Impact of PESTEL and Porter's Five Forces on Harrods

This report analyses the impact of PESTEL and Porter's Five Forces on Harrods, including the importance of Porter's Value Chain activities and how information technology can improve the business. It covers the background of Harrods, its history, products and services offered, and the impact of social and technological factors. It also analyses the threat of new entrants, bargaining power of suppliers, and threats of substitutes. The report further discusses the importance of operations, marketing and sales, and firm infrastructure in Porter's Value Chain, and how they contribute to the company's success. Finally, it suggests ways in which Harrods can deploy information technology to improve its business and address issues related to it.

Business Report

Table of Contents
INTRODUCTION ............................................................................................................................3
Background of the chosen company with a brief history and product or services offered by that
organisation...................................................................................................................................3
Impact of two PESTEL factors on the chosen organisation..........................................................4
Impact of three Porter's five forces on the chosen organisation....................................................5
Analyse three activities form the Porter's Value Chain and importance of these activities for the
chosen organisation.......................................................................................................................7
How a business could deploy the information technology to improve its business and address
issues regarding the information technology.................................................................................8
CONCLUSION ...............................................................................................................................10
REFERENCES.................................................................................................................................11

INTRODUCTION
The information technology management is a broad term which is used to describe
planning, directing and coordination of an activity which is related to the information system.
Resources managed by the information technology specialists are virtually limitless. It includes
several networks, software, cloud program, hardware, data collection tool, mobile device and
emerging technologies (Ahmed and Ballard, 2022). The company chosen for this report is
HARRODS, which is a departmental store. It was founded during 1849 and its headquarter is
situate din London, England. This report will cover the history of chosen company, PESTLE
analysis, Porter's five forces, porter's Value Chain, issues or concern regarding deploy information
system to improve business.
Background of the chosen company with a brief history and product or services offered by that
organisation.
HARRODS Company is a upmarket department store which is situated on the Brompton
Road within Knightsbridge, London. Its brand is recognised at worldwide, its Knightsbridge store
has around 1 million square feet of the selling space with approximately 220 different
departments’ stores. Its prestige and global reputation is instilled through their own brand values.
The respective company’s values are British, Luxury, innovation and sensation. HARRODS
brand applies to the other enterprises undertaken by HARRODS bank, HARRODS group of
company and many more. Shares of Harrods were floated on London Stock Exchange under name
of the Harrods Stores London during 1998. In 1905, present iconic building of the Harrods was
completed. Harrods also bought various smaller departmental stores including Swan and Edgar, D
H Evans, Dickins and Jones, Walter Carter and many more (Cremer and et. al ., 2022).
History
This company was established by Charles Henry Harrod in 1824. He ran this enterprise,
variously listed as mercer, draper and haberdasher, until at least 1831. In 1825, this company was
listed as the ‘Harrod and Wicking, Linen Drapers, Retail, but this partnership was disband at the
end of that year. In 1834, in London’s East End, the owner established wholesale grocery in the
Stepeny at 4 Cable street with special interest in tea. In 1849, Harrods has moved to the
Knightsbridge area of London, which is near to the Hyde Park. Harrod’s shops contain 330
departments which offer a wide range of the product such as clothing for childrens, men and

women, jewellery, bridal dress, electronic, stationer, furniture, house wares, food and drink, home
appliances, packaged gifts, health and beauty items and many more. Service at the Harrods
include restaurants, personal shopping assistance programme is known as “by Appointment”, a
tailor, dispensing pharmacy, barbers shop, a watch repair service, Harrods bank, a beauty spa and
salon, Harrods financial services, food delivery, planning and desisging services and many more
(Dodds and Sadowski, 2022). Around 300000 customers visit its shop during peak days,
comprising highest proportions of the buyers from non English speaking nations of department
store within London. Mission statement of Harrods explain that its aim to be numbers one
department store at global level for the luxury branded merchandise, expertise, profitability and
maintain the unprecedented level of retail standard. This company act all the time with initiatives,
good manners, confidence, discretion and integrity. It works hard and better to continuously build
its knowledge and cherish their relationship to be trusted experts and guides. They act responsibly
and also do the right things.
Impact of two PESTEL factors on the chosen organisation
PESTEL analysis is one of the essential tool to analyse and identify key drivers of the
changes in organisational environment. This framework is imperative for the companies as it help
them to understand the market dynamic and also improve the business continuously. The business
organisations uses this tool to keep a track of external factors that impact a business. This tool is
an acronym for the political, economical, social, technological, legal and environmental factors. It
help the companies to determine analyse market situation ( Hackney, Friesner and Patil, 2022). In
context of the HARRODS, this company get impacted by some of the macro environmental
factors which are mentioned below:
 Social factors- With changes in societal tradition or behaviour, individuals tend to
purchase more often and rigorously. Society and the social trend develop shopping habits
norm of individuals, their behaviour and attitude may change or transform because of
various element. Demographic social component like income level, gender, race, age and
customer's education level impact the retailer's business. It is important for Harrods to
enhance more focus on safety, quality and hygienic part of the product. Customers have

developed the online shopping behaviour since last few years. HARRODS could use its
social media in order to access the demands for a specific product. The company has an
international customer base which allow them to make an informed business judgement
where they become able to expand and gain the new customers with minimized risk
(Yoost, Anef and Crawford, 2022).
 Technology- This factor is related to the development in innovation that may impact the
organisational activities and market. Pestle forces allude to the innovation motivators,
computerization, mechanical change, degree of advancement, innovative work and
measure of the mechanical mindfulness that market has. All these variables may effect the
choice to enter and not enter certain business, to dispatch and not dispatch etc. the
technological components are consider rate of the technical innovation that may influence
a market ( Höltge, Theron and Ungar, 2022). In relation to HARRODS, for the aim of
preserving stock and maintaining company's reputation, the respective firm has pit in place
various computer supported technologies which enhance company's service provision.
Recently, HARRODS has introduces a face detecting ads in its store, that profile the
customers based on what they see. Located near its famous escalators, all these moving ads
collect information on buyers to see that who is viewing which campaign and how engaged
buyers are. These changes prepare the respective company for future. HARRODS have no
choice by they adapt the changing technology as these changes may be helpful for the
organisational progress and success.
Impact of three Porter's five forces on the chosen organisation
Porter's five forces theory of the competitive position analysis was developed by Michael
E Porter during 1979. it help to identify that where powers are lies in any business situation. It is
useful in both to understand strength of the organisational current competitive position and
strength of the position which an organisational may look for moving into. Five force of this
framework entails evaluating the buyers, suppliers, industry competitors, potential entrants and
substitute to establish competitiveness of the industry on the basis of external factors. In relation to
the HARRODS, impact of the Porter's five forces are discussed below:
 Threat of new entrants- Entry of new firm in and operating in the market is observed as
threat fro the establishes companies within market. It may impact the competitive position

of an established firm as new entrants may add some new production capacity and it also
impact their market shares. New entrants also bring the additional resource that may force
the existing companies to invest more. Therefore, these situation become very difficult for
existing business ( Leversedge, 2022). In context of HARRODS, threat of the new
department store in London is very low as the customer's buying behaviour is inclined in
UK towards established and respected stores. However, the food sector within UK has
witnessed various new entrants form time to time such as Aldi Lidl who are competitors of
the respective company. Different organisation who are in this type of business are
entering in this market as a high potential market due to which threat grows every year.
Another main reason of lower threat is on account of the investors not having full
information or knowledge about market.
 Bargaining power of suppliers- It addresses that how easily suppliers can drive up input's
cost. It is impacted by number of the supplier of key inputs. The business organisation are
dependent on supplier. The decisions of suppliers related to price, quality and service have
an adverse impact on the company's profitability (Longo, and et. al., 2022). The
bargaining power of supplier is low that is quite the opposite in comparison to bargaining
power of buyers. Owing to a huge customer base HARRODS has upper hand over the
suppliers, because every supplier has target to accomplish sales and attain shelf space
which can be catered via respective e company. This company is UK's well known
department store and has good turnover and high sales over the years that make it a good
choice for the suppliers to have their products on shelves of stores.
 Threats of substitute- is is another major threat of company's position in market. A
strong substitute can be generated by existence of the price competitive product and
service alternatives. Sometimes, companies in an industry face competition from the
outside industry product, that may be very close substitute of each other (McGee,
Edmiston, and Haward, 2022). In relation to HARRODS, threat of substitute for this
company is not that high though there can be high chance of the substitute with buyer's
shifting to discount stores. For example in the shifting time in economy several store like
specialized store, discount store and supermarket go for the stock clearance that make them
offer the substitute for goods purchased in department store. Therefore, in this situation
buyers become more inclined to buy product at a discount store rather than in department

store. Likewise, if there is high disposal income and rate of interest lower in the economy
the buyers would prefer to go for premium product rather that low prices products.
Analyse three activities form the Porter's Value Chain and importance of these activities for the
chosen organisation
The porter's Value Chain model or theory is a strategic management tool which is defined
ans a combination of the processes that the business uses to make money. This model contain two
activities, in which primary activity include the sales, marketing, operation, service and out
bonding logistics. Whereas, the secondary activities include the human resource management,
infrastructure, Procurement, and technological department. In context of the Harrdos, there are
three activities of value chain which are mentioned below:
 Operations- In this activity, raw material is converted into finished goods. Customer value
is enhanced majorly at this phase if operation are up to mark and product is manufactured
in right manner to meet quality standard.. Thus, the value creation derives for an efficient
of operational system (Newcomb, 2022).
 Marketing and sales- This activity apply push as well pull strategy in order to increase
product's sales. The firm exist to for making profit and if the profit can be enhanced by
sales and marketing, then company has to use these tools. In relation to Harrdos, its
marketing need to be done rightly in order to build the brand equity and its sales should be
done by using proper channel without false commitment given to buyers.
 Firm infrastructure- In this, these activities are related to the several administrative,
accounting, quality assurance, planning, finance, management, legal operation and
government regulations. In case of Harrdos, if the company not follow the government's
regulation and operate its business without a proper infrastructure, then the company might
face big hurdle and legal consequences
Importance of these activities

The above discussed activities help the company to identify and evaluate the source of cost
efficiency,both negative and positive and benefits a business in many ways. These are very
beneficial for the company as it make easy to convert raw material into finished goods and increase
the company's sales that lead a high profit margin.
 Enhance quality of offering- This analysis improve the market's quality and help to make
it more effective and competitive. Continuous reviewing of the primary and support
activity improve the product's quality due to tough competition.
 Boosts profit- This value chain theory improve the organisational profit margin because of
an effective logistics and distribution. Decreased redundancy and increased consumer
value provide highest possible revenue to business (Ou and Xu, 2022).
 Increase sustainability- This model help the company to increase their long term
sustainability and adaptability while enhancing their valuable offering, it can be done by
mapping value chain process and eliminate the menial activities which do not contribute to
the final products.
How a business could deploy the information technology to improve its business and address
issues regarding the information technology
Information technology is the development, maintenance and use of the computer
software, network and system. These are used for processing and distribution of the data. From the
company's online store to enterprise software a business uses to recorded the transactions and
gather information. Therefore, the information technology has an essential role in organisational
daily operation and success. Role of the IT in business organisation is observed in hot it help he
companies to become more productive, save money, increase performance, improve customers
experience and enhance the managerial decision making (Suswati and Sawitri, 2022). In context
of the Harrods, this company uses information technology to improve its business but their are
some issues also which are mentioned below:
Role of information technology
 Improved organisational communication- When a business deploy the information
system to improve the business process, then it facilitate the communication through
various platform such as email, software, company's internet, video chat and internet in

general. In relation to Harrods, its IT allow that company to hold virtual meeting with
clients and staff very easily. At the same time, its employees can also access and share
information and collaborate on their work.
 Information technology and business decision making- Role of the information
technology within management decision making process is observed in toll such as
decision support systems and ERP software that help company's manager see business
performance data in real time in order to make some more informed decisions. In case of
Harrods, these type of software depict online dashboard with the information about
organisational customers, sales, marketing trend, finance and inventory levels. Its manger
can use data for deciding that which product they should promote or stop selling.
 Security and maintenances of the data base- In an organisation, IT department is
responsible for security procedure up to standard. IT intending to prevent manipulation of
the data and system by an unauthorised third party (Wang and et. al., 2022). In context of
Harrods, its information technology crate, maintain and administrate the databases for
things such as financial records, trends, sales transactions, customer profile, product
catalogues and other marketing activities to name but a few.
Issues with the information technology
 Spyware and personal information- Most common issue with the information
technology is spyware that steals the private and personal information from buyers or
workers. Information is them stored and also used at will by the hackers for a fraudulent
purchase. In relation to Harrods, if it face any such type of activity then the company's
information and programs may be used for and fraudulent purchase and other illegal
practise.
 Implement cost and regulatory compliance- In order to get latest solutions implement
require money and time. Ordinarily, there is an interruption in the business services and
new stages of services become implemented. Therefore, Harrods's worker's training is
required and buyers may experience decline in the services while implementation is going
on.
 Breaches in security- When an information is stored electronic, then there is possibilities
of having a security breaches. The hacker are evolving with the technology and never up to

any goods. To protect data of a company, a security specialist must be kept on staff (Wu
and et. al., 2022).
CONCLUSION
From the above report it is concluded that, the information technology management help
the company in planning, coordinating and decision making process of a business. For an
organisation, it is very crucial to identify the external elements which influence the business
operational activities as these factors impact a company by outside in term of technology,
political, economic, social and many more. Analysis of the porters five forces help the company to
analyse their capacity to compete in the market and identity threat of new entrant in market place.
It also determine the bargaining power of customers s and suppliers in market. The porters value
chain theory is very useful for the company as it eliminate the waste and provide a stronger brand
recognition to the company. In a business, information technology is very essential part as it it
make the communication effective through various platform and protect the personal data of
customers. Hence, it is identify that the IT play an important role in performing company's daily
operational activities efficiently.

REFERENCES
Books and Journals
Ahmed, U.K.B. and Ballard, J.D., 2022. Autoinducing peptide-based quorum signaling systems in
Clostridioides difficile. Current opinion in microbiology, 65, pp.81-86.
Cremer, K and et. al ., 2022. The effect of surgical strategy in difficult cholecystectomy cases on
postoperative complications outcome: a value-based healthcare comparative
study. Surgical Endoscopy, pp.1-10.
Dodds, R. and Sadowski, M., 2022. KASA Turkey: Solving a Strategy and Sales Issue While
Keeping Core Values: An Intrepid Travel CASE STUDY. In Case Based Research in
Tourism, Travel, Hospitality and Events (pp. 279-293). Springer, Singapore.
Hackney, D., Friesner, D. and Patil, V., 2022. From research to practice: Incorporating consumer
bankruptcy into community development initiatives. Community Development, pp.1-14.
Höltge, J., Theron, L. and Ungar, M., 2022. A multisystemic perspective on the temporal interplay
between adolescent depression and resilience-supporting individual and social
resources. Journal of Affective Disorders, 297, pp.225-232.
Leversedge, F.J., 2022. Flexor Tendon and Flexor Pulley Injuries. Hand and Wrist Injuries in
Baseball, pp.159-173.
Longo, L., and et. al., 2022. Coupling the beams: How controlled extraction methods and FTIR-
spectroscopy, OM and SEM reveal the grinding of starchy plants in the Pontic steppe
36,000 years ago. Journal of Archaeological Science: Reports, 41, p.103333.
McGee, J., Edmiston, D. and Haward, M., 2022. Objectives, Approaches and Techniques. In The
Future of Antarctica (pp. 51-82). Springer, Singapore.
Newcomb, H., 2022. 4 Other People's Fictions: Cultural Appropriation, Cultural Integrity, and
International Media Strategies. In Mass media and free trade (pp. 92-109). University of
Texas Press.
Ou, F. and Xu, J., 2022. S3Feature: A static sensitive subgraph-based feature for android malware
detection. Computers & Security, 112, p.102513.
Suswati, E. and Sawitri, D., 2022. ENTREPRENEURIAL LEADERSHIP AND LEARNING
ORGANIZATION ITS INFLUENCE ON MIDWIVES PERFORMANCE MEDIATING

BY ORGANIZATIONAL COMMITMENT. International Journal of
Entrepreneurship, 26, pp.1-15.
Wang, R., and et. al., 2022. Semi-analytical modeling and experimental evaluation on a novel
standing wave rotary piezoelectric actuator driven by single-phase signal. Mechanical
Systems and Signal Processing, 163, p.108177.
Wu, C., and et. al., 2022. Precision cutting of PDMS film with UV-nanosecond laser based on
heat generation-diffusion regulation. Optics & Laser Technology, 145, p.107462.
Yoost, B.L., Anef, M.R.C. and Crawford, L.R., 2022. Fundamentals of Nursing E-Book: Active
Learning for Collaborative Practice. Elsevier Health Sciences.