Internal and External Factors Affecting Business: A Case Study of Book Retailing

This report analyzes the internal and external factors affecting book retailing business. It includes SWOT analysis, PESTLE analysis, and Porter's Five Forces model to understand the impact of these factors on the business. The report also discusses the necessary information for planning, decision-making, and control purposes.

Introduction to
Business

Table of Contents
INTRODUCTION ..........................................................................................................................3
Determine type of internal and external information is necessary for planning, decision-
making and control purpose........................................................................................................3
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business in the separate legal entity which engage in commercial, industrial and
professional task. There are two type of business profitable and non-profitable who are operating
in the market and serving the large customer base with their respective aim. Additionally, sole
proprietorship, limited liability company, partnership which are operating in the business
environment(McKenzie, 2021). For this respective report, Alexa demie is the sole trader who
have started its business of buying and selling books in London. This respective report will
analyse the certain internal and external information which is necessary for planning, decision-
making and control purposes.
Determine type of internal and external information is necessary for planning, decision-making
and control purpose.
Internal factors defines as anything which is under the control of the company and they is
no matter of tangible and intangible. These aspects directly influence the overall functionality of
the business. Decisions related to the these factors is taken by the leader and the manager of the
company as they are having the higher consideration in the market. In context to book retailing,
the SWOT framework is being used in order to understand the strengths, weaknesses,
opportunities and threats so that they can comply with the business environment in an
appropriate manner. Following factors of SWOT analysis are given below:
Strengths Weaknesses
 The book store is always known for
quality and quantity of its products and
services as they are being printed by the
best printing press in the UK which is
the major strength of book retailing
across the UK.
 Books are always print in large quantity
that at any no point will customer
experience a shortage of the books. As
the customer always value for the
hidden strength of book retailer in the
 Huge advertisement cost incurred in the
promotion of book and the firms such
as book retailer with narrow profit
margin faced down fall in the overall
profitability and low consumer
penetration arises in the market.
 Poor pricing strategy is the another
weakness which is being faced by the
book retailer. This is being arises when
the managers set the unrealistic prices
of its book and scare the customer thus

market.
 The another strength of book retailing
is age factor as it is the fact that when
the new start-up firm stay for 2 years
in the market then it be ahead for them
to sustain in the market and generate
more revenue(Park, Jeon and Shim,
2021).
leads to reduce the overall sale of the
company.
 Ineffective products distribution
strategy is the another weakness by this
the products may no be sufficiently
reach to its customers. This may be late
and customer may face the huge looses
in the market due to delay in
distribution or long chain.
Opportunities Threats
 Due to increasing population, the
increasing in the intellectual knowledge
through generations and there is the
increasing market for books in different
categories.
 The book store are access to loan from
the well structured financial systems
that gives the loans at very cheep rates
by which book retailer can focus on the
development of its products and meet
the demand of ever increasing market.
 Management can attract the large
customer base by focuses on effective
talent management department.
 Due to the increases economic crises in
United Kingdom implied as the big
threat for the book retailer to have the
effective financial system in the market.
 Stiff competition from the other firms
also a major threat to the sole retailer
which leads to have slow down in the
business operations in the market.
 Frequent change in the technology also
headed toward the printed media
useless in the market and also rendering
paper for less use in future.
From the above discussion, it can be said that with the effective analysis of SWOT
analysis and understanding the strength, weaknesses, opportunities and threat for book retailer, it
can be said that when the company is comply with the business environment then effectively
plan the various strategies for expanding its business in the market and take appropriate decisions
as per the business environment and keep evaluate and control the various operations within the

company which help them to be the leading book retailing company in the market and helps the
business to attains huge growth and profitability as well.
External factors are the factors outside the organisation which is beyond the control of the
company. It have the major influence in the overall functionality of the business in the market.
These aspects impacts the each business and industry in its appropriate manner and that arises
the significance that how the leader and the manager control the overall functionality of the
business. For this, PESTLE analysis is being conduct, it is the framework which analyse the
political, economical, social, technological, legal and environmental factor and also impact the
entire operations of the business. Following factors are given below:
 Political factor: these are the factors which is being influenced by the government which
also impact the economy or a certain industry. This includes tax polices, trade tariffs,
fiscal policy that a government may stay around the fiscal year and also affect the
business environment in the market. In context to Book retailer, UK is having stable
government which help them to establish their business in the market and ear huge
profitability and revenue. Favourable tax and tariff help the company to have more profits
with them.
 Economical factor: These are the factors which includes the economic performance
which directly impact the company and also having the resonating the affects in long run.
These aspects are inflation rate, foreign exchange rates, economic growth, FDI etc. In
context to Book retailing, people living in the UK are having good disposable income by
which they can make a better choice in the market and also influence the overall
profitability of the sole trader.
 Social factor: It includes the factors which are being influenced by the social aspects of
the business and includes culture, norms, expectations, health consciousness, age
distribution, health and safety and career attitude of the individual. As it is known that the
people in UK are very much interested in reading book which is keep increasing the sale
of goods in the market. Increasing population and getting huge opportunity foe book
retailing to expand its business in the new locations and can generate huge profits in the
market. These are the factors which is impacting the overall profitability of the book
sellers.

 Technological factor: As the new technology are increasing with the emerging changes
takes place in the market as in the field of artificial intelligence. It includes the innovation
and the advancement takes places in the market which is impacting the overall
profitability of the business in the UK. In relation to book retailing, technology in
printing machines are increasing day by day and also helping them to meet the needs and
wants of their potential customer and sustain in the market for long period of time. It is
the factor which is also impacting the overall functionality of the business with the use of
emerging printing machines.
 Legal factor: These are the factors which shows the change in the legislation and also
impacting the employment within the UK. This is also access to material, quotas,
taxation, imports and exports, resources(Dal Mas and et. al., 2021). In context to Book
retailing, there is fair trade policy and the equal employment opportunities for the
business and the employees so that the book retailer can start their business in the new
market and offer the variety of book as per the customer interest in the market.
 Environmental factor: It is known that the global warming in rapidly increasing day by
day and they need to switch to the sustainable resources from the ethical sources(both
local and national market) it also includes the effective chain intelligence. In relation to
book retailing, people are moving to E-Books in order to reduce the use of paper and in
such way this factors negatively impacting the business and its functionality in the
market. These are the factors which is being implied in the change in the market so that
they can rightly issues for the business.
With the help of PESTLE analysis, it can be said that there are various factors which is
impacting the overall functionality of business and also having better consideration in the
marketplace. When the book retailing is complying with the factors which are influencing the
overall functionality of business. It is the main approach which is impacting the overall
functionality of business. External factor is having the better consideration in the market.
Porter's Five Forces
It is the model which identifies and analyse the five competitive forces which are shaping
the industry and also leads to determine the strength and weakness of industry. There are five
forces which are continuously use to determine the structure and the corporate strategy. Porter's
model can be applied to any segment of the economy in order to analyse and understand the level

of competition in the market. This model is given by Harvard business School professor, Michael
E. Porter. In context to book retailer, following forces are illustrated below:
 Competition in the industry: large number of competitors along with the number of
products and services are sustaining in the market implied in less power given to the
company. It is shown that when the competitive rivalry is low then the company has the
power to charge higher prices and set in terms so that they can deal in better way
(Bochulia, 2021). In context to book retailer, there is huge competition in the market and
the company is having the less power.
 New entrants in the industry: As the power is being affected by the entry of new firms
in the market. When the company is entering in the market with less power and cost then
it will be effective competitors and in such cases the power of new entrants in high and
the company may face huge loses within the organisation. In context to Book retailer,
they may face huge competition with the introduction of new firms at the same time.
 Power of supplier: There are many supplier who are sustaining in the market and also
having the higher profitability as well. As the supplier easily driven up the cost of input
in the market which also dependent upon the uniqueness of the products in the market. In
context to Book retailing, the power of supplier is high as they are many supplier which
are offering variety of book in the market.
 Power of customers: These are the who is having the power to influence the overall
demand of the products in large market. It also affects that how many buyer is having the
aspects which is having the major control in the overall functionality of the
business(Benkert, 2021). A smaller and more powerful customer base means that every
customer is having the power to negotiate for the lower prices and having better
consideration in the market. In context to book retailing, customer is having the high
power as per their preferences and interest.
 Threat of substitutes: These are the goods which can be substituted by other goods and
tin context to book retailing the there is high threat of e-books as with the aim of
retaining with the sustainable impact in the market.

CONCLUSION
From the above report, it is being concluded that internal and external factors have the
great influence in the market and the overall functionality of the business. For understanding the
internal environment, SWOT analysis is being conducted which also helps in the better
consideration in the market and also access the certain opportunists by which the business can
comply planing, decision making and controlling the various measures of the business.
Furthermore, PESTLE analysis and Porter's five forces is being used in order to understand the
impact of external factor on book retailing business.

REFERENCES
Books and Journals
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multi-disciplinary and multi-stakeholder perspective. Journal of Business
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Digitalization (pp. 271-285). Springer, Cham.
McKenzie, D., 2021. Small business training to improve management practices in developing
countries: re-assessing the evidence for ‘training doesn’t work’. Oxford Review of
Economic Policy, 37(2), pp.276-301.
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