Industry Analysis and Possible Adaptations for Apparel Retailers in the UK Economy

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Industry analysis and possible adaptations
The aim of the paper is to reflect upon the industry analysis and possible adaptation of the
Apparel Retailers subsector within the UK economy. This paper includes the identification and
analyses of the macro and microenvironment influences that can affect the operations of the
business organizations today. Further, the reflection upon the forces in the macro environment
that can contribute in shaping the performance of the business is conducted which shows the
limitation that might be faced by the company. The paper identifies and evaluates the strategic
tools in conducting the analysis of the internal business environment. The internal analysis has
been done on the Mark and Spencer which is an apparel retailer UK with the support of the
Value chain analysis.
In the dynamic worlsd, the companies are performing their business operations in a
common environment where they can face the influence from both the external factors. The
external factors are determined with the help of the macro environment agents that play a pivotal
role in identifying the decisions that are taken by the organization. The macro environment
factors help the management to have the complete understanding of the external or bigger
environment prevalent in the regions (Armstrong et al., 2014)
The market of UK apparel retailer is growing with the rise in the demand of the UK
clothing marketing by 16.6% in the next five years to £51.2bn. The growth in the market is
stronger by 3.9 ppts in the year 2012-2017. The market of UK is driven by the inflation staying
more than 2.0% mark until 2020 owing to the weak pound that drives up the manufacturing and
import costs (Cission, 2017). The rise in the clothing market in the environment affects the
working of the company in the UK. Moreover, this has been found that the clothing is forecast to

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outperform total retail growth in between the year 2017 and 2022 as this is the third fastest
growing sector. The macro environmental factors help in understanding the effect on the
working. The major external factors are political, economic, social/cultural, technological, legal
and environmental factors that can create an impact on Apparel retailer in the UK.
The political factors majorly include the government set rules and regulation for the
companies that are essential to abide by the Apparel Retailers subsector in the UK market. The
regulations like Health & Safety British Standards are required to be followed by the companies
(Baker, 2014). It is essential for the company to implement all the regulations and rules that are
applied to the industry. The economic factors that affect the working of company include the
GDP, inflation rate and the purchasing power of customers. UK registered GDP worth of
2622.43 billion US dollars in the year 2017 which has reflected the decline from the previous
year (Trading Economics, 2018). This creates an impact on the working of the Apparel Retailers
subsector in the UK market because the customers won’t be able to purchase the products
because of the low purchasing power.
Further, the other factors like technology and social factors can also affect the working
because in the competitive apparel industry the technology and social factors are changing
according to the innovation and needs of the customers. Moreover, the environmental factors
include the protection and safeguarding of the environment where the company is performing
business operations (Chernev, 2018). The companies dealing their business in the competitive
environment ensure that they abide by all the legal issues which can affect the working for which
they need to follow the Fair Packaging and Labelling Act (1996) which helps them in meeting
their obligations. Thus, I believe that entire external environmental factors can contribute in
shaping the decisions of the company (David, 2011). This has been found that the decisions of

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the company depend on external forces which make the company form the decisions in the
manner so that they can resolve the factors that affect their operations.
In the world, the companies also deal with the microenvironmental factors which might
influence the working of the company. The analysis of the microenvironment factor can be done
with the help of Porter's five forces of the competitive position analysis. The analysis of the
microenvironmental factors is done for the apparel retailer’s subsector in the UK market.
Porter’s five forces
The theory of Porter's five forces is a tool that helps in analyzing the competition of
business. The analysis of Porter's five forces helps in understanding the forces that shape the
competition within the industry (Dawson, 2014) The below given Porter's five forces analysis of
the apparel retailer’s subsector in the UK market: -
Bargaining power of the suppliers: - This dimension shows the way through which the
suppliers drive up the prices of the industry. In UK apparel retailer subsector this has been found
that there is the presence of low bargaining power which is clear with the presence of the high
number of suppliers. The suppliers are increasing the market due to which the large retailers are
getting the opportunity to meet the needs of customers at low prices (Bush, 2016). The suppliers
get to agree to offer their products at low prices because they want to form loyalty and increase
their sales. In case the suppliers will not offer effective prices then the retailers will shift towards
the other suppliers present in the market.
Bargaining power of buyers: - The buyer's force is one of the important forces who can
choose to push down the prices. The bargaining power of buyers in the market is high and this is
the reason due to which they dictate their rules and tastes in the apparel retailer (Grant, 2016).