Retail Company: Analysis of ASOS plc and Strategies for Dealing with Environmental Challenges

This report provides an analysis of ASOS plc, a leading online retail brand, and discusses strategies for dealing with macro and micro environmental challenges in the retail industry.

Retail Company
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Table of Contents
Introduction......................................................................................................................................3
Introduction to the company............................................................................................................3
MAIN BODY...................................................................................................................................4
PEST ANALYSIS..................................................................................................................4
SWOT analysis.......................................................................................................................5
Strategies and tactics for dealing with macro and micro environmental challenges..............6
Recommendations..................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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Introduction
Retail industry is changing very fast and is affected by all the factors that are related with
their consumer and economy of the country to which they belong. The present report is based on
the understanding of concepts of the retail and the changes that are taking place in the fashion
industry because of changes that are taking place in overall external environment in which such
industries are functioning (Wells and Ellsworth, 2016). In the report there is a discussion based
on certain factors that are associated with ASOS plc that is leading brand dealing in clothing,
shoes and accessories having presence in UK and other different parts of the world. There is a
detailed analysis that is conducted by use of certain frameworks such as PEST analysis, SWOT
analysis, so that and understanding can be developed of the macro and micro environment
factors on the retail industry. Further recommendations are drawn to understand various ways to
deal with the challenges that are part of this retail industry.
Introduction to the company
ASOS plc is a British online retail brand dealing in products from cosmetic and fashion
retailer. It is a company that was founded in year 2000 in London and it has a major aim of
targeting the young adults. It is a online stores that is dealing in wide range of clothing &
accessories. It is a brand that is successfully shipping across all 196 countries from various areas
and locations such as EU, US and UK. Adam Crozier is the chairperson of this company and
Nicl beighton is the CEO. The various products in which they are dealing in include range of
accessories, clothing, beauty and shoes. It headquarters are present in Camden Town at greater
London House and they also have some of their offices located at Paris, New York,
Briminghama and Berlin. The main customer acre department of this brand is located at
Leavesden is present near Watdford in southwest at Hetfordshire. Since the year 2013 ASOS
opened its first office outside South east in Birmingham and in the later in the year 2013.
In the year 2019 in April, ASOS has informed their present customers that this is a brand
that is looking forward for making some changes in the return policies as the research policies as
it was found out by the management and research team of this organisation that many customers
were manipulating their return process that was leading to large amount of losses to this brand.
So there are some recent changes that are being made in the overall organisational structure of
this brand.
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MAIN BODY
PEST ANALYSIS
PEST Analysis is a tool that is used for understand various macro environmental factors that
are part of the external environment of a business and are posing a impact on its overall
functioning (Murray, Barlowand Siddiqui, 2019). It is a tool that is used for the purpose of
assessment of what are some positive and negative impact on the functioning and decision
making in a organisation. Below discussed is the PEST analysis of ASOS:
Political factors: It consists of the first factor that is part of external environment of a
business and it consists of various integrity and decision of government that enforce some
amount of impact on the functioning of organisation (Khalid, . and Rahman, 2019). Such as the
taxation policy, restrictions on trade with other countries who are not part of European Union,
tariff laws, employment laws are some of the factors that are part of the political environment of
the country and are going to impact ASOS in their overall functioning.
Economic factors: economic factors are tsheo that are related with the economy of the
country in which a particular organisation is functioning. It consist of various factors such as
inflation rate of economy, interest rates, working hours for the overall workforce of a country,
exchange rates and the most important factors of the economy consist of the cost of living index.
It all leads to get impact on the way ASOS will be affect. Such as in case of high interest rates
the cost of operations will be higher and it is going to impact the profit margins of this
organisation. Apart from this if the cost of living index will be higher in UK for their citizens
then it is also going to lead towards a negative impact on the present level of sales for ASOS plc
as people will have to spend higher amount on their absence necessities and thus it will become
more difficult for them to keep a portion of their income saved for spending on products such as
clothing, shoes or accessories that are major products of this brand.
Social factors: These are the factors that consist of the cultural factors that are impacting
the society and consist of the changing nature or behaviour of people living n the society. Such
as it consist of the preferences of people moving towards online shopping instead of visiting the
physical stores for fulfilment of their requirements of clothes or shoes. Then it is going to leads
towards a positive impact on the online sales of ASOS plc (Perera, 2017). On other hand, if there
is a trend shifting towards going physical stores as it may provide a outing to people with their
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family and friends then again this physical trend will leave a negative impact on ASOS plc as
this brand majorly covers the online platforms in order top reach to their customers.
Technological factors: The technological factors consist of the various aspects such as
globalisation, ecological aspects and also the changing nature of technology. Such as there has
been a complete shift in the way operations are talking place in retail organisations. Also, with
the advent of technology and internet the marketing and promotional activities have also shifted
from traditional means to complete digital media sources (Rastogi, . and Trivedi, 2016). Now, it
has all been focussed on the overall content that is generated by marketers to attract more
number of customers. It is a requirement for ASOS plc to go along with the changing technology
and adapt them so that they are able to survive in the era of high competition.
SWOT analysis
It is a framework that is used by companies in order analyse the effect on micro
environmental factors of the organisation. By the assistance of this, an organisation gain an
insight regarding its internal strength and weakness that is required to improve by companies in
order to gain success. The higher authorities of ASOS uses this tool in order to gain knowledge
about its competitors and strength in an effective manner. In addition to this, this tool also help
managers to identify their weakness and develop strategies in order to improve it. The SWOT
analysis of ASOS is given below:
Strength: One of the major strength of ASOS is its brand image in the market. The
company has the tie up with GLAAD that is one the largest voice of LGBT community. In
addition to this, the company has develop brand image by emphasizing on corporate
responsibility, it assist ASOS to build positive mind set towards brand in the mind set of
customers. Another strength of company is its design as it offer more than 30 sizes and
committed to giving all sizes in the same price (Stumbre, 2019). It offer fashionable products
that is taken from different brands and after this, ASOS group them with their own and specific
brand. By the assistance of this strategy, it become one of the best online destination in fashion
sector.
Weaknesses: The company invest more on research and development but did not willing
to compete with major competitors in terms of innovation and is consider as a weakness of the
company. ASOS provide free shipping to national and international buyers in order to gain more
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orders but it occur high cost to company that impact negatively on the profit margins of the
company.
Opportunities: Changing trends and change in customer purchasing behaviour open a
new market for the company. The company offer most of the products with different design
which is not older than 3 months. ASOS can use this to diversify into newer offerings and
products. The company is planning to introduce a TV advert campaign in France which will
assist in increasing the customer base. In addition to this, it offer fashion products and has the
opportunity to expand on beauty products. It will assist company to increase market presence and
higher profits as well.
Threats: One of the biggest threat of company is its competitors as it major competitors
are Bohol, Nbrown and so on. Bohol added more than 100 new style every day whereas Nbrown
deal in women wear segment includes partnership with Amazon. Another competitor that is enter
into market is Amazon’s wardrobe, which offer high discounts and offers than ASOS. All this
competitors’ impact negatively on the performance and profitability of company.
Strategies and tactics for dealing with macro and micro environmental challenges
There are many macro environmental factors that has high influence on the performance of
an organisation. In order to deal with this, mangers of ASOS uses strategies and tactics which is
given below:
Adoption of advanced technology: Nowadays, technology is changing rapidly and impact
on the overall buying behaviour of customers. The customers like to prefer those services and
goods that is innovative and new in market. In relation to ASOS, its mangers can use advanced
technology which will help them to provide on time deliver and service to customers. In addition
to this, it can also develop an application through which it can provide 24*7 service to customer
and deal with their queries rapidly. The company can also use online application such as
LinkedIn in order to make contact with professionals. All this will help company to decline the
impact of technological factor on the performance as well as productivity of an organisation.
Cost Leadership strategy: By the assistance of this strategy, ASOS is able to offer quality
goods and services to customers at lower price in market. This will help company to attract more
number of customer and enhance the customer base level which has a positive impact on the
productivity and profitability of company. In addition to this, the company is also able to deal
with economic factor that has high impact on the performance of an organisation.
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Positioning: Competitors are one of the internal factor that has big influence on performance
as well as profitability of a company. In relation to ASOS, its managers should focus on
providing unique products to customers as it help them to develop a different image in the mind
of customers. In addition to this, it also assist in attracting more number of people that leads to
increase in sales and profit of ASOS in an effective manner. By the assistance of this strategy,
company is able to attain competitive advantage at market place and can gain leading position in
the industry effectively.
New product development: It is important for an organisation to expand its operations
and activities in order to increase customer base and cover large market share (Mikhailov and
Razmochaeva, 2018). With reference to ASOS, the company is still not able to gain leading
position in the retail industry as it on deal in fashion retailing. The company can enter into new
product line such as beauty products in order to capture large market. In addition to this, it also
help company to fight with their rivals in an effective manner and earn higher as profits as well.
Moreover, the company can conduct marketing campaign and advertising campaign in
order to aware more number of people about its offerings (Bokarev, Sandler and Kozhevnikov,
2018). This will also help company to increase their customer base level that has direct impact
on sales and profitability in a positive manner. Along with this, the company can use paper
packaging that is eco friendly packaging in order to protect the environment as it is determine
that environmental factors also have impact on effectiveness of an organisation. With the help of
this, company is able to develop positive image in mind of customers and strengthen its market
reputation and position as well.
Recommendations
From the above discussion, there are various recommendations is develop for the retailers to
overcome with the challenges are as follows:
 It is recommended to retail companies to analyse the strategy of competitors as it
will help them to offer products and service in market more effectively and properly
than the competitors. It will also assist company to attract more number of customers
which has a positive impact on the profitability as well as productivity of the
company.
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 It is suggested to retailers to identify the market trends, culture, size and
requirements and then offer product properly. It will increase the acceptance level of
products and there is a high of success of product in market.
 In addition to this, it is recommended to retail organisations to use innovative and
advanced technology as it will help them to offer quality and on-time service to
customers. Moreover, the company can use social media applications such as
Facebook, Instagram, YouTube in order to promote and create awareness about
brand in market. It will assist retailers to earn higher profits and enhance their market
share effectively.
In order to overcome with the challenges and retain in market for longer time period, it is
essential for retailers to properly implement the above given startegies and ideas as it will help
them to increase productivity and earn higher profits as well. It also assist them to gain
competitive advantage at marketplace and fight with competitors in an effective and proper
manner.
CONCLUSION
From the above study, it has been analysed that retail industry is one of the emerging
industry that grows as well as develop rapidly. It is important for the companies prevailing in this
industry to examine the current trends and customer requirements, as it will help company to
gain success and sustain in market for longer time period. In addition to this, companies used
PESTLE framework in order to gain knowledge about the external factors that impact on the
performance and productivity of the organisation. Moreover, SWOT analysis is used by
managers for identifying internal strength and weaknesses of company. There are various
strategies and models is apply by higher authorities in order to overcome with the challenges in
an effective and proper manner.
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REFERENCES
Books & Journal
Wells, J.R. and Ellsworth, G., 2016. ASOS PLC.
Khalid, L.S. and Rahman, I.A., 2019. Measuring the Effect of the External Factors on Iraqi
Construction Projects Performance USING PESTLE Technique.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET), 3(1), pp.384-388.
Bragin, L.A., and et. al., 2018. Environmental Performance of Retail Trade Companies in
Russia. Journal of Environmental Management & Tourism, 9(1 (25)), pp.175-180.
Álvarez-Rodríguez, C., Martín-Gamboa, M. and Iribarren, D., 2019. Sustainability-oriented
management of retail stores through the combination of life cycle assessment and
dynamic data envelopment analysis. Science of The Total Environment, 683, pp.49-60.
Stumbre, D., 2019. Applicable Labour Taxes for a Retail Company.
Bokarev, B. A., Sandler, D. G. and Kozhevnikov, M. V., 2018. Customer Orientation of
Electricity Retail Sales Companies. In Challenges and Solutions in the Russian Energy
Sector (pp. 89-96). Springer, Cham.
Mikhailov, Y. I. and Razmochaeva, N. V., 2018, September. The Problems of Quality
Management Automation in Retail Sales. In 2018 IEEE International Conference"
Quality Management, Transport and Information Security, Information
Technologies"(IT&QM&IS) (pp. 372-375). IEEE.
Murray, J., Barlow, A. and Siddiqui, N., 2019, July. CONSUMER ENGAGEMENT WITH
FASHION RETAILERS ON SOCIAL MEDIA; CONSUMER RESPONSE TO THE
ONLINE CONTENT OF ASOS, H&M AND ZARA. In 2019 Global Fashion
Management Conference at Paris (pp. 466-470).
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