Challenges Faced by Debenhams plc: PESTLE and SWOT Analysis

The report identifies the reasons for the closure of Debenhams plc through PESTLE and SWOT analysis. The areas of failure, current trends and competition in the retail industry are also discussed. Recommendations for improvement are provided.

Inquiry Based Learning

Executive summary:
The aim of the report is to identify the challenges that had been faced by Debenhams plc
while carrying out certain operations online. Also, the report had identified the reasons for the
same through applying the PESTLE and SWOT analysis. Lastly, certain recommendation for the
improvement had also been provided under this report.

TABLE OF CONTENTS
.........................................................................................................................................................1
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Providing the company background...........................................................................................4
Identifying the areas of failure....................................................................................................5
Current trends and competition...................................................................................................6
SWOT Analysis of Debenham....................................................................................................6
Recommendations.......................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Better business operations are depended upon the working structures and the culture that
the company is following over the years. Also, the present report is based on Debenhams plc
that is British online retail brand and will discuss the main reasons why the business was closed
down in recent years. Further, the study will highlight the reason due to which the brand had
failed in the target markets and lead to complete closure of the business. Moreover, the study will
also analysis the current trends that are prevailing in retail e-commerce industries. Also, report
will explain the impact of internal and external factors on working of the business in the online
website through using various analysis. Lastly, report will provide the recommendation for the
improvement of the business so that the similar situation might be avoided while carrying out the
work on the online in any field or sector.
MAIN BODY
Providing the company background
Debenhams plc is the British departmental store that is currently operating in the united
kingdom, Denmark and Ireland. Also, company is known for selling the fashion dresses and in
21st century the company and had faced various financial difficulties and handled over the
operations to Boohoo in January 2021. However, in spite of various efforts the company was not
able to the increase sales of the online store and hence all Debenhams stores were finally closed
down in May 2021 (10 ECOMMERCE TRENDS THAT YOU NEED TO KNOW IN 2021, 2022).
Moreover, the company was working well in terms of selling goods that were targeted to
especially middle to high end customers that are interested in purchasing the household, beauty
and furniture products that were quite of good quality and prices.
Also, the retailer was once well-known in high street that was successful in fulfilling the
customer demands but due to the rising high cost patterns the company was unable to operate on
the daily basis (Kraus, Kraus and Osetskyi, 2020). Furthermore, all the clothes that were sold by
Debenhams were its own brand labels and made entirely in UK. Also, all the products were
delivered on timely manner through effective supply chain management that ensures that work is
carried out in smooth manner. Moreover, the company was focused on growing the domestic
production so that it is able to develop the brand image in the market and attract more number of

customers towards the business. Thus, Debenhams administered were failed to secure rescue deal
for the business because of the fastest decreasing sales of the business.
Identifying the areas of failure
Through the above case of Debenhams plc it can be said that there are several reasons
that it lead down to the closure of the business. Some reasons are been briefly described as
below:
Lack of innovation: For very company whether big or small it is required that the
company is the continuously into developing the new product range that is unique and innovative
from that of competitors for ensuring continuous success in the target market. Furthermore,
innovation requires detail market research so that based on the data collected new products might
be launched according to the customer needs (KUROCHKINA and et.al., 2019). However, lack
of creativity within Debenhams had lead to the closure of business and ineffective activities
within the workplace. Moreover, to keep up with the quality and the best management practices
the firm was more focused on making the business success rather than introducing new products
in the market. Also, there was lack of funds and resources that created problems to make the
business grow in long run.
Change of customer behaviour and habits: In the current times when the business
environment is volatile and there are continuous changes in demands of the customer it is very
difficult for Debenhams to analyse the market needs due to lack of resources. Thus, this was
another area that leads to the closure of the business. Moreover, if the needs were analysed
closely and well-defined manner on time than it would not have made the business total loss as
through close analysis the firm would have made the required changes in working processes.
Ignoring the competitors: This was the one area that have not allowed cited firm to
overcome certain weakness in against of the competitors. Also, while operating in nay market it
is required that competitors policies and strategies are well-known so based on that certain
actions might be taken (Duarte, Cabrita and Cruz-Machado, 2019). However, in the event of
occurrence of continuous losses Debenhams was not able to analyse the big competitors in the
target markets and was totally relying on its own products and sales that further became major
reason for its failure. Moreover, this was the main reason due to which the firm was not able to
connect with the customers like other retailers in the market.

Lack of flexibility in terms of market changes: In recent times during the pandemic the
markets have been completely switched towards the online business. Hence, Debenhams had
also tried to become flexible in closing its stores in various markets and conducting all selling
activities online. Moreover, this also requires complete knowledge of how the market is operated
in the online. Hence, lack of such market changes knowledge have lead the business to shut
down.
Current trends and competition
It can be said that current trends of supermarket is one where customers are considered
supreme and of prime importance. Moreover, to sustain in retail industry it is required that firm
is able to attract the shopper preferences through bringing some kind of differentiation within the
products so that more customers are attracted towards the services. Furthermore, Debenhams plc
in earlier times was generating good revenues of about 400 million pound from the online sales
in year 2019-20. However, strong competition from online retail business such as Amazon,
ASOS, next etc. had created the more problems as they were introducing the new product line to
satisfy customer needs at regular intervals that is not possible for the small firms to reach up-to
that level (Khodjayev, 2021). Moreover, according to certain reports it was stated that mobile
shopping is been growing and sales that are made with the mobile phones would rise to $3.79
trillion in 2022. Thus, from the growing number it can be said that it is very much required for
all the online e-business to come up with strong business strategies and policies so that it is able
to survive in the market for longer duration. Furthermore, certain reports have stated that young
consumers have completely shifted to online purchasing and about 67% of the young generation
have spent the money online rather than on offline stores.
SWOT Analysis of Debenham.
Swot analysis is a type of framework which analyses competitive positioning of the
company in business environment. The Debenham company has been maintaining its prominent
position in market by critically analysing and reviewing Swot analysis.
Strengths
 Debenham has spread their stores in UK, Ireland and Denmark with 150+ stores and
presence in over 20 countries .With over 30000 employees company is able to meet
customers need and wants in due time which enhances their productivity and reputation
in the market. Company has high brand equity in fashion world.

 Strong multi retail stores that provides excellent customer services to large masses
 It has strengths in mergers and acquisitions of the company
Weakness
 As the company have many retail stores their presence reduces the market share .
Company has lost market share in the niche categories as it is not able to tackle the
competence with new entrants (Debenhams SWOT Analysis, Competitors & USP, 2022).
 Financial planning is not done properly and efficiently.
 Company has not been doing good with forecasting product demand which leads to
missing opportunities compared to its competitors.
Opportunities
 With stable cash flows company can invest in new technology as well as in new product
segments.
 High opportunities to spread in newer regions or places so that more revenues might be
generated (Kembauw and et.al., 2020).
 It has the benefit of developing the global presence around the world and maximize the
sales of the business.
Threats:
 Increasing competition in the online business might create problems for the successful
operations.
 Rising prices in the market would only cause decrease in the total production of the
business.
 Lack of brand awareness among the target market would not create sales for the business
Another analysis that would be conducted for identifying the external factors would be
through PESTLE analysis
Political: There are various factors that affects the working of the business and these
need to be clearly analysed so that there are no future problems. Also, factors such as political
instability, restriction on trade etc. might negatively affect the operation as if there is lot of
political instability than firm would not be able to operate successfully in the target market thus
reducing the overall efficiency.
Economical : Factors such as inflation rate, trade and tariff restrictions etc. need to be
analysed before selling any kind of goods in the market. Moreover, if the trade restrictions are

very higher than the quoted firm would not be able to sell the goods in the target market and
bring more innovation at the workplace (Wang and et.al., 2020). Also, higher inflation rate in the
market means the prices of the goods would be higher that will further create problems for the
business in long run.
Social: In the current era there are various societal norms, beliefs and customs etc. that
are followed by certain group of people. Moreover, these need to be strictly followed and
customers preferences need to be known closely so that positive outcomes are derived in the end.
Technological: Technology keeps on changing from time to time and hence it is required
that Debenhams look into this factor closely so that best methods might be used within the
business (Zuhdi and et.al., 2019). Moreover, using the best online strategies will also help cited
firm to grow the business in the best possible manner
Legal: Certain government laws and regulations have to be strictly followed so that there
is no kind of government interferences later in the future. Also, various laws such as employment
laws, minimum wages laws, health and safety laws etc. are some kind that need to be kept in
mind while operating on the large scale.
Environmental: In the current era people are the concern with protecting the
environment so that more sustainability might be ensured (Fisch and Block, 2018). Also, the firm
need to keep in mind the methods that are been used within the business so that better corporate
social responsibility might be fulfilled and resources might be used in the best possible manner.
Recommendations
 It is recommanded to quoted firm that it should have taken help of the external agency
and find out investors that would help the business lift up during the hard times. Also,
these agencies would ensure in developing operational efficiency and would also allow in
the business to look into the aspects of increasing the customer goods value rather than
just focusing on the sales (Liu, Lee and Lee, 2020). Moreover, it would have allowed the
firm to find out the best possible solutions while keeping in mid the brand equity and the
image in target markets.
CONCLUSION
From the above report it can be concluded that retail business have to be managed in
most effective manner through looking into certain factors so that the efficiency is not decreased.

Furthermore, the report had described in detail about the working of Debenhams plc and the
reasons for its closure in recent time. Also, the area of failure such as lack of innovation, intense
market competition and much more had also been discussed so that better understanding might
be developed. Moreover, certain current trends and competition in retail industry had also been
analysed. Lastly, PESTLE and SWOT analysis had been conducted for analysing certain factors
long with certain recommendation had also been provided that might be used by the business to
make it better than the current situation.

REFERENCES
Books and Journals
Duarte, S., Cabrita, M. D. R. and Cruz-Machado, V., 2019, August. Business model, lean and
green management and industry 4.0: A conceptual relationship. In International
Conference on Management Science and Engineering Management (pp. 359-372).
Springer, Cham.
Fisch, C. and Block, J., 2018. Six tips for your (systematic) literature review in business and
management research. Management Review Quarterly. 68(2). pp.103-106.
Kembauw, E. and et.al., 2020. Strategies of Financial Management Quality Control in
Business. TEST Engineering & Management. 82. pp.16256-16266.
Khodjayev, A. R., 2021. Efficiency of using modern information and communication
technologies in small business. In World science: problems and innovations (pp. 130-
132).
Kraus, N., Kraus, K. and Osetskyi, V., 2020. New quality of financial institutions and business
management. Baltic Journal of Economic Studies. 6(1). pp.59-66.
KUROCHKINA, A. A. and et.al., 2019. Management features of small and medium-sized
business enterprises. Revista Espacios. 40(34).
Liu, Y., Lee, J. M. and Lee, C., 2020. The challenges and opportunities of a global health crisis:
the management and business implications of COVID-19 from an Asian
perspective. Asian Business & Management. 19(3). pp.277-297.
Wang, F. and et.al., 2020. Big data analytics on enterprise credit risk evaluation of e-Business
platform. Information Systems and e-Business Management. 18(3). pp.311-350.
Zuhdi, S. and et.al., 2019. Role of Social Media Marketing in the Successful Implementation of
Business Management. International Journal of Recent Technology and Engineering.
8(2). pp.3841-3844.
Online
Debenhams SWOT Analysis, Competitors & USP. 2022. [Online]. Available
through:<https://www.mbaskool.com/brandguide/lifestyle-and-retail/5225-debenhams.html>.
10 ECOMMERCE TRENDS THAT YOU NEED TO KNOW IN 2021. 2022. [Online]. Available
through:<https://www.oberlo.com/blog/ecommerce-trends>.