Key Issues affecting House Hold Furnishing

This report discusses the key issues affecting the house hold furnishing sector and their impact. It covers the PESTEL analysis, positive and negative impacts, and provides a reflection on the preparation of the report.

Business

Table of Contents
INTRODUCTION ..........................................................................................................................1
Key Issues affecting House Hold Furnishing .............................................................................1
PESTEL Model ..........................................................................................................................2
Categorisation of issues in relation to PESTEL analysis............................................................3
Positive Impact of Issues............................................................................................................3
Negative impact of Issues...........................................................................................................4
REFLECTION ................................................................................................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES ...............................................................................................................................6

INTRODUCTION
Business is defined as an enterprise or an economic system in which products and
services are exchanges in terms of money. A form of investment is required in every business for
investment in order to earn a profit (Clinton and Whisnant, 2019). This report is based upon
house hold furnishing sector and the way in which this sector is overcoming from various
factors. It covers analysation of two different issues that can affect this sector and PESTLE
analysis is used to determine the impact of these two issues. Further, it covers positive and
negative impact of these issues upon business entity. At the end, a reflection is made regarding
experience of preparation of this report.
Key Issues affecting House Hold Furnishing
To run a business in an appropriate manner, there are various issues which an
organisation can face. The business have to overcome from these issues for running its business
activities smoothly and effectively. There are various challenges and set of issues that can make
it difficult for house hold furnishing sector in upcoming years (Werhane, 2019). Some obstacles
applied to manufacturing industry generally, manufacturing of furniture industry is highly
sensitive towards price fluctuations, competitive environment, customer demand, and so on. For
instance, changes in technology is also having large impact upon house hold furnishing sector as
due to increased innovation and technology, this sector also have to cope with it which is
negatively affecting its cost of production. It is important for an enterprise to cope with these
changes in order to bring improvement in its productivity and operations and to achieve better
results. The two main issues which can be faced by house hold furnishing sector in today's times
are-
Fluctuations in Customer's demand- The basic issue that is affecting household
furnishing is that changes in tastes and preferences of customers. Furniture industry's demand is
largely dependent upon trends of customer housing. Around 37% of households had rented their
own homes in the year 2016, which is marking high level renters since 1965 (The Top 4
Challenges Facing Furniture Manufacturers, 2019). As per the year 2015, the homes of single
person has been expected to increase over next upcoming 15 years. Moreover, individuals are
preferring small households like small houses and apartments. This fluctuation in demand of
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customers has large impact upon furniture manufacturing. Small homes and apartments asked for
rented space and less furniture and are mostly furniture with small and cheap furniture.
Renters do not prefer to make investment in high-end and large pieces of furniture.
Customers now prefer those furnitures which are easy to move and are inexpensive. Renters now
a days look for furniture which is more affordable and easy to carried on in the same way in
which landlords go for cost effective furnishing for their rental homes instead of purchasing them
(Dupraz, Nakamura and Steinsson, 2019). A ongoing trend which is also affecting house hold
furniture industry is that customers are shopping for those furniture which are small so that it can
fit in their rental houses, apartments or homes where space can be at premium.
Increasing costs- The next major issue which is faced by house hold furnishing industry
is that it is facing hikes in prices and costs because of factors prevailing in an industry and
outside it. Due to increased materials cost affects home furnishing industry into a tighter space ,
which will result in the organisation to either eat costs or pass it down the chain towards its
customers. Increase in cost can be a result from change in labour laws. Many of the states have
showed a increase in minimum wages in the year 2018. Workers are more leverage due to
shortage in labour which means that organisations is required to offer more appropriate and
generous wages to its labour in order to attract talented workforce (Walsh, 2019).
PESTEL Model
PESTEL analysis is determined as a tool or a framework which is utilised for analysing
and monitoring the external environment and its impact upon the functioning of an organisation.
These factors are political, environmental, economical, social, technological and legal forces that
has impact upon a business. The impact of external factors upon house hold furnishing sector is
elaborated as follows-
Political- The political condition of United Kingdom is stable which acts as a strength for
the house hold furnishing sector. Due to stable political condition, this sector do not have to
understand many rules and regulations.
Economical- United Kingdom is 5th largest economy of the whole world and its current
rate of inflation is 1.7%. This factor has positive impact upon the household furnishing
organisation (How Does The Economy Affect The Furniture Industry? 2019).
Social- This factor affect each industry to a large extent as the customers needs and
demands depend upon it. UK is influenced by social class culture and it has multicultural
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population. Due to this, organisations have developed a range of markets and products to cater
for different religions and races needs.
Technological- It is considered as one of the most important factor which is affecting UK
industry to a large extent. Due to increase in technology and innovation, house hold furnishing
sector is largely affected in both positive and negative way. Because of introduction of online
websites, the physical stores of household furnishing is not visited by people which is an
negative impact (Dwyer and Hopwood, 2019).
Environmental- This factor includes use of such things in manufacturing procedures that
do not harm environment. This factor has negative impact upon this industry due to increase in
awareness among customers regarding environment. Most of the furnitures today are made out of
wood which is harmfully impacting environment.
Legal- There are many laws and regulations which affect the household furnishing
industry such as Employment Act, 1996 serves to protect workers rights. Paternity leave,
minimum wages, sick pay and other such rights are protected. Similarly, the Equality Act, 2010
protects workers from discrimination.
Categorisation of issues in relation to PESTEL analysis
The two issues which are faced by household furnishing sector, fluctuations in customers
demand and increasing costs in relation to PESTEL analysis are elaborated as follows-
Social Factors- The fluctuations in customer's demand comes under the social factors.
Due to changes in demands and preferences of customers, it is required by household furnishing
sector to produce such furniture which meet customer's expectations, which are light weight and
attractive (Silva, 2019). In order to turn this issue into an opportunity, this sector can do
experiments on offerings and designs and can indulge in market research for collecting customer
data.
Economical and legal factors- Another issue which is faced by household furnishing
sector is increasing cost which is due to economic and legal factors because the cost of materials
are increasing to a large extent. Moreover, it can be result from certain labour laws as due to
labour shortage, companies have to pay them more.
Positive Impact of Issues
DFS Furniture is an UK based furniture retailer that deals with soft furnishings and sofas.
The issues which are faced by household furnishing sector are fluctuations in customer's demand
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and increasing cost (Harmon, 2019). Although these issues act as challenges to the household
furnishing sector but at the same there are certain positive impact of these issues upon DFS
Furniture. Fluctuations in customer's demand can have positive impact upon this enterprise as it
can produce furniture which are of light weight which can be easily made out of low production
cost. Moreover, this enterprise can experiment on latest innovative designs and products which
will attract more customers. The another issue which is increasing costs can allow an enterprise
to use ERP or other technologies of data capturing which will help this enterprise to use these
technologies and make sure that it lowers down its cost while producing product (Jaimovich,
Rebelo and Wong, 2019). These issues will help this enterprise to produce products which
requires low cost of production and to understand the way in which innovative technologies can
be used.
Negative impact of Issues
The issue of fluctuations in demand of customers and increasing costs has certain
negative impacts upon DFS Furniture (Runyan and Covin, 2019). For instance, due to change in
demand of customers, it is difficult for an organisation to develop products that will meet
customer's expectations. Now a days, people are preferring furniture which is cost effective and
are light weighted. Moreover, consumers are preferring to purchase small furniture which will
easily fit their rental apartments. People are not proffering big houses, they want small house and
only small furniture can fit in these houses. Also, there is a wide difference between preferences
of different generations as these generations have different lifestyles. Now, DFS furniture has to
change its processing and procedures in order to fit in customer's expectations which is a long
term task. Increasing cost is definitely negatively affecting DFS furniture as this enterprise have
to pay high remuneration to its labour which is increasing its cost of production and lowering
down the profitability (Myers, 2019).
REFLECTION
While preparing this report, I have got on opportunity to develop my certain skills and
key knowledge of various significant topics. This report helped to groom my knowledge about
certain topics such as how businesses are affected from external environment and the measures
through which it can overcome from their negative impacts. Although I have completed this
report in an appropriate manner by covering all its objectives but still there are certain challenges
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which I had faced during completion of this report but I overcame from these challenges. These
challenges are-
Lack of Time- The first challenge which was faced by me while completing this report
was lack of time. The time which was given to accomplish this report was less as there are
various objectives which are required to be covered in this project. It was very difficult for me
and my team members to conduct this research on time and also by covering all its objectives.
But I overcome from this challenge by indulging myself and my team members in overtime
which helped to achieve overall objectives of this project report.
Lack of coordination among team members- The next obstacle which I faced while
completing this project on time was lack of coordination between me and my team members.
Many times, it happened that we were not able to arrive at a same decision due to change in our
opinions and views. The main reason behind it was communication gap between us. Due to lack
of communication, we were not able to arrive at same point. We overcame from this challenge
by conducting various team building activities and by conducting various employee engagement
programmes which helped in giving all team members a platform to exchange their opinions and
views. With this, all the team members opinions were respected which helped in effective
coordination and communication.
Lessons learned
From this report, I have learned various lessons such as in order to achieve various
objectives of a report, it is important to use various skills such as analytical and research skills. I
also learned that to complete a report, smart work is equally important as hard work. Moreover,
it is important to form an effective coordination among team members and to develop proper
coordination among them to achieve the project goals. I have also developed my certain skills
such as team management, communication, research, analytical skills, and so on which helped to
complete this report appropriately.
CONCLUSION
From the above report it has been concluded that in order to run a business in an effective
manner, an enterprise must focus upon all its internal and external factors. There are certain
issues which can be faced by an organisation such as changes in customer's demands which has
both negative and positive impact upon an enterprise. It will change the complete procedures and
processes of its business activities and it is important for an enterprise to cope with these changes
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in order to run its business smoothly without any problem. An enterprise must indulge itself in
market research to understand customer's demands and desires and than produce products in
accordance.
REFERENCES
Books and Journals
Clinton, L. and Whisnant, R., 2019. Business Model Innovations for Sustainability. In Managing
Sustainable Business (pp. 463-503). Springer, Dordrecht.
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Dupraz, S., Nakamura, E. and Steinsson, J., 2019. A plucking model of business cycles (No.
w26351). National Bureau of Economic Research.
Dwyer, J. and Hopwood, N., 2019. The business communication handbook. Cengage AU.
Harmon, P., 2019. Business process change: a business process management guide for
managers and process professionals. Morgan Kaufmann.
Jaimovich, N., Rebelo, S. and Wong, A., 2019. Trading down and the business cycle. Journal of
Monetary Economics. 102. pp.96-121.
Myers, M. D., 2019. Qualitative research in business and management. Sage Publications
Limited.
Runyan, R. C. and Covin, J. G., 2019. Small Business Orientation: A Construct
Proposal. Entrepreneurship Theory and Practice. 43(3). pp.529-552.
Silva, E. B., 2019. The state and capital in Chile: Business elites, technocrats, and market
economics. Routledge.
Walsh, D., 2019. Heavy business: Commercial burglary and robbery. Routledge.
Werhane, P. H., 2019. The normative/descriptive distinction in methodologies of business ethics.
In Systems Thinking and Moral Imagination (pp. 21-25). Springer, Cham.
Online:
The Top 4 Challenges Facing Furniture Manufacturers. 2019. [Online] Available through
<https://www.ctnd.com/top-4-challenges-facing-furniture-manufacturers/>
How Does The Economy Affect The Furniture Industry? 2019. [Online] Available through
<https://freshome.com/2013/04/19/how-does-the-economy-affect-the-furniture-
industry/>
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