Factors Influencing Business Operations

This assignment requires students to analyze the external factors that affect business operations, including legal rules, environmental factors, and economic conditions. Students are expected to discuss Porter's Five Forces and PESTLE analysis as tools for understanding these factors. The assignment also touches on the importance of considering external factors when running a business in different countries.

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
a. Porter’s 5 Forces model to analyse and identify the actual environmental influences on the
New look within the UK economy.........................................................................................3
b. Value chain model analysing the internal enterprises environment of a New look limited in
UK. ........................................................................................................................................6
C. Appropriate adaptations that New Look undertake in response to the external enterprise
environmental forces..............................................................................................................9
d. Porter's five forces model ................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment is basically the External and internal factor that can affect the
entire functionality of organization. It includes customers, employees, management, demand and
supply in the term of business regulations. In this assignment New look has been chosen for
assessment. New look is a global fashion retailer which was founded in the year 1969.
Organisation has the chain of selling women-wear, menswear and clothing for teens. It will
discuss about the use of Porter's 5 forces model that analyse or identify the current environment
that inspire on the New look company in UK. This assignment will describe the use of value
chain model to examine the inside enterprise environment in organization. Furthermore, the
appropriate adoption selects for the organisation and response to the external enterprise
environmental forces. At last, it will discuss about the usage of porter's 5 forces to determine
limitation of enterprise surroundings.
TASK
a. Porter’s 5 Forces model to analyse and identify the actual environmental influences on the
New look within the UK economy.
Porter's five forces are a type model and process that can identify or analyse the
competition in the marketplace. This force can be reshape each and every industry to manage
their business operation and function. Porter forces are frequently used to determine the
corporate strategy which applied in the different segments of economy (Adegbite and et.al.,
2018). This can help for managing the enterprise activities and also increase the productivity and
profitability in marketplace. As per the above explained porter's five model of New look
company, it has been learned that Porter forces are often used to know the corporate strategy
which are made applicable in the different parts of the economy.

There are five different types of forces applicable in the organization to manage the business
operations and function in proper manner.
Supplier power - New look is the popular brand in UK whereas many consumers attract
towards their product and service. The suppliers always maintain their bargaining power and
they also sell out their product in the global world. Supplier power refer to the pressure of
supplier for exert on enterprise by increasing the price, quality and reducing the product
availability (Calabrese and et.al., 2018). In New look, the idea of bargaining power is affect the
competitive environment for buyer and also influence to increase the productivity and
profitability in marketplace. Furthermore, a strong supplier can make New Look, company more
competitive and minimize the profit of buyers. They also performed different operations and
functions as cost of switching to be an alternative supplier which is high. There are less
substitute resources available in market. It is easy for customer to distinguish between the
products. The supplier power is concentrated and compare to the buyers. In this way, the supplier
bargaining power is moderate. Supplier has certain level of power over the new look firm which
based on the cost, price and terms of supply. For Example- In global market, there are limited
supplier than buyer. They allow for supplier to increase the price of product. They have supplier
Illustration 1: Porter's five model
(Source: Porter's Five Forces, 2018)

power to increase the power of new look firm and putting the firm as position to negotiate cost
and terms.
Buyer power- The customers are able to choose the right product and services in
marketplace. The supplier increased the quality of product in high price (Khalilitehrani, Sasic
and Rasmuson, 2018). In this way, there are reduced the productivity and profitability of New
look firm. For Example- In UK, there are dominated grocery super market that always exert the
power over the supplier in the organization. There are different factors that identify the
bargaining power of buyer.
The consumer can have purchased the significant proportion of industry output. They
also choose the different range of supply organization. Consumer is also finding the inexpensive
product and switch to another supplier. Buyer Bargaining power is refers to the customer
pressure that exert on the enterprise to get them and provide the best quality of product and
services. In this way, new look organization is analysing the power of buyers. Buyer power is the
most important forces that reshape the competitive advantage of industry. The buyer power is
high, it can help for increasing the productivity and profitability in marketplace. It is required for
new look firm to always maintain their quality of services and products. Buyer have increased
bargaining power when there is high supply chain than the demand of product in marketplace.
Buyer allows for increasing the pressure in new look form to offer high quality of product at low
price.
Competitive rivalry- Competitive rivalry is the major part of the competitiveness of the
New-Look organisation. It is the main idea that helps for understanding the industry rivals to the
successful product and service in marketplace. In New Look, the intense rivalry can generate the
limited profit and the competition moves from one place to another. Competitive rivalry always
encourages the business to engage with the innovative and technology (Čepel and et.al., 2018).
In this way, New Look firm is increasing the productivity and profitability in marketplace. It is
also influence to maintain the level of advertising expenses, concentration ratio of firm,
sustainable competitive advantages so the level of competitive rivalry is high. Sometimes, New
competitors may be threats but there are remains threats available in the existing competition. In
case, it will reduce the competitor's rivalry because of factors such as no competitions and low
number of competition in marketplace.

Threat of Substitution- A substitute product offer same type of product and also provides
the best quality of services to their customers. Sometimes, the new look firm is faced problem
and risk in the business activities. New look firm provide the different type of product to the
same customer. They also full fill the need and requirement of consumers. The extent of threats
can be depended on the different factors. The substitution threats availability effects the
productivity and profitability of new-look firm because customer can choose the purchased of
substitute instead for the product of industry (Khalilitehrani, Sasic and Rasmuson, 2018). On the
other hand, the close substitute product makes New Look more competitive and also reduces the
profit rate in the organization. Many customer switching towards the low cost that's why, it is
needed for new look organization to provide the product and services in the best quality at
cheaper rate while the threat to substitute is low within industry. There are various type of
alternative option available in market that can meet the same requirement as the product and
service. It is required for differentiating the product quality and services, which can achieve the
goals and objectives.
Threat of new entry- The new threats can have entered in the marketplace so that they always
gain the market share. It is important for existing firm like New Look limited to maintain the
position in market. In this way, it can be determined that the new competitors impact on the
existing firm therefore, New look industry will attract towards the competitor of market and
achieve their goals and objectives (Khalilitehrani, Sasic and Rasmuson, 2018). In the market is
increased the profitability and there is higher demand than the supply chain. In this way, it is
more likely to maximize the new entrants. In this way, it will increase the competition and
decrease the profitability for new-look that already exist in marketplace.
b. Value chain model analysing the internal enterprises environment of a New look limited in
UK.
A value chain model is a high level process that developed by the Michael porter. It can
be used to describe the process where the enterprise received the raw materials, add more raw
materials and create finished product etc. New Look firm is used the value chain process to
analyse the business operations and functions in proper manner (Value chain model in Porter's
forces, 2018). It is necessary to create a product and determine the best ways to increase the
supply chain efficiency or performance. The objective of value chain for delivered the large

amount of values in proper manner. It is also possible for cost management and increases the
benefits for competitive advantages.
Figure 1: Value chain model in Porter's forces
(Source: Value chain model in Porter's forces, 2018)

Use of value chain analysis in business process-
Value chain analysis is the best strategy tool that helps to analyse the internal activities of
business process. The primary goal of value chain is to recognize the business activities and
manage the cost of product and service in proper manner. It is easy for customer to improve the
competition advantages.
The value chain model can be used in the New looks firm to increase the competition
level in the marketplace and also maintain the customer loyalty exceptional products etc. this is
important for business to evaluate the value (Hugos, 2018). This process will help for analysing
the advantage in the enterprise operations and functions.
The value chain process more useful for business process to understand the need and
requirement of enterprises. It also beneficial for improve the capabilities and abilities towards the
development. In this way, New Look firm is decided that outsources were beneficial for business
process and participate to maintain the growth or development of business.
A business process can begin for identifying the each and every part of production
process and eliminate the unwanted improvement those are not possible. This model is useful in
the primary mechanism of business process as followings:
Inbound logistics- In new look, Inbound logistics is beneficial for business process to
store distribute and receive of raw material which applicable in the process of production.
Operations- New look organization is performing different operations to maintain their
quality of products and services in proper manner. It is the main stage of production that converts
the raw material into the final product with the help of value chain model.
Marketing and sales- New look firm is used the different type of marketing strategies to
promote their product and service in marketplace. This is the best process that involves the
promotions, advertising and sales force organisation, managing and pricing, distribution channel
etc. These are important factor for promoting the product and service in marketplace. New look
firm is mainly targeting the potential consumer and groups.
Service- New look firm is mainly focus to maintain their services which needed to handle
the business task in effective manner. It refers to the business activities that needed for
managing the performance of product and afterwards, this firm will produce to include the
installation, repair, maintenance and sales services.

Outbound logistics- Out bound logistic is applicable in the new look firm that help for
distributing the final product to the customer in marketplace.
Value chain model is beneficial for business process to plan an effective strategy that
helps for identifying the need and requirement of business. It is needed for New Look firm to
support the primary and enterprise activities for growth and development. New Look should
determine the actual cost of each and every business activities. There are different type of
internal business performed tasks such as cost drivers, labour intensive work hours and wage
rates etc. New Look firm always planning an effective strategy for the Business process to
determine the opportunities and also reduced the cost of product and service (Ifinedo, Pyke and
Anwar, 2018).
On the other hand, there is also another advantage of value chain model to increase the
most valuable consumer and also target the potential customers. This model is also included in
marketing strategies, product and system management, meet the consumer expectations etc.
Another way, it will apply or evaluate the strategies to improve the values in the business
development. New Look firm always focus towards the customer services and fulfil their need
and requirement. This is important for increasing the productivity and profitability in
marketplace (Hugos, 2018). This firm is offering various advantages to the employee and added
more value in the business development process such as offering incentives, adding more
features etc. In this way, it will help to improve the quality of product and service or business
activity. Business mainly focuses for increasing the growth and development. In this way, it
easily differentiates the product according to the cost, quality and value added etc. In this way, it
can be analysed that the entire goals of business by using the value chain to create strength of
enterprise competitive advantages. In this way, it can be identified that value chain model helps
for maintaining and analysing the entire business process to increase the quality of product and
service in marketplace.
C. Appropriate adaptations that New Look undertake in response to the external enterprise
environmental forces.
To understand the external forces environmental PESTLE analysis has been done.

PESTLE Analysis
Political factors :
In every nation there are different financial regulation and every government see business
by their political rules and regulations. In many countries it is difficult for multinational
companies to enter whereas it is easy in some nations. Organisation requires dealing with the
different regulations that prevails in the country for running the business in the nation. There are
many political disturbances that have affected the fashion industry to a great extent. Political
shifts have affected the market in United Kingdom and this has affected the sales of New Look
Company. New look has made strategies to overcome with the same by limiting the supply chain
operation to United Kingdom along with the neighbour nations (Racz and et.al., 2018). On the
other hand, if the political conditions of the nation are safe and higher at peace then it is easy for
the organisation to operate their business. Government policies spoil the game if it is not friendly
with the brand and affects the entire business to a great extent. Due to this political factors
organisation has adopted measures like detail knowledge of all the political aspects before
entering in to the market.
Economic factors :
It is one of the most important factors which affect the clothing industry to a great extent.
Every nation has their economy and different purchasing power of people. It depends upon the
Gross domestic product of the countries (Pati and Das, 2018). New look company has adopted
the pricing strategy where they sale products at nominal prices. This helps the company in
Illustration 2: PESTLE Analysis
(Source: PESTLE Analysis, 2018)

increasing its sales and sustain in different nations and its competitive market. As in the nation
where there is low purchasing power of people there the people focuses less on fashionable
clothes due to their income level. Thus, if the company will sale the clothes at nominal and
affordable prices than it will help it in faster growth of the business. Decline in the economy of
the nation affects the business and customers sentiments as well. On the other hand, New look
adds to the nation by giving employment to people and helping them in living a better life.
Social factors :
Due to the change in the society higher demand for the fashion products has been
emerged for men, women’s and children as well. New generation prefers to have the latest
fashionable clothes and this affects the business in positive way. Along with this, every
organisation has some social responsibility and it should be complete in positive way. If the
company focuses less towards society and culture than there are higher chances of losing the
business (.Shafiq, Ayoub and Khurram, 2018). In context to New look, company has always
made entire research on social and cultural aspects before entering in to the nation. New look
always followed the culture of nation and sold the products accordingly and it leads to increase
the sales and profits of the company.
Technology factors :
It is a factor which allows operating the business at a faster rate and takes it to a higher
level. All the departments from marketing to manufacturing gets affected by technology and with
the help of the same carry the work in better way. New look has also adopted different
technology in order to carry the operation in effective manner and more easily (PESTLE
Analysis, 2018). Like New look has started the concept of tracking the inventory which helps the
management in knowing regarding the latest stock updates. Along with this, New look has
started selling clothes on online website which makes easy for people in buying the product. This
online website is such a technology by which customers can buy products at anytime from
anywhere. This has led to increase the sales and also enhanced the brand image of the
organisation.

Legal factors :
It is the factor as per which the business operates and make all the rules and regulation to
run the business. All the business operates as per legal rules of the nation as the organisation
cannot remain uninfluenced by it. New look has always concentrated on making ethical brand
image and complied all the legal rules for the same (Taylor, 2018). It is important to consider all
the legal rules for successfully running the business in every nation. So it is important to
understand the rules and its implication on the organisation. After that the rules are applicable on
the company and the same is followed by every employee and entire management system
Environmental factors :
In this the company needs to take care of the environment while operating its business. It
is the duty of every person and organisation to take care of environment for future generation.
Products should also be such that can be renewed and are helpful in being environment friendly.
In order to create this plan, New look has come up with clothes which are made up with less
energy and water in comparison to other organisation. Along with this, the business also has
focus on reducing all the kinds of waste which are harming the environment in any way. This
will result in being more energy efficient and more good recycling features are also adopted by
New look.
d. Porter's five forces model
I have made understand that power of supplier is low in fashion industry but cost for the
same to New look will be high. As the organisation do not have extra-large number of suppliers
in there market (Sungau, 2018). In addition to this, power of buyer will be very high as there are
various suppliers available in the market to sell the clothing products. This helps the organisation
in keeping its prices lower and quality products are served to remain in the market. Porter's five
helps in determining that company should make its products and it's pricing after considering the
bargaining and switching power of customers. I have also learned from the porter's five model
that there is high threat of substitution of the product. As in fashion industry people switch very
fast due to the recent trends and lower prices. So it can be said that New look should focus on
giving the best quality and recent trends at affordable prices to sustain in long run. I have also
determined that this model has allowed the New look to lower down its prices due to higher
competition and switching power of buyers is high. Whereas, on a broader aspect the company
can come up with the best quality and recent trend product than lowering its prices down.

There are certain limitations as well that has been determined about the model Porter's
five model. I also analysing the model that help for new look firm to increase the popularity in
global marketplace. I easily used this model in the business process to manage the operations and
function in appropriate manner. Furthermore, I have also determined that there are certain fewer
aspects of Porter's five forces in knowing the business environment. The model will not be able
to reflect upon what is the market value and positioning of company among competitors so this
could be identified to as one of the major demerit of Porter Five force model.
CONCLUSION
As per discussion, it concluded that buyer's power will be very high as there are several
suppliers available in the market to sell the clothing products. This has made new look in
keeping its prices lower and quality products are served to sustain in the market in long term. In
addition to this, value chain model is very useful for gaining more understanding and capabilities
to identify the areas for improvement. This has made various improvements in the organisation
and helped it in growing. Other than this, there are various external factors that affects the
business and are required to be considered for running the business in different nations.
Furthermore, all these factors helps in knowing the aspects that should be followed like legal
rules and environmental factors that are requited to be considered for operating the business.

REFERENCES
Books and journals:
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Racz, L. and et.al., 2018. Extensive comparison of biodiesel production alternatives with life
cycle, PESTLE and multi-criteria decision analyses. Clean Technologies and
Environmental Policy. pp.1-12.
Khalilitehrani, M., Sasic, S. and Rasmuson, A., 2018. Characterization of force networks in a
dense high-shear system. Particuology, 38. pp.215-221.
Čepel, M and et.al., 2018. Business environment quality index in the SME segment. Journal Of
Competitiveness.
Chuang, S.P. and Huang, S.J., 2018. The effect of environmental corporate social responsibility
on environmental performance and business competitiveness: The mediation of green
information technology capital. Journal of Business Ethics, 150(4), pp.991-1009.
Ifinedo, P., Pyke, J. and Anwar, A., 2018. Business undergraduates’ perceived use outcomes of
Moodle in a blended learning environment: The roles of usability factors and external
support. Telematics and Informatics, 35(1), pp.93-102.
Pati, P. and Das, A., 2018. Capability Development in Dynamic Business Environment: A
Framework for Practitioners. IIMS Journal of Management Science, 9(1), pp.14-19.
Shafiq, M., Ayoub, M. and Khurram, S., 2018. BUSINESS: A Changing World. Society and
Business Review, 13(1), pp.124-128.
Sungau, J., 2018. Business Process Re-engineering. In Modeling Methods for Business
Information Systems Analysis and Design (pp. 15-33). IGI Global.
Taylor, K.A., 2018. Exploring the Experiences of Women Leaders in Small Business: The
Choice of the Small Business Environment and the Impact on the Woman Leader (Doctoral
dissertation, Johnson University).

Online:
Value chain model in Porter's forces, 2018. [online] Available
through:<https://www.ibm.com/support/knowledgecenter/en/SSZLC2_7.0.0/
com.ibm.commerce.admin.business.doc/concepts/cbmvaluechain.htm>.
Porter's Five Forces, 2018. [online] Available
through:<https://www.cgma.org/content/dam/cgma/resources/tools/essential-tools/
publishingimages/porters-five-forces.jpg>.