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Macro environmental analysis of Soft Drinks Subsector within UK 1 b. Value chain analysis of Britvic Plc

   

Added on  2020-12-18

11 Pages3753 Words358 Views
INDUSTRY ANALYSIS ANDPOSSIBLE ADAPTATIONS

Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Macro environmental analysis of Soft Drinks Subsector within UK..........................................1b. Value chain analysis of Britvic Plc.........................................................................................3c. Explanation of befitting adaptations of the Britvic Plc...........................................................5d. Reflection on the usefulness of an academic model...............................................................6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................9

INTRODUCTIONBusiness environment can be referred to as the sum total of external and internal factorswhich have a direct and significant influence upon the operations and functioning of business(Wang and Zhao, 2017). Here, the internal factors comprise of workers, culture, organisationalpolicies etc. On the contrary, the external factors comprise of social, political, legal, demographicfactors etc. In this regard, the following essay is based upon Britvic Plc which is a Britishmanufacturer of soft drinks operating within the Soft Drinks Sub Sector of UK. This organisationis headquartered in Hemel Hempstead, England and is a part of the FTSE 250 Index. This essayincludes PESTEL analysis to evaluate the impact of macro environment and Porter Five Forcesto analyse the internal environment. Analysis of internal environment is done by making use ofValue Chain. Further, the adaptations of company are given. Lastly, the usefulness of academicmodel is described in the essay.MAIN BODYMacro environmental analysis of Soft Drinks Subsector within UKMacro environmental analysis can be referred to as the evaluation of the impact ofexternal factors upon the functioning of business sector (Wheelen and et. al., 2017). In thisregard, Soft Drinks is an essential sub-sector of Food & Beverage industry of United Kingdom.Porter Five Force analysis has been used to analyse the impact of environmental influencesfactors upon Soft Drinks Sub sector of UK.Porter's five forces modelThis is regarded as one of the most significant and relevant models which is used toidentify the overall scenario of external influences. This comprise of five basic forces thatdirectly impacts upon the range of strategies used along with the products and services that areoffered by a business organisation within marketplace. By taking this approach into dueconsideration, it can be said that an entity can easily gain competitive and strategic advantagewhich provide assistance in ensuring long term sustainability of company in marketplace(Radziszewska-Zielina and Śladowski, 2017). Besides this, this industry analysis model also aidsan organisation to make an assessment of the overall business sector which may help a companyto make appropriate decisions as per the needs and requirements. In this regard, Porter FiveForce Model consists of five factors which determine the competitive intensity, attractiveness1

and the profitability of a business sub sector. These five forces are, namely, competitive rivalry,threat of new entrants, power of suppliers, power of buyers and threat of substitutes. All of theseare discussed below in context of Soft Drinks Sub Sector of United Kingdom as follows:-Competitive rivalry in industry- This is regarded as one of the most crucial factorswhich have a significant influence upon the functioning of an organisation. In this regard, thecompetitive rivalry within Soft Drinks Sub Sector is found to be low as not many competitorsexist within the soft drinks industry. This sector is found to be growing very steadily and further,growth rate is relatively small (Potts, 2017). The fixed costs are a high part of total cost ofcompanies operating within Soft Drinks industry. This acts as a barrier for entry to new firmsand thus, the number of organisations surviving within this sub sector and posing competition forSoft Drinks Sub Sector is low. Thus, competition within Soft Drinks sub sector is low whichimplies that Britvic possesses the power to charge customers with prices as per their own accord.Threat of new entrants- Yet another crucial factor which impacts upon the operations aswell as functioning of businesses which are operating as a part of a business sector is the threatposed by entry of new companies within the industry. It is generally seen that companies are notable to adopt all the changes in accordance with the requirements of industry as such kind ofmodification require huge investment to be made by organisations (Pereira, da Silva and Soule,2018). Within Soft Drinks Sub Sector, it is usually seen that it is not easy for a firm to gain entryinto this sub sector owing to the high fixed costs that are to be incurred by an organisation forsustaining in marketplace. This causes difficulties for new firms to gain entry into sub sector ofSoft Drinks. The presence of companies such as Britvic Plc pose threats for the existing entitieswithin UK as well as the new entities which are intending to gain entry into this sub sector.Bargaining power of suppliers- This is a force which defines the power that suppliers orvendors possess in relation to supply of goods and services to firms operating within a marketplace. With regards to Soft Drinks Sub Sector, it is seen that the bargaining power of supplierswithin this sector is quite high as there are less number of soft drink companies in UnitedKingdom.Bargaining power of customers- Yet another important aspect of Porter's five forceswhich have a substantial impact on the functioning and the operations of business organisationsis the negotiation power of consumers. It can be said that the Soft Drinks sub sector of UnitedKingdom possess a large base of customers belonging to different age groups. The bargaining2

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