Business and Business Environment

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
External analysis..........................................................................................................................2
SWOT analysis in context of company........................................................................................5
Impact of external and internal factors on decision making procedure.......................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business environment indicates collection sum of all companies, people, businesses and
other forces that are outside power of specific industry. It describe as combination of some
internal or external factors that may be influence business sales and operations management. It
permits for progress of organizations and also their downfall. The current study is based on River
Island which is located in London founded by Bernard Lewis in 1948. This report will explain
external factors identify by using PESTLE analysis that impact on business and it also justify
internal forces determine via SWOT analysis. Furthermore, this assignment will clarify
interrelationship between both forces and its influence on decision making process.
MAIN BODY
External analysis
PESTLE analysis is one of the best tools utilized in context of businesses, it is used to
analyze & measure external factors impact on operations and companies functions. It aids an
company determine external forces that could affects market and analyze how they could directly
influence sales.
Political factor-
These are all as regards how and to what extent a government intervenes in economy. It
includes trade restrictions, tax policy, trade restrictions, foreign trade policy and political
instability or stability. It is clear from all these elements that political factors have an affects on
firms and how they manage businesses. Here, it is used for River Island to identify factor which
impact on its success. Brexit and geopolitical instability increase pervasive sense of uncertainty
in worldwide economy (Garcia-Torres, Rey-Garcia and Albareda-Vivo, 2017). It put negative
impact on fashion industry and River Island as well it decrease its sales rather than before and
make restrictions for purchasing as well as selling products from outside of UK. It may be reduce
operational efficiencies and decrease production efficiency which in return affects brand image
within marketplace. Brexit is the main factor which affects a lot more than the other one.
Economic factor-

It has significant influenced on how a firm does business & also how beneficial they are.
It includes interest rates, inflation, economic growth, exchange rates and disposable income of
customers. These forces can be broken down into macro environmental components; it deals
with management of demand in any economy. In context of River Island, currency change is one
of the economic factors that put negative impact on sales of company (Ceccagno, 2017). It can
be said that rapid currency change influence organization where sterling pound is strong tourists
and visitors visiting United Kingdom will shop less because it will be more costly for them to
purchase apparel and other products. Currency exchange is the biggest issue faced by River
Island that directly affects sales and profitability rather than before. Firm had to take effective
action to retain their existing consumers with them.
Social factor-
It had an essential role in growth of fashion retail sector; these forces include age
distribution, career attitudes, population growth and lifestyle changes (Ratcliffe, 2017).
Consumer lifestyle change is one of the social factors that directly impact on productivity and
sales River Island negatively. People prefer to wear clothes according to their lifestyles sudden
changes put negative impact and high pressure on River Island Company to design their clothes
according to current market trend that is beneficial for business growth as well as success.
According to this modification management put extra efforts to meet the needs of their
consumers which is not easy to do but important in term of organization progress more than its
competitors operating within same sector since for so long. Lifestyle change also influences
buying behavior of buyers and they take decision accordingly.
Technology factor-
Advancement of technology impact management and marketing practices thereof in three
different ways such as new way of manufacturing products, distributing things and
communicating with target markets (Dissanayake, 2019). With digital technology River Island
can enhance their marketing procedure in better way, it increase their operational efficiency more
than before and permit them to reach at target consumers. For example, by using digital
marketing tools or channels company can promote their brand all around the world and spread
info about their products which is quite beneficial in term of maximizing consumer’s base and