Business Environment Assignment (Docs)
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Added on 2020-11-23
Business Environment Assignment (Docs)
Added on 2020-11-23
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BUSINESSENVIRONMENT1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1a. Identifying and analysing the current environmental influences on Apparel Retailerssubsector within UK economy using Porter's 5 forces model................................................1b. Analysing internal business environment of Topshop within UK using Value Chain model................................................................................................................................................2c. Appropriate adaptation which Topshop could undertake in response to the external businessenvironmental forces..............................................................................................................6d. Reflection on the usefulness of Porter's five forces model in understanding businessenvironment and describing its potential limitations..............................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................112
INTRODUCTIONBusiness environment consists of different aspects of useful resources that are requiredfor the organisational operations and functions. With this consideration, internal and externalelements helpsfirm to track resources and convert them into goods and services. These elementshighly influence to take business decisions (Huq, Chowdhury and Klassen, 2016). There aredifferent forces that influence functions and operations such as economic, social, political,technological, etc. Present study is based on Topshop which is British Multinational apparel firmthat deals in fashion of clothing, shoes, make-up, accessories, etc. For gaining insight information of the present report, it covers Porter's 5 forces model toidentify and analyse current environmental influences on the Apparel Retailers subsector in UKeconomy. Furthermore, external business environment forces are explained along with analysingthe internal business environment through Value Chain model. At last, reflection on usefulnessof Porter’s 5 forces model will be given. MAIN BODYa. Identifying and analysing the current environmental influences on Apparel Retailers subsectorwithin UK economy using Porter's 5 forces modelPorter's 5 forces analysis is an approach which determines competitiveness in the givenmarket. It shows profitability for the business, competing with several other organisations inglobal environment. Elements of Porter’s five forces model included in it that influence Topshopin the UK economy are given as below:Buyer’s bargaining power (High): It is one of the important forces because buyers canchoose to push down prices not buy products or switch retailers. In Topshop, buyersbargaining power is high because there are several alternative options in front of them.Clothes shoppers are typically individual as compared to huge companies, buying in bulk,etc. Due to alternative options, shop for apparel and little incentive also consider forgiving plenty of indirect bargaining power (Wiese, Zielke and Toporowski, 2015).Supplier’s bargaining power (Moderate): In the apparel retailer, supplier’s power isrelatively small and moderate force. This is because, in all over the world, there areseveral suppliers exists those provide raw material to Topshop. Most of the apparelcompanies source their products from third world manufacturers who receive fraction of1
the profits. Suppliers have little control over the fashion industry which can bedispensable and always swapped out. Therefore, input price for the industry relativelylow and stay until global development close up significantly. Competitive rivalry (High): In fashion industry, it is interesting when it comes to analysewith intensity of competitive rivalry. There are a large number of retailers who soldsimilar products but concept of brand also allow in some companies to quickly saturatewith similar products. In fashion industry, it is difficult for Topshop to consider theirfunctions in effective manner because there are several larger businesses continuouslycompete with each other. In this aspect, fashion industry is very difficult to get into formany retailers (Venkatesh, Rathi and Patwa, 2015). For example, Zara, H&M, etc. otherorganisations competing with the selected firm so that competitive rivalry in the countryis high.Threat of substitute (Low): In the UK, Topshop has low threat of substitute productsbecause in the fashion retail industry maximum people look for quality products. To sumup, it can be stated that fashion industry seems difficult to successfully dive into bleak forcompanies. The chosen company provide quality of products and services so that itassists to effectively bargain with plenty of choice. There are several competitors make tosustain place in the market. Therefore, it can be stated that it create positive impact on theUK economy to develop their significant advantages (Kozlowski, Searcy and Bardecki,2015). 2
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