Matalan Plc Report

This report analyzes the macro and micro environmental factors affecting Matalan Plc, a leading UK clothing retailer. It examines the impact of political, economic, social, technological, legal, and environmental changes on the company's performance. The report also suggests strategies and tactics to overcome these challenges and enhance Matalan's market share and sales. Desklib provides past papers and solved assignments for students.

Table of Contents
INTRODUCTION ..........................................................................................................................1
Introduction to Retail.......................................................................................................................1
Introduction to Company ................................................................................................................2
Key relevant changes within the UK fashion retail.........................................................................3
Relevant changes within the micro environment............................................................................5
Suggest and discuss strategies and tactics that could be used.........................................................6
Strategies to overcome changes in macro environment..............................................................6
Strategies to overcome changes in micro environment...............................................................7
Recommendation ............................................................................................................................7
Conclusion ......................................................................................................................................7
REFERENCES................................................................................................................................8
1. APPENDIX 1...............................................................................................................................9

INTRODUCTION
The clothing retail industry is among the fastest growing industry within the global
market. Customers in a market are highly attracted towards fashion products and accessories
which results in high rate of sales and profit for clothing retailers. The retail industry focus on
attracting customers by offering wide range of new and innovative products in the market. This
report is in context to a UK based clothing retailer known as Matalan. The report will identify
various micro and macro factors that influence the performance and profitability of the company
within the retail industry. The effective suggestions will be also included in this report to support
Matalan in increasing its market share and sales.
Introduction to Retail
Retailing is a part of a large term, e-commerce. Retailing can be referred as buying and
selling of good and services. The retail market is expanding due to increase in educated
customers entering into the market and economy. Retailing is a convincing, comfortable and
convenient way of selling products and services. Though it is an old concept of trade or business
Retailing has now converted into new shapes and forms. Retailing includes a direct interface
with the customers and the link of business functions from the design stage of a product to its
delivery as well as post delivery service to the consumer. The Fashion retail industry is well
accepted by customers as it is based on first hand transaction with the customers. This industry is
highly transforming into forms due to new marketing techniques, management techniques,
change I technology, changing customers demands and perception in the market.
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Introduction to Company
Matalan Plc is a leading clothing retailer in UK, the current market capitalization of the
company is more than £695.83M. The company is popular as an out of town retailer in UK, and
distributes its products straight form the producer or manufacturer. Matalan operated a chain of
145 retail stores all around the United Kingdom and offers a wide range of products including
clothing, footwear and accessories for men, women as well as children. It also offers furnishings
and decoration products for home. The company is trading various famous brands such as
Wonderbra, Wrangler, Wolsey, Falmer etc. Missouri Topco Limited is a parent company to
Malatan, that is a huge advantage for the cited company as it provides a customer attraction and
satisfaction in the market by brand value. It the year 2015 the cited company increased their
market share by 3.1% that was 0.3% as compared to the market share in 2014. Matalan is now
the UK's fifth biggest clothing retailer in terms of value and third largest in terms of volume. The
company currently has more that 9 million active members, on the other hand the company has
also increased the number of retail stores form 143 to 163 in the past few years. Matalan is using
effective management, marketing and trading concepts which support the company to increase
sales and profit in the market. The company also focus in adjusting its strategies in order to meet
changing needs and demands of the customers. The company also offers effective services such
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Ill
ustration 1: UK fashion industry statistics

as online selling and delivering of good and services to their customers. The company has
various competitors such as New Look, Marks and Spencer etc.
Key relevant changes within the UK fashion retail
There are various macro or external factors that is affecting UK fashion retail industry,
these macro factors cannot be controlled by the companies but can focus on adopting the changes
effectively to sustain in the market. There are various changes in UK fashion retail influencing
the industry, In order to analyse the macro factor or changes within UK fashion retail Pestle
Analysis can be used as below -
 Political factors – The political factors can be referred as the largest source of uncertainty
for the fashion industry, Various geopolitical events have affected the fashion industry in
the year 2016 and 2017. According to different reports on fashion industry terrorism,
geopolitical instability, Brexit and stalled trade deals may also increase a pervasive sense
of uncertainty in the global economy. Brexit uncertainty is another political factor, UK is
going to de-attach from the European Union in March 2019, retailers needs to develop
effective strategies for managing the export and import tariffs than may be applied after
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Illustration 2:
Matalan UK
(Source: Matalan clothing store, 2017)

the Brexit. It will also change immigration and employment laws that are highly affecting
the human resource policies of the retail companies such as Matalan. This changes
various organisational policies of the companies operating in United Kingdom (Martino
and et.al.,2017).
 Economical factors – The economic factors also have a great impact on the fashion retail
industry in UK. While it is a very huge part of the global economy, it is influenced by the
economic changes all over the world. The Economic changes highly affect the sales and
profit of firms such as Matalan. The fashion industry is considered to be a key industry
within the global economy. The economy of a country affects purchasing power of
buyers, therefore it has a negative impact of sales and profit of the retail industry.
 Social factors – Socio-cultural also plays a vital role in the growth and development of
the fashion retail industry. There are various major changes occurred within last few
years that influenced the demand related to fashion product in the market. The social
factors such generation gaps, changing perception of customers influence the business
strategies, products design, function etc within a retail company (Kasemsap, 2018).
 Technological factors – The technological factors have largely affected the business I
each and every industry. Fashion retail industry achieved high rate of growth and
development due to the improvement in the technological factors such as use of internet,
online transaction, smartphone application etc. All these factors have supported retail
companies to develop efficiency in their business operations or functions.
 Legal factors – The legal challenges also influence fashion retail industry, compliance
and ethics are significant focus areas for the clothing brands. There are various laws
related to labour, employment, human resources and business laws that keep on
changing, these changes needs to be considered to run a business successfully.
 Environmental factors – The environment and sustainability are also another significant
terms of the fashion retail industry. The retail stores are focusing on developing
environment friendly brand or products. In the emerging global market more than 65%
customers seek sustainable fashion products. The retail fashion brands are getting careful
about their carbon footprint and are also promoting themselves as an environment
friendly brands. The retail fashion stores are developing sustainability goals or objectives
and actively working to achieve those goals.
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The UK fashion retail is observing a drastic change that is influencing its strategic
decisions, business functions and performance. Matalan Plc has faced a lot if issues such as
increasing competitors, high cost of production, changing customers demands and perception etc.
Relevant changes within the micro environment
There are various micro factors or internal factors that are closely linked to a business or
organisation and its success. In order to develop effective business strategies it is important to
analyse internal factors which may affect business functions and performance (Paes, Pastore and
Mello, 2017). The internal analysis for Matalan retail company can be described as below -
 Customers – Each and every business needs customers, therefore it is important for them
to be oriented towards their customers. The customer's perception changes very
frequently along with their needs and demand, therefore it is necessary for the company
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Illustration 3: Micro environmental factors

to focus on these changes in order to achieve business goals and objectives. Customers
have a direct impact on the sales and profit of a company.
 Employees – The human resources are main strength of each and every business or
organisation. In order to gain efficiency or effectiveness within the business functions it
is important to develop and maintain a strong workforce. The employee's demands are
also changing with time, people are getting educated and requires various benefits along
with a good income. This have an impact on the overall planning or policies of
organisation such as Malatan.
 Competitors – The competition also has a great effect on the Malatan Plc, there are many
companies which are entering into the clothing industry. On the other hand existing
companies are also developing new strategies for the business. The competitors greatly
affect sales and profit of a company, there are many competitors for Matalan such as
BHS, The children's place, Fast retailing etc. All these companies are competing in the
retail industry by designing and adopting new and innovative techniques or strategies om
the business (Kowalkiewicz, Rosemann and Dootson, 2017).
 Suppliers – The another important micro element within business environment is a
supplier, Matalan has a huge number of suppliers which are very important for the
company to trade in the market. The suppliers can change their cost of goods and supply
which can affect organisation's pricing strategies. The change in cost of resources are also
changing with time that has a major impact on the business functions, sales and profit.
 Shareholders – Each and every business needs investment to grow, the interest of
shareholders can also change as there are a lot of options available in the market such as
food industry which is also highly growing. This can affect the growth and development
of the business.
Suggest and discuss strategies and tactics that could be used
Strategies to overcome changes in macro environment
1. Technological factors – Matalan Plc can easily overcome the technological changes in the
business environment in order to achieve success and profit. The company can overcome
this change by providing continues training to the staff for helping them in coping up
with technological changes.
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2. Environmental factors – The retail company can ensure that they are using disposable
material for packaging the products. They can also develop environmental friendly
campaign to gain positive brand image in the market.
Strategies to overcome changes in micro environment
1. Customers – In order to overcome this challenge or change Matalan can use various
strategies such as online marketing and promotion, social media platforms etc to
understand customer's needs and demand. This can help the company to provide effective
good and services to attract and retain customers (Davis, Yue and Davis, 2017).
2. Competitors – The company can use various compeittive advanatges in order to adopt or
manage this change. Matalan has a strong position in the market and a huge number of
stores, it can increase its stores in order to enhance sales and sustain its position.
Recommendation
In order to sustain the market position Matalan needs to focus on various areas of the
business. The various recommendations for the company are as mentioned below -
1. Developing effective human resources through appropriate recruitment process
2. Reducing cost of the business by using new technologies
3. Marketing and promotional campaign can be useful for attracting customers, in existing
as well as new markets. For example – offers and discounts can help to increase sales
4. Online platforms can be useful to develop a good brand image such as social media
platform can support a Matalan to connect directly to its customers.
Conclusion
The above report concluded that fashion retail is one of the fastest growing industry in
the global market. The Matalan Plc greatly affected by various macro and micro changes such as
customers, political changes, economic changes etc as discussed in the above report. The report
also determined recommendations and strategies in order to overcome or manage various
changes in the business environment.
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REFERENCES
Books and Journals
Davis, L., Yue, H. and Davis, D., 2017. Shopping orientation, store attributes, and apparel retail
format preference.
Kowalkiewicz, M., Rosemann, M. and Dootson, P., 2017. Retail 5.0: Check out the future.
Paes, F., Pastore, R. and de Mello, C.H.P., 2017, October. How Brazilian Startups are Shaping
Retail and Shopper Experience. InCLAV 2017.
Kasemsap, K., 2018. The roles of corporate marketing strategies and brand management in the
global retail industry.Digital Marketing and Consumer Engagement: Concepts,
Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and
Applications, p.294.
Martino, G., Fera, M., Iannone, R. and Miranda, S., 2017. Supply chain risk assessment in the
fashion retail industry: An analytic network process approach.Int. J. Appl. Eng. Res, 12,
pp.140-154.
Online
Matalan clothing store, 2016 [Online]. Available
through:<https://www.retailgazette.co.uk/blog/2016/06/matalan-profits-hit-by-halving-ebitda/>
UK fashion industry statistics, 2017 [Online]. Available through:<https://fashionunited.uk/uk-
fashion-industry-statistics>
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1. APPENDIX 1
PESTLE ANALYSIS
Political
1. Brexit Uncertainty
2. Export import tariffs
3. Government taxes
Economical
1. Changing per capita income
2. Purchasing power of customers
3. Income of individuals
Social
1. Changing customer perception
2. Changing culture
3. Generation gaps
Technological
1. Internet
2. Online trading
Legal
1. Changing Employment laws
2. Changing Sales law
3. Changing Business laws
Environmental
1. Environmental degradation
2. Loss of ecosystem.
3. Increasing pollution
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