Business Environment - Urban industry

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Identification of appropriate macro environmental influences...............................................1
2. Analysis of the micro-environmental factors using 5 forces..................................................2
3. Analysis of the internal business environment of a selected firm...........................................4
4. Explanation of appropriate adaptations of selection firm.......................................................6
5. Reflection on the usefulness of an academic model...............................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is the sum of all external and internal factors that influence
business of a company. The internal factors are employees, workers, structure, rules and policies,
customers, suppliers and these factors affect the company internally. The external factors are
social, legal, geographic, demographic and psycho graphic factors which affect the organisation
externally. Business environment help in identifying the business opportunities and help the
organisation to improve its technology, laws and government, market, social and economic
trends. This essay is based on the Urban industry and it is a appeal retailers sub sector. The
business of it was established in 2002 and still continued to be an independent retailer based
Eastbourne in the UK (Alqahtani and Saba, 2013). Urban industry carries over 3000 different
products lines and stock products from over 90 worldwide brands. In this essay, Porter's 5 Forces
model are explained to identify and analyse the current environmental influences on the apparel
retailers sub sector and value chain model or the analysis of internal and external business
environment of a firm also described.
MAIN BODY
1. Identification of appropriate macro environmental influences
Macro environment refers to those factors which externally affect the business of a firm.
In Urban industry, the management of the company can use PESTEL analysis for it. This
analysis is as following:
PESTEL ANALYSIS : This is an analytical tool which is used by industry for analysing the
external forces that can affect the business performance.
1. Political : This is one of the most powerful external factor that can affect the working and
profitability of a sector. It is very important for apparel sector of UK to analyse the
government policies, so that they can reduce their problems.
2. Economical : For working in efficient manner it is very important for every sector to
analyse the economical condition of the country. As this is a external force that can affect
the business performance. If a country has goof economical condition then the
performance of business goes high, other wise it will go down.
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3. Social : Apparel sector is a sector which is very much depends on the fashion. If some
clothing designs are not according to the society then, it is not possible that business meet
the success.
4. Technological : Technology is a factor that can lead a business to success. Apparel sector
is highly demanded sector, for meeting the quantity of demands, manufacturers can use
latest technologies in their production.
5. Environmental : Apparels are made of cotton, which is a natural product. Manufacturers
of this have to keep in mind while producing that, they make production in natural way
so that environment do not get affected.
6. Legal : Every country have different legal polices for different business sector, which
they have to follow for reducing the legal problems.
2. Analysis of the micro-environmental factors using 5 forces
It is a tool for analysing competition of a business and it is developed by Michael E
Porter in 1979. The theory of this model is based on the concept of five forces that determine the
competitive intensity and attractiveness of a market. It is broadly used model in business and
refers the importance of these five factors that drive a firm's competitive position within an
industry. This model is useful in understanding the strength of an company's current competitive
position and the strength of a position that an organisation may look to move into. These five
forces help Urban industry in identifying and analysing the current environmental influences
(Deasy and et. al., 2015). The manger of Urban apparel store do this analysis to understand how
the five competitive forces influence the profitably and develop a strategy for enhancing urban
store.
Threats of new entrants: In Urban Apparel stores, new entrants bring innovation. The
company generate new ways of doing things by lower pricing strategy to enter into new market
and providing new value propositions to the customers. Government policy, capital
requirements, Brand equity, customer loyalty are some factors that affect new entrants. By
innovating new products and by building capacities or spending money on research and
development, Urban apparel reduce the competition of new entrants so there are low threat of
new entrants.
Bargaining power of suppliers; It is describe as the market inputs. Suppliers supply raw
materials, components, labour and services to the the firm. In Urban Apparel retailers stores,the
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