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Business Environment: Hemel Hempstead

   

Added on  2021-01-02

12 Pages3848 Words93 Views
BUSINESS ENVIRONMENT
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1Identify Porter's 5 Forces model and analyse the influence in the economy of UK...................1Use the value chain model to analyse the internal business environment of a firm in soft drinksub sector within the UK.............................................................................................................3Functionality of Porter's five model and its potential limitations...............................................4Bargaining Power of Suppliers...................................................................................................5Adaptability of organization in response to the external environmental forces..........................7CONCLUSION ...............................................................................................................................8REFERENCE.................................................................................................................................10
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INTRODUCTIONBusiness environment is the sum of total internal and external factors which influence thebusiness and its operation. It includes the factors like clients and suppliers, improvements intechnology, laws and government activity etc. Britvic is the company deals in the soft drinksheadquartered at Hemel Hempstead, England, UK. It starts producing juices from 1938 dealingin the products like Britvic 55, Robinson's, tango etc. They operate in UK and Ireland but itexports to 50 countries. These report explains porters five forces models and also analyse theireffect in the economy of UK and analyse the value chain model in internal business environment.TASKa. Identify Porter's 5 Forces model and analyse the influence in the economy of UK.Analysing of competition is the best way to recognise the threats in an organisation andwork out how to address them (Pedersen and Netter, 2015). Britvic is the soft drink companywhich is having many competitors for analyse the competition the organisation has used Porter'sFive Forces model which is being break down into Five different categories. Porter considers thatboth the competitive forces and structure of overall industry effects the strategic decisionmaking. Porters Five Forces are as follows:Bargaining Power of BuyersSoft Drink industry is one of the largest industry in beverage category, Britvic is one ofthe popular industry among this. Buyers generally demands a lot they always want to purchasethe product by paying minimum price as possible. It brings pressure on the company and effectsthe profitability in long run. Britvic can handle the bargaining power of buyers by building thelarge customer base as it helps in two ways by decreasing the bargaining power of buyers and thesecond it will give the opportunity to organisation to increase its sales and production a well.Britvic have to introduce new products often which can limit the bargaining power of thecompany. Bargaining power of buyer is moderate.Bargaining Power of SuppliersAll the organisation dealing in this sector have to buy the raw materials from varioussuppliers. Suppliers who are in dominant position can reduce the margins which the Britvic Plc isearning in the market (Svensson and Wagner, 2015). As the suppliers use their negotiating poweror the higher supplier bargaining power lowers the profitability of Britvic. The company handlesthis bargaining power of supply by building the efficient supply chains with multiple suppliers.
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They always have the substitute for the raw materials they used so if the prices of raw materialrise than the company can shift to another supplier. Britvic can learn the lesson from wal-martand Nike that these companies depends on third party and their business depends on them.Bargaining power of supplier is high.Threat of New Entrants Threat of new entrants is low in Britvic. At the same innovation in new products andservices retain the existing customers by giving the reason to buy their products at the same theyalso attract the new customers. Build the economies of scale so it can lower the fixed cost perunit. Company can increase its capacity and spending money on it R&D. Even the new entrantsare less likely to enter into dynamic industry as there are already have the established players likeBritvic which defines their standards. Threat of SubstitutesThere are many kinds of drink products in the market is there which are substitute to eachother like Pepsi and coco cola, to eliminate this factor Britvic needs to be more service orientedrather than just product oriented and to understand the core need of the customer and theirpreferences (Pereira-Moliner and et.al.,2015). The organisation also increases the switching costfor the customers. Rivalry among Existing PlayersAs the rivalry in this industry among the existing players is very high and it will decreasethe prices and also impacts on the overall profitability of this sector. Britvic operates in the verycompetitive food and beverages where they are having many rivalries. So the Britvic has built asustainable differentiation by building the scale and also done the collaboration with thecompetitors to increase the size of market. But there are so many brands which have failed toreach the success that is having the Britvic.b. Use the value chain model to analyse the internal business environment of a firm in soft drinksub sector within the UK.Value chain is a set of activity which the organisation performs while operating thespecific industry in order to deliver a valuable product or service for the market. This analysis is
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