Business Plan for Diamond Trendy Furniture: Macro and Micro Environmental Analysis

This report provides a business plan for Diamond Trendy Furniture, covering macro and micro environmental analysis through PESTLE analysis and Porter's Five Forces. It also includes recommendations for the company to enhance its growth and gain competitive advantage in the market.

Title Page
Introduction to Business
Assessment 2 – Individual Report
Start-up Business Type & Business Name
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Table of Contents
Introduction...........................................................................................................................................3
Overview of the Report.....................................................................................................................3
Background of the Company.............................................................................................................3
Main Body (Business Plan).....................................................................................................................4
Different Types of Businesses...........................................................................................................4
Your Business Structure....................................................................................................................5
Macro Environment...........................................................................................................................5
Micro Environment...........................................................................................................................6
Impacts on your Business..................................................................................................................7
Conclusion.............................................................................................................................................8
Overall argument summary...............................................................................................................8
Recommendations.............................................................................................................................8
References List......................................................................................................................................9
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Introduction
Overview of the Report
Business is defined as the procedure of establishing an organization by entrepreneurs in order
to gain profit in the market. There is different type of business such as sole proprietorship,
partnership, limited liability corporate and corporations which is chosen by entrepreneurs
according to their preferences (Fogarassy and Finger, 2020). In the following report the
company which has been taken is Diamond Trendy Furniture which deals in furniture
products in the market of the UK. The report covers macro and micro environmental analysis
of the respective company through applying PESTLE analysis and porters five forces.
Furthermore, the report also discusses what impacts these environmental components have on
the business of respective company.
Background of the Company
The organization name is Diamond Trendy Furniture which deals in furniture design custom
cabinetry, custom crane countertops, staircase, bathroom vanities, closer to nuts and office
furniture. The company offers various services and allow customers to customize their
products. The target audience of the respective company is millennials. The main aim of the
company is to serve its customer base by manufacturing innovative and trendy products along
with investing 1,50,000 pounds for the project in order to operate business smoothly.
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Main Body (Business Plan)
Different Types of Businesses
Sole proprietorship
This type of business is considered as unincorporated organisation that is mainly owned by a
single person. In this type of business least amount of financial and legal security is required.
The owner of the company is fully liable for all profits and liabilities incurred by the
company. This business also allows the owner to have full control over decision making
along with providing tax benefits as income is considered as personal income of owner and
therefore only taxed once.
Partnership
This kind of business is owned by two or more people who have an agreement between them.
Owners in partnership are accountable for all the liabilities of the company (Akpoviroro and
Owotutu, 2018). Both partners are responsible for taking any decision related to the
organisational business Phil stop like sole proprietorship this business also allow owners to
take advantage of full through taxation.
Limited liability company
This type of business is our one of the most flexible which are a combination of both
partnership and corporation. This business allows the pass-through taxation related to
partnership with limited liability of corporation. It protects its owners from personal
accountability for liabilities or debts in occurred by the company.
Corporation
These kinds of businesses are separate legal entity developed by shareholders. This business
protects its owners from personal libel for any legal disputes or debt off organization. There
are three main types of corporations C corporation, S corporation and non-profit corporation.
This type of businesses is most complicated as compared to other three business (Demil,
Lecocq and Warnier, 2018).
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Your Business Structure
The business structure of diamond Trendy furniture is partnership as it is helps company in
sharing burden of liabilities. It also allows owners in investing a proper amount which is not
easy to get after COVID-19.
Macro Environment
Pestel analysis
Pestel analysis is defined as framework of macro environmental components utilised by
companies in order to scan environmental components of strategic management. It is a tool
used by organization to gain a macro picture of their industrial environment. In context to
Diamond Trendy Furniture, PESTLE analysis has been explained below in detail
Political factors
These components of the framework are associated with government policies and regulations
which could impact working of a company. In case of the select company, government
regulations such as labour policy taxation and excise duties problems might impact business
functions. Political relationships of the UK with other countries could also impact business
operations of the respective company (Topleva and Prokopov, 2020). This aspect could
impact the import of raw material export of furniture to other nations.
Economic factors
These factors of the PESTLE analysis help in determining how economic conditions of a
country could influence business operations. In case of respective company, interest rate
might increase due to inflation in the market which could impact the supply chain because of
shift in cash flows. after COVID-19 income of people has also been decreased which Reduce
their luxurious buying that could influence trading of products.
Social factors
These elements of the framework are related to attitude and belief of customers that could
impact culture of an organization. In case of the selected company, the modifications in
lifestyle of the people and behaviour to work along with leisure also persuade market share.
The presence of limited qualified and skilled employees could also impact working
environment of the company (Márquez, Karyotakis and Papaelias, 2018).
Technological factors
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These factors are associated with specialized technologies that could influence functions of
an organization. In case of respective company, modifications in trend generated a challenge
in providing customers with latest products in the market. Development of online shopping
has become normal and trendy in the market which Constraint the company to utilise digital
platforms for selling their product.
Legal factors
These components are associated with legal rules and policies which might impact business
functions of an organization. In case of selected company, it is very important for the
company to follow all the rules and maintain certain standards for efficient business function.
Environmental factors
These factors off the analysis related to sustainable activities of organizations which could
influence environment. In case of selected company, it is very important for organization to
design products which could increase awareness of sustainability.
Micro Environment
Porters Five Forces
Competitive rivalry
There are number of international and local organizations or manufacturers in the furniture
industry which could impact presence of Diamond Trendy Furniture. This industry is highly
penetrated because of acceptance and success of local furniture manufacturer in various
countries. Major companies which are dealing at international level such as IKEA, Tesco and
Amazon could create high competition further respective company (Dhakal, 2019). The other
global brands have also collected revenues in billions that represent high competition in the
industry.
Bargaining power of suppliers
The bargaining power of suppliers is low in context of furniture industry. The temper is main
product utilised in pure food and furniture products while there are other form of artificial
material and goods that are used in producing furniture commodities. The suppliers of raw
material are in excess that reduces their bargaining power with the respective company.
Bargaining power of buyers
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The bargaining power of customers in terms of furniture industry is high. One of the main
components that are contributing in increasing bargaining power of customers is the limited
presence of radical and high valued innovations in commodities offered by the company. This
lack of innovation decreases switching cost of respective customers and they do not hesitate
to move from one brand to another. The presence of many organizations in the furniture
industry allows customers to compare various commodities offered by them which further
decrease market share of respective company.
Threat of new entrants
In case of furniture company, the threat of new entrance is high because to establish a
company in this sector does not require large capital investment (Klun and Trkman, 2018). It
is highly possible to start furniture company at very small level with minimum capital and
human resources. High growth and size of organization also allow new entrance to make
entry in this industry in order to make positive return on investments.
Threat of substitutes
In case of selected company, the threat of substitute is low as there are no other options
available for furniture. There have been innovations in items but the demand for furniture has
been therefore centuries. Hence there is no close substitute for furniture commodities.
Impacts on your Business
From the above analysis of macro and micro environmental factors it has been predicted that
the company could face competition from existing companies as well as new entrants. The
changes in behaviour of customers related to buying modern or trendy furniture could also
impact business operations of the selected company. The non-sustainable activities could also
influence image of company among customers. The Presence of international brand as well as
threat of new entrants could develop high competition environment along with impacting
market share of the company. Due to COVID-19 leisure income of people has also been
deceased which could highly impact revenue of the company. The advancement in
technology and high demand of online shopping has also generated new trend in the industry
which might create hurdles for organisation.
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Conclusion
Overall argument summary
From the above report it has been concluded that it is very essential for an organization to
conduct its macro and micro environmental analysis. This is essential because it will help the
company in making unique decisions that could provide them competitive advantage in the
market. It has also been analysed that companies must implement innovation strategies so
that they could provide new commodities to customers.
Recommendations
The below mentioned are some recommendations which the Diamond Trendy Furniture must
implemented in order to enhance its growth and gain competitive advantage in the market:
 The company needs to take advantage of new technologies that will help it in
increasing online sales. As more customers are switching towards online shopping
this could assist customers in finding perfect peace further house without any
problems.
 The company also needs to implement fast and free shipping services which will also
enhance their customer base.
 Consumers do not want to wait for many weeks or days to get their furniture. As the
company is targeting millennials which is the largest furniture buying demographics,
by offering them pre-assembled pieces in several colours or options will make it easy
for them to pick up delivery.
 The company could also implement personalization by offering customers guidance
and suggestions on online platforms. For this the company could utilise social media
marketing technology and customer services which will help the firm in providing
proper guidance to its consumer base. The company also needs to take sustainable
steps in order to meet environmental concerns.
 Organization should appoint knowledgeable workforce in order to provide
exceptional services to consumers. Remote staff and customer support personal is
required to be able to provide customers with information they demand.
 It is very essential for the company to keep an eye on new modern trends which will
help it in understanding modifications in behaviour of customers.
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References List
Akpoviroro, K.S. and Owotutu, S.O., 2018. Impact of external business environment on
organizational Performance. IJARIIE, 4(3), pp.498-506.
Demil, B., Lecocq, X. and Warnier, V., 2018. “Business model thinking”, business
ecosystems and platforms: the new perspective on the environment of the
organization. M@ n@ gement, 21(4), pp.1213-1228.
Dhakal, T., 2019. An analytical model on business diffusion. Journal of Industrial
Engineering and Management Science, 2019(1), pp.119-128.
Fogarassy, C. and Finger, D., 2020. Theoretical and practical approaches of circular economy
for business models and technological solutions. Resources, 9(6), p.76.
Klun, M. and Trkman, P., 2018. Business process management–at the crossroads. Business
Process Management Journal.
Márquez, F.P.G., Karyotakis, A. and Papaelias, M. eds., 2018. Renewable energies: Business
outlook 2050. Springer.
Topleva, S.A. and Prokopov, T.V., 2020. Integrated business model for sustainability of
small and medium-sized enterprises in the food industry: Creating value added
through ecodesign. British Food Journal.
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