerous types of clothing based on the existing climate of the region.
iii. Socio-Cultural Factors
In the context of social and cultural aspects of the environment, the common UK consumer tends to be loyal to a particular brand. Quality of the product is a must in every transaction but could easily be defeated by a fairly competitive pricing strategy from a competing brand. Recent observations also indicate that preference on trendy styles over the classics tend to manifest among the UK consumer. This is seen in the case of Marks and Spencer over the years as it struggled to gain a greater market share. This shows that the UK consumer places high value on their money.
iv. Technological Factors
In the area of technology, a good number of the population is able to access in the internet. This means that some of the trading organisations are able to make the most of their operations and widen their scope with the use of e-commerce. This is seen in leading retail companies like Tesco and Sainsbury. Thus, online marketing and purchases made through the net is becoming one of the competitive advantages held by the leading retail companies in UK.
Armstrong World Industries, Inc. emerged from Chapter 11 reorganization on October 2, 2006. Its stock began trading on the New York Stock Exchange October 18, 2006 under the ticker symbol AWI. The Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust, holds approximately 66% of AWI’s outstanding common shares. Armstrong's “Fourth Amended Plan of Reorganization, as Modified,” dated February 21, 2006, and confirmed by U.S. District Court Judge Eduardo Robreno in August 2006, become effective Oct. 2, 2006. The Plan includes a comprehensive settlement resolving AWI’s asbestos liability by establishing and funding a trust to compensate all current and future asbestos personal injury claimants. The company had filed for reorganization December 6, 2000, with the federal bankruptcy court in Delaware for reorganization under Chapter 11 because pending asbestos injury claims appeared to exceed the value of the company, and were growing.
“In addition to resolving AWI’s asbestos liability, we used the time in Chapter 11 to restructure our flooring business to make it more competitive,” Mr. Lockhart said. “We made substantial improvements in our cost structure by closing several plants and streamlining our workforce in the U.S. We have also expanded capacity to manufacture wood flooring, broadened our product lines and improved product quality and customer service.”
On January 11, 2007, Armstrong World Industries, Inc. and NPM Capital N.V. announced they were negotiating the sale of Tapijtfabriek H. Desseaux N.V. and its subsidiaries, the principal operating companies in Armstrong’s European Textile and Sports Flooring business segment, to NPM Capital N.V. The sale was finalized in April 2007.
On February 15, 2007, Armstrong World Industries, Inc. announced that it was initiating a review of its strategic alternatives.
PEST Analysis
The PEST Analysis is called by many names (STEP, PESTEL etc) yet it still uses the same principles of examination. Specifically, it looks at the political, economic, socio-cultural, and technological elements of the environment. This too essentially places importance on how these elements influence the organisation. (Blair and Hitchcock, 2001, 99) Usually, the use of this analytical tool is for planning and strategy creation of the company specifically to find a way to complement these plans with the findings of this analysis. More importantly, it allows the company the volition to exercise flexibility on the company and to serve as a safeguard in instances where major shifts in the trading environment take place. The primary source of this discussion is the case study provided by Collier (2004).
i. Political Factors
The UK political environment basically encourages trade in its territory. It is generally accepted that any trade is allowed in the said region provided that it does not oppose public policy, public order, or any existing law in the land. This is reinforced with the inclusion of UK in the European Union and the World Trade Organisation. However, in the case of Marks and Spencer, one of the more troublesome political elements that they have to contend to deals with the issue of labour laws and industrial relationship. In the past decades, the development efforts sought by the company have been constrained by several infringements in labour laws not only in their local operations but also in their international initiatives. This is especially true in their operations in France where the company is charged of grave abuse and breaking of expressed labour laws.
ii. Economic Factors
The United Kingdom is one of the hubs of commerce in Europe. Consumers are not limited to the locals as a considerable number of tourists flock the streets on a regular basis. This is similarly true in the context of the retail business, particularly in the area of fashion and apparel. The consumer base tends to require numerous types of clothing based on the existing climate of the region.
iii. Socio-Cultural Factors
In the context of social and cultural aspects of the environment, the common UK consumer tends to be loyal to a particular brand. Quality of the product is a must in every transaction but could easily be defeated by a fairly competitive pricing strategy from a competing brand. Recent observations also indicate that preference on trendy styles over the classics tend to manifest among the UK consumer. This is seen in the case of Marks and Spencer over the years as it struggled to gain a greater market share. This shows that the UK consumer places high value on their money.
iv. Technological Factors
In the area of technology, a good number of the population is able to access in the internet. This means that some of the trading organisations are able to make the most of their operations and widen their scope with the use of e-commerce. This is seen in leading retail companies like Tesco and Sainsbury. Thus, online marketing and purchases made through the net is becoming one of the competitive advantages held by the leading retail companies in UK.
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