Business Environment Solved Assignment (Doc)

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TOPIC : ‘Key Issues in the Household furnishings sub-sector in the UK'.....................................3
TASK 1............................................................................................................................................3
Key issues affecting home furnishing sub-sector........................................................................3
TASK 2............................................................................................................................................5
PESTLE model to categorize the issues faced by IKEA............................................................5
TASK 3............................................................................................................................................6
Positive and negative impact of issues faced by sub-sectors on an organisation........................6
TASK 4............................................................................................................................................7
Reflection....................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is the sum of all factors that affect the functions and operations of
a business and affects its abilities to be successful in the market and build long-term relationships
with its customers (Calabrese and et. al., 2018). These factors may be internal or external and the
changes in these factors need to be monitored by managers so as to form such policies and
strategies to maintain sustainability and existence of business. In this report the key issues related
to business environment faced by household furnishing which is a sub-sector of manufacturing
industry will be discussed along with their positive and negative impact on the organisations
related to this sub-sector.
TOPIC : ‘Key Issues in the Household furnishings sub-sector in the UK'
TASK 1
Key issues affecting home furnishing sub-sector
Furniture market in the UK is a sustainable industry as it contributes heavily towards
providing employment opportunities in the country along with contributing towards its GDP.
Government statistics states that contribution of furniture industry to UK 's GDP is £8.76 billion.
Also the expenditure of people on furniture and furnishings have dramatically increased as the
trend of decorating houses has increased (About the industry .2019). However, this industry
faces some issues due to changing external business environmental factors so. Some of the issues
faced by the home furnishing sectors in the UK market are discussed as follows : Increase in competition : As the trend of decorating houses with attractive furnitures and
interior designs have increased in the UK population and also their preference towards
customized designs have increased. This has led to increase in competition in the home
furnishings sub-sector to provide highly customised designs to customers at competitive
prices. Also the competition among retailers who can provide catalogues to customers so
that they can have a visual imagination related to how their homes would look after
purchasing a specific designs have increased. Competition from the retailers that are not
native to UK has also increased as they are able to provide affordable products to
customers than the local or native furniture manufacturers and retailers. The outside
competitors that pose threats to local retailers are IKEA, other department stores like
John Lewis, mixed retailers like Wilkinson and catalogue shops like Argos. Selling goods

to the first time home buyers becomes difficult as they want to purchase highly
decorative stuff so that their houses look better and attractive so the role of online
retailers in furniture have increased. Amazon, eBay etc. has increased the impact on the
furniture sector in UK as these sites offer discounts on their products (Furniture
shop:Sector trends .2019).
 Changing fashion and trends in furniture retailing : The furniture companies need to
stay up to date with the developments in the industry and also with the changing
customer preferences. This increases the research and development cost of these
companies. In UK the disposable income of people has increased and so they can afford
to purchase any new kind of technique or design that are available in the market so that
they can decorate their homes attractively. Hence the demands of customers keep on
changing and becoming advanced with growing developments and availability of variety
of options that are given by the competitors. The awareness of people in UK about new
kinds of designs due to developed and advanced technologies that are available with them
contributes heavily in changing their demands with time.
TASK 2
PESTLE model to categorize the issues faced by IKEA
Various issues that are faced by home furnishings in UK can be categorised using the
PESTLE model so as to help the managers in formulating strategies and policies that can help in
dealing with the external factors that affect the operations and smooth functioning of business in
market (Hendricks, 2017). PESTLE analysis can help the businesses to identify the external
factors so that the changes in these factors do not have negative impact on the business
functions ; Political : These are related to the governmental policies which influence the economy
or a certain industry. For example fiscal policies, trade tariffs etc. Economic : These are the economic factors of a country that affect the businesses such
as unemployment rate, inflation rate, interest rates etc. Social : These are related to society or the type of people that dwell in the country and
are affected by cultural trends, demographics, population etc.

 Technological : These factors are related to the rate of innovations in technology that
take place in a country and are related to automation, research and development and
technological awareness in a market (Zahari and Romli, 2019). Legal : These are the laws that prevail in a country that are to be followed by companies
so as to remain in the legal framework of the country.
 Environmental : These are the factors related to climate, geographic locations, tourism
etc. that are present in the country which influence the operations of the business.
The issues faced by home furnishings in UK can be categorised by using PESTLE analysis are as
follows : Increase in competition : The political factors of the country i.e. less restrictive trade
policies that are present in the country leads to free entry of so many retailers related to
same industry which increases competition in this sub-sector in UK. Companies such as
IKEA, John Lewis etc. possess threats to the local retailers of UK and increases
competition.
 Changing fashion and trends in furniture retailing : This issue is faced by home
furnishings in UK is because of technological awareness among the population of the
country and rapid technological advancements that take place in UK (Hillary, 2017).
Because of the changing and rapidly developing technology, new designs can be
generated using various graphics and customised services can be given to customers. The
local retailers have to bear a heavy cost of research and development so that new designs
can be provided to customers at low costs so as to be able to deal with the large
multinational companies.
TASK 3
Positive and negative impact of issues faced by sub-sectors on an organisation
To analyse the positive impact of issues faced by the home furnishings in UK on the
related organisations, Staverton is taken which is taken which deals in designing and
manufacturing office furniture to suit the client's specifications (McFadyen and Rankin, 2016).
Positive impact :
 The increase in competition has lead to improve the efficiency and performance of the
company by adopting such techniques and methods so that the cost of products can be

reduced along with providing customized designs to its clients. This helps the company to
sustain in the competitive market. The company offers a much wider range of furniture
solutions so that the furniture can span its workable mobility integrated with technology.
The increase in competition helps the company in attracting more customers towards
their products by increasing the marketing strategies which can help in promoting and
advertising its products to a large base of customers.
 The company is able to design furnitures that are suitable for all the kind of offices and
can stay preferable to the offices even when the fashion changes. In offices the
decorations are usually kept simple which gives the company competitive edge over
other retailers as they do not have to change their designs with changing technology. Also
while choosing the furniture for offices people look for comfort rather than decoration so
this helps in manufacturing such furniture using technology so that more comfortable
furnitures can be made. This also helps in eliminating competition from online websites
as comfort can be felt not seen through online websites.
Negative impact :
For analysing the negative impact of the issues that are faced by the home furnishings sub-sector
in UK, Capital Bedrooms and Kitchens Ltd. Is taken. It is a London based family run business
which provides all kinds of furnitures and fittings and with high quality so that the furniture can
fit any home area and are available at reasonable prices for the customers (Oey and Nitihardjo,
2016).
 The company is facing high competition in the furniture market that has a negative
impact on the profits of the company as in order to successfully deal with with the
competition they have to continuously cut their prices. The increased competition also
increases the cost of labour and raw material. Further the cost of research and
development so that competitive designs can be introduced in the market increases the
overall cost of the furniture. Also the online businesses such as Amazon, eBay have led
to rise in competition and reduction of its sales in the market (Vintilă and et. al., 2017).
 The changing fashion and trends in the furniture retail have increased investment in new
technology in the market. Also the companies that are more technologically advanced
than Capital Bedrooms and Kitchens Ltd. are going ahead of the company in the market

share. This has also led to decrease in sales as huge investment is needed for generating
new designs of wardrobes so as to attract more customers.
TASK 4
Reflection
The above report is based on an interesting topic which is 'Key Issues in the Household
furnishings sub-sector in the UK'. While preparing this report various issues that are faced by
the household furnishings which is a sub sector of the manufacturing industry were analysed. For
this the entire furniture industry was first segmented based on the basis of their dealings in
furniture and the sector that dealt in household furniture was selected so as to conduct the
research further. The PESTLE analysis helped me in determining the external factors that
generally affect the furniture sector. This analysis helped me in categorizing the issues that are
most commonly faced by the furniture industry in UK so that the external factors that are related
to these issues can be determined. After this research my skills and abilities to conduct a research
properly got enhanced. This can help me in getting future research projects and increase my
earning opportunities in future. However I faced following issues and challenges through the
research project along with how was I able to solve these issues are discussed as follows : Choosing a research topic : I faced difficulty in choosing an appropriate research topic
which could help me in enhancing my research skills and capabilities and can increase
my knowledge so that it can help in gaining future projects. Also I had to choose a topic
which could carry my interest from the start to the end so that accurate results can be
gained from my research. For this after going through all the available research topics I
consulted my mentors and teachers who helped me and guided me in selecting the most
appropriate topic for research. Lack of time : I found that time allotted to me to complete the research was less. This
affected some of the areas in research like I could not evaluate more organisations related
to home furnishings in UK. Also my sample size restricted to just London, UK. However,
I managed the time well by using my time management skills which helped me in
utilizing the available time in an efficient manner so that desired results could be
produced.

 Inability to find modern, specialised and related references : There was a shortage of
sources from where I could acquire the required information for conducting the research
properly. This hampered the process of information collection as there were limited
resources where the required information could be found.
 Choosing a research team : The choosing of an appropriate research team was another
challenge that I faced which could help me through the research process. Choosing the
members who were productive and sincere towards their work was important so that a
good and strong research could be carried. For this I selected my students who were good
at research and worked with enthusiasm through the research project.
CONCLUSION
From the above report it can be concluded that industries face various issues and
challenges while working in an environment. These issues can be due to various internal and
external factors and needs to be dealt with on time so that the sustainability and profitability of
the business can be maintained in the competitive market. Research and development can help in
analysing the challenges that exist in the market so that the change in organisational strategies
can policies can be done to exist in the changing business environment.

REFERENCES
Books and Journals
Calabrese, M and et. al., 2018. From mechanical to cognitive view: The changes of decision
making in business environment. In Social Dynamics in a Systems Perspective (pp. 223-
240). Springer, Cham.
Hendricks, C.C., 2017. Improving schools through action research: A reflective practice
approach. Pearson. One Lake Street, Upper Saddle River, New Jersey 07458.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
McFadyen, J. and Rankin, J., 2016. The role of gatekeepers in research: learning from reflexivity
and reflection. GSTF Journal of Nursing and Health Care .4(1). pp.82-88.
Oey, E. and Nitihardjo, E.C., 2016. Selecting Regional Postponement Centre Using PESTLE-
AHP-TOPSIS Methodology: A Case Study in a Pharmaceutical Company. Global
Business Review .17(5). pp.1250-1265.
Vintilă, D.F. and et. al., 2017, October. A POLITICAL, ECONOMIC, SOCIAL,
TECHNOLOGY, LEGAL AND ENVIRONMENTAL (PESTLE) APPROACH FOR
MARITIME SPATIAL PLANNING (MSP) IN THE ROMANIAN BLACK SEA. In
International Conference on Management and Industrial Engineering (No. 8, pp. 653-
666). Niculescu Publishing House.
Zahari, A.R. and Romli, F.I., 2019. Analysis of suborbital flight operation using PESTLE.
Journal of Atmospheric and Solar-Terrestrial Physics .192. p.104901.
Online
About the industry .2019. [Online]. Available
through:<https://britishfurnitureconfederation.org.uk/about-the-industry/>
Furniture shop:Sector trends .2019. [Online]. Available
through:<https://www.sectorsdonut.co.uk/sectors/retail-wholesale/furniture-shop/other-
payments>