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Analysis of the External Environment of Supermarket

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Added on  2020-12-29

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UK supermarket has been rapidly increasing and dominated by a  few firms, which are led by a few firms such as Tesco,  Sainsbury, and ASDA. The present study is on the Supermarket industry that will present some essential elements and factors of supermarkets or grocery stores. They also discuss some issues and factors that affect the business organization. 

Analysis of the External Environment of Supermarket

   Added on 2020-12-29

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Analysis of the External Environment of Supermarket_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. ENVIRONMENTAL ANALYSIS..............................................................................................1Analysis of the external environment of the chosen industry using appropriate strategy......1Identification of set of issues for this industry.......................................................................4Explain the reason of the issues..............................................................................................72. INDUSTRY ANALYSIS............................................................................................................73. OPPORTUNITIES AND THREATS DERIVING FROM ANALYSES...................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
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INTRODUCTIONUK super market has been rapidly increasing and dominated by a few firms, which are led byfew firms such as Tesco, Sainsbury and ASDA. Generally, Super market sector is theoligopolistic market and the pricing strategy of supermarkets. Present study is on Supermarket industry that will be presenting some essential elementsand factors of supermarket or grocery stores. Study will be presenting same models to evaluatethe actual growth of industry with the help of PESTLE and Porters five forces model.Further, it also presents opportunity and threats from the internal analysis method. Inorder to provides in depth knowledge of the study in the context of supermarket industry. Theyalso discuss some issues and factors that affect the business organization. Furthermore, it relatesto the business environment that affect the other competitors and company organizations. MAIN BODY 1. ENVIRONMENTAL ANALYSISAnalysis of the external environment of the chosen industry using appropriate strategyAs per the research, UK grocery market has total value £184.5 billion in June 2017. Thisrate has been increasing from 2016 by 0.3 percent. In supermarket industry sales achieved thetarget of sales about 3,000-25000 square feet broad range of grocery products and services. Interms of determining UK has 87,141 supermarket store (Global Information Network, 2017). Environmental analysis is a strategic tool. It is a process to identify external and internalelements that can affect the business organizational activities and performance level. Analysis ofthe market will represent ups and downs and opportunities for specific industry. There areproviding some factors and driver sources that affect the retail industry of UK by following somesections. Political The political activities run by the government affect to running businesses and industriesalso sales and purchase of the retail products in any specific market. The government andpoliticians’ effect from its exercises, power on the retailing sector. Besides, the governmentcontrols the supply chain of retailing products1. Supermarket industry has facing many ups and11
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downs by alteration of government regulations and modification in business policies. Politicalemerging factors are Monetary Policies, Consumer Protection Act, Employment Laws, InterestRates, Tax Policies, and Contract Enforcement Laws. These laws and changes policy affect theindustry directly. All over the factors given a large impact on the development of supermarketindustry. Economical In terms of economic factors, if country’s economic conditions are strong and stable thenthe flow of business will be going smooth and with ease. In the context of retail sector, companyhas to depend on the economic conditions of the country to stable their own position. Strictdecision making by the government on supply of retail products through economic structure of acountry will h face great effects on the supply of goods and services2. Supermarket industry getsaffected by some policies such as foreign exchange, economic recession, buying habits ofconsumers etc. lack of economic stability and growth will impact negatively on the super marketindustry. SocialSocial factors are highly influenced by changes in demands and needs. Society is highlydynamic and informational in terms of choices. Besides, due to changes in habits and fashiontrends, supermarket industry goes with some fluctuation. Social factor has directly affectedchanges in needs of society depends on the latest brands and high quality brand. There aredifferent norms and policies of income distribution, age distribution and rates of populationgrowth leaves direct effect on this business3. Due to high educational environment and socialaware people growth, leisure, career attitudes would get affect the thinking of society and makechanges in demands accordingly. These are the social factors and challenges faced by retailindustry growth. Social factors are given both positive and negative impact on the overallsupermarket industry in terms of changing customer needs and demands. Bernstein, S. and et.al., 20162. Beske and and Seuring, 20143 Hosken, D. and Tenn, S., 20162
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