Business Organisations and Environments

This report analyzes the business environment of Waitrose, a British supermarket chain, and explores its potential expansion into Germany. It utilizes frameworks like PESTLE analysis and Porter's Five Forces to assess the political, economic, social, technological, legal, and environmental factors influencing Waitrose's operations in Germany. The report also examines the competitive landscape and the demand-supply dynamics within the German retail sector.

Business Organisations and
Environments in a Global
Context

Table of Contents
INTRODUCTION ..........................................................................................................................1
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment is refer as the combination of external and internal factors of
company that highly influence on its operating situation in a direct manner (Barack, 2016).
Global business environment can be determined as the environment in various sovereign
countries. Global, business and environment are different three words that explains a reality of
the nature of global trade. It is developing in a fundamental and important way as an output of
many forces shaping the dynamics of international commerce.
Overview of the Waitrose:
Waitrose is the chosen organisation which is a chain of British supermarkets. It was
founded in 1904 by Wallace Waite, Arthur Rose, David Taylor in Bracknell, Berkshire, United
Kingdom. Company mainly specialise is selling of bakery products, milk, fruits and vegetables,
meat, beers, soft drinks and water, wine and spirits, household products, health and beauty
products, tea and coffee, baby and child products, and pet care products. Waitrose also sells
home and garden products like cooking products and kitchenware, household cleaning products,
dining products and tableware, candles, newsagents, laundry products and stamps and many
other products.
Main competitors of the Waitrose are ASDA, M&S and TESCO. Revenue of the business
is £5,400.4 million, operating income is £173.5 million and net income is £123.3 million. This
figure and facts show as Waitrose is one of popular and famous super market chain in the United
Kingdom and cover all area with purpose of maximising their sales and revenues. In the
organisation, approximately 52,590 employees are working with purpose of increasing
profitability and sales of company. Waitrose has 352 locations in all over the world which show
company is a well-established and famous brand. As of 2018, Company has approximately
476.8K fans on Facebook and about 297.3K followers on Twitter. Company wants to expand
their business operations and functions in “GERMANY”. It is a best decision for the
organisation because in which they introduce their products and services at international market.
In order to develop their business operations and activities in Germany, company requires to use
different frameworks such as PESTLE analysis, Porter’s 5 Forces and demand-supply scheme.
All these are essential and useful ways for the Waitrose to easily enlarge their operations
in selected country and retain long run sustainability in this (Kassebaum, 2016). With the help of
PESTLE analysis of Germany, Waitrose can easily identify political, social, technological,
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environmental, economic and legal situation. Thus, it will support an organisation to maintain
strong position in chosen country and maximise their sales also. Porter's five force model is also
essential and useful framework for the company because it help in identifying of competitive
environment and also support the business manager to understand different components that
shape competition in a given sector (Girton and Trescothick, 2017). Therefore, this model also
important and assist an enterprise to analysis competitive rivalry, bargaining power of suppliers,
threat of new entrants, bargaining power of customers and threat of substitute products or
services. Thus, both framework are plays vital and critical role in organisation to enlarge their
operations and achieve better outcomes within predetermined time period.
PESTLE Analysis: It is identify as an analytical tool or technique for strategic business
planning. It is a one of the best and effective framework which is applied by each and every
organisation to analysis different situation of country such as political, social, environmental,
technological, legal and economical. All this are main aspects of PESTEL analysis and support
the Waitrose in order to expand their business operations and activities in Germany. Therefore,
PESTLE analysis of Germany and its impact on Waitrose operations are determined as under:
Political: Political factors cover government policies linking to the industry such as tax
policies, trade restrictions and tariffs, laws and regulations and so on. Germany is the democratic
republic (Kelk, 2016). Political system of Germany operates under an effective framework which
was established in 1949 constitutional document called as Grundgesetz. Beside this, party system
has been controlled by the social democratic party and Christian democratic Union of Germany
with entire chancellors hitherto state member of either party. In Germany, there are some rules
and regulations governed by legal authority which is beneficial for the Waitrose because all
legislation are framed according to companies soi to increase employment in the country. Thus,
it will make positive impact on the Balance sheet of the Waitrose.
Economical: This factors mainly related to the changes or variation in the wider
economy namely interest rates, economic growth, inflation and exchange rate etc. Germany is a
best country for the Waitrose to expand their business operations and activities in that nation.
Such country has comparatively low raw material and lignite and potash in a significant amount.
In this, Power plants which burn or harm lignite are among the foremost sources of electricity for
people who are living in Germany (Lasseter, 2017). It is identify as leading producer of wind
turbines and solar power technology. For example: If the inflation rate of country is high than it
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reduce disposable income of Germans, thus, it highly impact on profitability and sales of
Waitrose. On the other hand, if inflation rate of country is stable then it positively impact on
Waitrose because it maximise customer base.
Social: This factor often look at the aspects of culture and cover population growth rate,
health consciousness, age distribution, changes in buying patterns and tastes etc. Germany has
approximately 82 million inhabitants. It means, Germany is the largest nation in the European
Union in terms of population (Lewis and et. al., 2017). Germany is a cosmopolitan, modern
country and its society is formed by a plurality of life styles and rightfully various non-
agricultural diversity. In Germany, most of the population are health consciousness, it is
negatively impact on business operations. It means sell of fast food product is not high which
directly impact on business operations of Waitrose. On the other hand, this factor is essential for
the company by providing quality and eco-friendly products to the Germans.
Technological: It is another factor of PESTEL analysis which is mainly related to the
utilisation of new ideas and invention such as automation, research and development activity,
rate of technological change and technology incentives. Germany backs technology and national
science in different ways. The Germany is a very advanced nation and spending maximum
amount of capital on research and development. People in this country are more educated and
living standard of them is also high. Thus, it is essential and important for the Waitrose to
introduce their product or service to customers and retain long run sustainability in that country.
Legal: It is another factor which is mainly related with the rules and regulations of
government and impact on business operations. In Germany, there are different laws and
regulations such as Public law, administrative law, private law, criminal law and many other. All
these are highly effects on Waitrose operations in a direct manner (Lufthansa, Lufthansa and
Lufthansa, 2015). Laws have been determined in order to prevent companies from Waitrose from
changing product of prices without informing customers. Recently, there has been a
misinformation or crackdown in product discounting e.g. perpetual discounting. Thus it is
essential and beneficial for the Waitrose to easily and successfully expand their business
operations in Germany.
Environmental: It is a last part of the PESTLE Analysis which includes different
elements such as physical, demographic, cultural, regulatory, economic, technological and
political environment that impacts the operations and growth of an enterprise. Changes in the
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climate system and atmospheres are among the biggest political and environmental challenges of
the business. Germany analysis itself particularly relay on natural resources. Knowing these
resources are sufficient and the effect the continual drain pull out those resources has on the
situation (Marquis and Maynard, 2015). Business are facing maximised pressure by agencies of
government in order to address environmental problems. Furthermore, organisations must
respond to these problem in ways that welfare society. Now Waitrose encourages its client to
shop at Waitrose.com. Waitrose van drivers will not only apply fuel-saving routes by also gather
unwanted plastic bags from clients and recycle them. Thus, it is essential and beneficial for the
company to maximise customer base and accomplish better results within predetermined time
period.
Therefore PESTLE Analysis is a best and effective framework for the retail industry to
analysis condition related to the countries economic, political, social, environmental,
technological and legal. All this are highly support an enterprise to successfully expand their
business operations and functions. Thus, it is also important for the firm to maximise their sales
and revenues as well as achieve better outcomes within predetermined time period.
Porter’s 5 Forces: It is another important and beneficial tool for evaluating competition
of an organisation. It is an effective technique or framework for knowing the factors that shape
competition within a sector. Porter's five force is simple framework for evaluating and assessing
the business position and competitive strength. Threat of entrants, supplier power, customer
power, threat of substitution and degree of competition are known as porter's 5 force analysis
which effect on business operations and activities in a direct manner (San cha, Longing and
Jimenez, 2015). This analysis supports in the identification of industry attractiveness and in
evaluating the prospects of opportunities and growth by assessing the intensity of rivals and
competitive trends amongst the existing clients.
Threats for competitors: This is identify as one of the main factors which will finally be
determining the attractiveness of retail sector. In Germany, there are different retailers such as
Schwartz group, Ali, Carrefour, Metro AG, DeKalb Group, Ewe group. All this are main
competitors of Waitrose that highly effects on its sales and profitability in a direct manner. Thus,
threats of competitors in Germany is much high which impact business operations and activities
of company in international marketplace.
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Threats from the Substitute: The present of substitutes will definitely impact the
attractiveness and performance of the sector and lower the profitability. Beside this, substitutes
directly impact the product price and demand from the clients. In Germany, Threat from the
substitutes in retail industry is more high. In Germany, there are various factors available for the
customers to buy product through online, use different modes of payment, home delivery
services and many other. All this are highly impact on business functions and operations
internationally in direct manner.
(Source: Porter’s 5 Forces, 2018)
Bargaining power of buyers: Customers are the organisation and an individual who are
ultimate buyers of the industry services and products. Purchasers include the distributors,
consumers, industrial purchasers and retailers (Assen, 2016). Bargaining power of byers includes
lower bargaining power and high quality products. Thus, it highly effects on business operations
and its activities directly. It also effects on company and its operations directly as well as
profitability. It is a role of business manager to provide quality product to the customers at
reasonable price which easily effects on business performance.
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Illustration 1: Porter’s 5 Forces

Bargaining power of suppliers: Suppliers supply the needed raw material or input to the
players of retail industry. These input can be in the aspect of finance, man, technology or
material related help from the suppliers. There are different factors that analysis the suppliers
bargaining power such as quality of raw material etc. Bargaining power of the suppliers in the
Germany is low because there are number of manufactures are more as compare to suppliers.
Thus, it effect on business activities and operations directly.
The intensity of the competitive rivalry: The organised retain sector in Germany is
mostly an unexplored territory. While different number of supertanker chain are entering the
marketplace, it is restricted most cities. Some of the challenges includes, Carrefour, Metro AG,
Schwartz group, Ali, DeKalb Group, Ewe group etc. All this are competitors of the Waitrose in
The Germany marketplace and effects on its sales and profitability directly.
Thus, porter's Five force analysis is important and beneficial for the Waitrose to analysis
their competitors, suppliers bargaining power, customer's bargaining power, revelry and
substitutes (Vim Brock, Melt and Schlemiel, 2016). All this will support an organisation to retain
their long run sustainability at international marketplace and accomplish better outputs within
predetermined time period. There are different ways to overcome rivalries which are determined
as under:
 Provide better quality product or services to the Germans at affordable price.
 Use advanced technology to promote their products and services easily. It will help an
enterprise to maximise customer base and accomplish long term goals and objectives
within predetermined time period.
 Follow different technology such as social media marketing, E-commerce, mobile
application and many other. All these are essential and valuable for the business to retain
long term sustainability and growth in Germany market.
 Company should arrange different programs where they easily introduce features and
quality of their products or services. To introduce new products and services, it is also beneficial and effective for the growth
and development of retail sector.
Demand-supply scheme: Demand and supply of the retail product in Germany is high
which effects on business operations and profitability, demand and supply both are interrelated
with each other for example: Demand of Retail products is high then supply of products is
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automatically increase and impact the success and development of business enterprise in a direct
manner. High demand of the product is beneficial for the Waitrose to increase their sales and
performance easily. It s also essential for the organisation to maximise customer's base and
accomplish their long term objectives and goals in that country (Young and Co, 2015). Thus,
entire growth and success of a retail industry is depend on the demand and supply of the products
in Germany where they expand their business operations and functions systematically.
CONCLUSION
From the above mentioned report it can be concluded that business expansion is
beneficial and important for the development and success of company. There are two types of
framework or models such as PESTEL analysis and Porter's five force analysis. Both are
valuable and useful model for an organisation to enter in international marketplace successfully.
PESTLE analysis support an enterprise to analysis political, legal, environmental, social,
technological and economic situation of country. Thus it is effective for the firm to achieve better
results easily. On the other hand, Porter's five force analysis also beneficial framework for the
company to analysis their competitors, bargaining power of customers and suppliers, threats of
substitutes etc. Therefore, it will also effect on business sales and profitability directly.
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REFERENCES
Books and Journals
Barack, M. E. M., 2016. Managing diversity: Toward a globally inclusive workplace. Sage
Publications.
Kassebaum, K., 2016. The role of social networking in global business environments. In Social
media and networking: Concepts, methodologies, tools, and applications (pp. 1635-
1653). IGI Global.
Girton, J. J. and Trescothick, M. J., 2017. Hard choices, soft law: Voluntary standards in global
trade, environment and social governance. Rutledge.
Kelk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Lasseter, P., 2017. Global strategic management. Macmillan International Higher Education.
Lewis, H. and et. al., 2017. Design+ environment: a global guide to designing greener goods.
Rutledge.
Lufthansa, F., Lufthansa, B.C. and Lufthansa, K.W., 2015. Organizational Behaviour: An
Evidence Based Approach. IAP.
Marquis, C. and Maynard, M., 2015. Institutional strategies in emerging markets. The Academy
of Management Annals. 9(1). pp.291-335.
San cha, C., Longing, A. and Jimenez, C., 2015. Sustainable supplier development practices:
Drivers and enablers in a global context. Journal of Purchasing and Supply
Management. 21(2). pp.95-102.
Assen, S., 2016. The Global City: Strategic Site, New Frontier. In Managing Urban Futures (pp.
89-104). Rutledge.
Vim Brock, J., Melt, S. and Schlemiel, T., 2016. On the role of context in business process
management. International Journal of Information Management. 36(3). pp.486-495.
Young, H.W.C. and Co, N., 2015. Toward a dynamic theory of global production
networks. Economic Geography. 91(1). pp.29-58.
Online
Porter’s 5 Forces. 2018. [Online] Available
through<https://www.cgma.org/resources/tools/essential-tools/porters-five-
forces.html>.
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