IB Business Management HL 6.1.3 STEEPLE analysis Question Bank

As demand for kerosene stoves had been declining for many years, in 1993, Adriana decided to add healthcare devices using ergonomic designs to RDM’s product portfolio. The reasoning behind the move to manufacturing medical devices was that, with the baby boomer generation soon to reach retirement age, the demand for goods and services in the healthcare industry would be growing. Though not immune to broader economic trends in Europe, since the Velvet Revolution the Czech economy has fared well. Part of this success stems from the relatively smooth transition to a stable market economy and democracy. Traditionally, educated Czechs speak German in addition to Czech, a situation that has facilitated positive trade relations with Germany, Europe’s largest economy. A small, compact country, the Czech Republic now has an IT infrastructure that ranks among the best in the world. For decades, RDM employed a large unionized labour force, mass produced stoves and sold its product to wholesalers. Because of globalization and fierce competition from Asian manufacturers, which had lower cost structures, in the early 2000s Jan determined that European manufacturers would have to lower costs. Automation, while requiring significant capital expenditures, lowers costs in the long run. In addition, digitized communication between robots allowed RDM to be responsive to customers’ requirements. RDM’s relationship with stakeholders was profoundly changed by the move to automation. In the 1970s, RDM employed roughly 500 workers, making it the largest single employer in Lobjanec. In 2019, the business employs 117 people, only a small number of whom are involved in manufacturing. Further, most of those involved in manufacturing are not skilled manual labourers but highly trained engineers and computer experts who manage the automated process. Their attitudes, aspirations and motivations differ significantly from the workers who survived the Second World War and had worked under the Communist regime. With this reduction in, and transformation of, RDM’s labour force, the company no longer has the level of local influence that it formerly had.

Describe two changes in the external environment that have affected RDM.