BAM 4009 - Business Environment Analysis & Risk Management Report

This report provides a comprehensive analysis of Victoria's Secret's business environment, encompassing both internal and external factors. The internal analysis utilizes frameworks like VRIO and SWOT to evaluate the company's resources, capabilities, strengths, and weaknesses, focusing on innovative products, store designs, and customer base. The external analysis employs PESTLE and Porter's Five Forces to assess the political, economic, social, technological, legal, and competitive landscape, identifying opportunities and threats. Furthermore, the report includes a risk assessment, pinpointing potential business risks and proposing an action plan for effective risk management. This detailed evaluation aims to provide strategic insights for Victoria's Secret to enhance its performance and adapt to the evolving market dynamics.

Business Environment
BAM 4009
Assessment 2
Individual Report
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Table of Contents
Introduction ..................................................................................................................3
Carry out an internal environment analysis of your chosen organization using
suitable conceptual models..........................................................................................3
Conduct an external environment analysis of your chosen organization using suitable
conceptual models........................................................................................................7
Undertake a risk assessment of your chosen company, identify business risks and
prepare an action plan showing how could these risks be managed. .........................9
Reference List ............................................................................................................12

Introduction
Business environment is the collection of the internal and the external factors that can
affect the operation of the business. The factors may includes the employees, needs of the
customers, demand and supply, management, activities of the government, technology social
trends, market trends, economical conditions and so on(Betti, and Sarens, 2020). The
business environment always changes according to the needs of the changing needs of the
customers therefore, an organization can survive only when it adapt with the changes. It has a
great importance for the business because it assist a business concert in identifying the
opportunities and threat to improve the performance pf the business. It enables the company
to cope with the rapid changes and optimum mutilation of the resources. This helps in
formulation of the strategy which provide direction to the company for the growth and
improve public image as well. Thus, the report will cover the internal and external analysis of
the business environment and the assessment of the risk.
Carry out an internal environment analysis of your chosen organization
using suitable conceptual models
The internal analysis is a method for determining the internal environment of the
company which may includes the components such as resources, assets, capabilities,
opportunities, threat, competencies and so on. This helps in identifying the strengths and
weaknesses which help the company in decision making in determining the growth areas. The
analysis assists the company in eliminating the threat and convert the weaknesses into the
opportunities so that it can gain the competitive advantages by differentiating from the
competitors. In this report, Victoria's Secret has been taken into consideration which is an
American company that involves in the business of selling clothes, lingerie and beauty
products. Therefore, the internal analysis of the Victoria's Secret has been understood below
by the following model which are depicted as under:
VIRO
It is a framework which help the company in evaluating their resources and
capabilities to gain the competitive advantage.
Innovative products
Value In relation to Victoria's Secret, it provides its customers innovative

Rarity
Imitability
Organized to value
products at the reasonable prices(Kwang-Keun, 2020) They have
good collections of the designs and they linked it with their fashion
show.
Victoria's Secret has innovative dealer that other organization does
not have and provides rare designs with their advance technology of
manufacturing.
With reference to Victoria's Secret, it uses very innovative
technology that other firm does not uses and are not able to copy it.
In context to Victoria's Secret, the com,pamny always strive to bring
the new designs and have the interior design studio which always
search for the new product line, this may help an organization to
attract the loungers and females.
Perfect interior design and sales work force
Value
Rarity
Imitability
Organized to value
Victoria's Secret, offers to its customers high quality interior designs
and employ the skilled workforce which provides their great service
to the customers.
Victoria's Secret stores is different from the other stores which has
perfect interior design including music, decor, lighting and so on
which provide attract the people to their stores(Lopes,Oliveira, and
Silveira, 2020). Therefore, it has unique layout and different
collection of clothing, lingerie and others.
In relation to Victoria's Secret, none of he company can copy the
brand of Victoria's Secret because it is not possible for the other store
to invest such big amount for the interior designs and offerings,
therefore they require lot of finance for this.
The company have skilled and cognitive workforce which provide
comfort to their customers. Besides, when they hire new employees
so they are trained accordingly.
SWOT

It is a strategic tool which is used to evaluate the competitive position of an
organization and also help in developing the strategic planning to gain the competitive
advantage.
Strength Weaknesses
Fashion shows: Victoria's Secret organize
fashion shows of high priced and the newest
seasonal styles which are showcased in all
the leading magazines and
channels(Hajizadeh,2019).
Premium customers: An organization have
strong customers base whop purchase inner
wear and the lingerie on regular basis. It
engages its customers by providing them
high quality products and increase their
satisfaction level which make them loyal to a
concern.
Celebrity following: Victoria's Secret is a
brand which creates the celebrities because it
get showcased their products through the
models that make them celebrity. The
company primarily select the females models
that are related to the targeted audience.
High attrition rate: The company have to
spend more on the training and development
of their staff to enhance their skilled and
cognition so that it can compete its
competitors.
Poor penetration: The company have outlets
mainly in the cities therefore it is reachable
to only those customers who lives in Urban
areas.
Switching to new product line: The
company introduces its new products line so
the it can compete with the lower cost
competitors but this has negatively impact
the company.
Opportunities Threats
Emerging markets: In context to Victoria's
Secret, the market are emerging because
income level of the customer are increased
and the population as well. Therefore, the
market share of the company can be
increased with their innovative and quality
products.
Online advantages: The company makes a
lot of investment to the internet platform so
Intense competition: Victoria's Secret has
many competitors in the market such as
Bath& Body works, Nordstrom, Thirdlove
and so on. They provide tough competition to
a business concern which force the customers
top switch for their products.

that it can access to the new sales channel
which may help kin increasing the market
share(Teoli, Sanvictores, and An,2019).
Porter's five forces
 Threat of new entrants (low): This threat is low in context to the Victoria's Secret as
it is a very renowned lingerie company highly liked and preferred by its consumers.
The organisation is widely renowned and is a market leader in beauty retailer sector
which is not likely to get affected by the emergence of new enterprises.
 Competitive rivalry (high): This threat is high in relation with the company as the
market is full of potential rivals in the beauty retail sector. The major competitors of
Victoria's Secret are Savage x Fenty, ThirdLove, Frederick's Of Hollywood,
Bluebella, Fleur Du Mal, Tezenis etc (15 Best Alternatives To Victoria’s Secret For
Stunning Intimates, 2021).
 Threats of substitutes (high): The wide availability of substitutes is likely to shift
preferences of consumers from the products and services of an organisation. This
threat is high in context to Victoria's Secret as due to heavy competition, various
alternative are available to consumers.
 Bargaining power of buyers (moderate): This factor is associated with the
negotiating power of customers to charge lower prices for the products of a company.
This threat is moderate in context to Victoria's Secret as individuals demand
maximum worth at reasonable prices specially individuals of lower income groups.
However brand conscious and loyal customers of Victoria's Secret are willing to pay
demanded prices.
 Bargaining power of suppliers (low): This threat is low in context to the Victoria's
Secret as the company had established a strong associations with its suppliers for
mutual benefits. The large network of suppliers offers competitive advantage to
company and reduce suppliers negotiating power to charge high prices.
BSC
A balanced scorecard is a metric of performance which is used to determine, improve
and control the various functions of the business and the associated outcomes(Alsharari, Eid

and Assiri, 2018). Each company have different balance scorecard that can be based on their
size and nature of the firm and the industry in which it operates. There are main four
components of the balance scorecard which includes the financial perspectives, customers
perspectives, internal business perspectives, innovative and learning perspectives.
Conduct an external environment analysis of your chosen organization
using suitable conceptual models
The external analysis is an examination of the business that is operated in a particular
industry which help in analyzing the factors that may affect the operations of the business.
This assists in encouraging the business growth into new areas and anticipate changes and
adapt to these changes to satisfy the customers. Thus the external analysis in relation to
Victoria's Secret has been done which have been understood with the help of different models
that are depicted as under:
PESTLE analysis
This is a tool which is used by the marketers to track and monitor the external
environment factors that have impact on the organization and its strategies. This tool help the
organization to understand the growth and decline of the market. It identifies the strength and
weaknesses of the firm and suggest the ways for the future growth.
Factors Analysis
Political This is a factor which refers to the involvement of the government that
can impact the operation of a business concern(Michaud and et. al.,
2021). This may includes tax policies, trade restrictions, reforms, tariffs,
political stability and so on. With reference to Victoria's Secret, the
company have good relation with the government which help it in
continuing its business operation but it may affected by the political
factors as the government change which impose their own rules and
regulations. Thus it can be affected by the new policies of the
government and they may also restrict the trade or may increase taxes
which create burden over the company.
Economical This factors refers to the growth of the economy which may influence
the performance of the business organization or a particular industry. It
includes the tax rates, interest rates, exchange rates, inflation rates and so
on. In relation to the Victoria's Secret, the company provides goods to the

customers at the specific rates because it offers premium quality
products. But this can be impacted by the exchange rates or interest
because it also has to increase the price of their products which leads to
the decrease in customers. This impact the purchasing power of the
customers because they buy only when they can afford the products.
Social This refers to the behavior of the customers which includes the cultural
norms, expectations, health conscious, population growth rates, age
distribution and so on(Grassi and Vallati, 2019). In context to Victoria's
Secret, the company is impacted by the changing tastes of the customers
therefor the markets of the company understands the needs of their
customers so that it can provides the products accordingly. This help the
company to attract the customers and increase it market share. The
company also forecast the purchasing power of the customers and
provide different offerings to the customers to increase the base.
Technological This factors refers to the innovation, automation, research and
development that may influence the company's operation. In relation to
Victoria's Secret, an organization can use the social media marketing to
capture the market which is a good platform to attract the customers. This
is now common which bare used by the marketers of a business concern
to increase awareness about their products which help them in improving
their performance. The company can bring the innovative products to
attract the more customers by considering their perspectives. The
company also invest in the technologies to maximize the retrofits and
can reinvest the profits for the future technologies.
Legal This is factors which are related to the safety of the customer and the
employees as well. This may include the consumer laws, labor laws,
intellectual property, industry regulation, license and permits and so on.
As regard with Victoria's Secret, it follows the employments protection
laws which help it to make the employees aware about this rights and
regulation which they have veto follow in an organization(Zahari and
Romli, 2019). The company follows e consume protection laws so that it
can make aware the people about their rights when they are deceived in

terms of high prices and defected products.
Environmental This factors is influenced by the surrounding of the environment which
includes the environment protection laws, energy consumption laws,
disposal laws and so on. With reference to Victoria's Secret,it should
adopt the innovative recycling and waste management practices. This
help the company in saving the environment from being polluted.
Thus, the pestle analysis is good to analysis the external environment which facilitates
in understanding the wider environment and encourage the development by identifying the
risk.
Undertake a risk assessment of your chosen company, identify business
risks and prepare an action plan showing how could these risks be
managed.
- Explain what is risk assessments
- Categories of risk and its association with your chosen organization
- Risk Management process
- Risk assessment tools
- Action plan to mitigate the risk
Risk assessment
This is a process of identifying the potential jeopardy that can negatively impact the
operation of the business in an organization. The assessment help in determining the risk to
the business and protect the workers at the workplace from the hazards. It helps in
recognizing and control the risk at the workplace and create awareness among the
employees(Walenta, 2020). The risk assessment helps a business concern to set the risk
regulation that are based on the safe practices and the legal requirements which assist in
eliminating the incidents at the workplace.
Categories of risk
There are many types of risk that can be faced by an organization during its
operations which are described in context to the Victoria's Secret:

 Operational risk: In relation to Victoria's Secret this is the risk which may arise due
to improper implementation of the processes or other issues such as government
regulation, weather problems etc. which crest obstacle in operating the activities of
the business(Bindewald, Michiels, and Bauhus 2020).
 Budget risk: With reference to Victoria's Secret, when the company does not make
appropriate estimation of the budget allocation so it leads to the delay in project or
the activities of the business or some times fail to deliver the quality project.
 Resource risk: In context to Victoria's Secret, this risk arises when the company not
able to manage its staff, budget and other resources. When the employees are not
fairly paid then they may leave the organization which leads to the incomplete of
project work.
 Technology risk: In relation to Victoria's Secret, this risk occurs when there is
sudden changes in the technology and the installation of the new technology due to
which the workforce have lack of skills and knowledge.
 Quality and process risk: With reference to Victoria's Secret, when the staff is not
properly hired or have lack of training so they may produce the low quality work.
Risk Management process
The risk assessment process has been discussed which can be followed by an organization are
as under:
 Identify the risk: This is the first step where the identification is done for the events
which can negatively impact the business operations. Therefore the risk manager are
responsible to identify the risk and develop an effective plan to mitigate it.
 Assess the risk: The risk can be assessed in two ways such as qualitative and
quantitative where the risk manager prioritize the risk on its occurring possibility in
the qualitative risk(arafort,Mesquida, and Mas, 2018). The manger establishes the
financial evaluation in the quantitative risk.
 Treat the risk: A risk manager develop a plan in order to eliminate the risk and
reduce the possibility of the occurrence and impacts as well on the business.
 Monitor and report on the risk: After treatment of the risk, a report is made by the
risk manager in order to ensure that there are appropriate forums to mitigate the risk.
Risk assessment tools
There are various tools which can help the risk manager in identifying the risk that
can impact the business of an organization which are discussed as under:

 Risk matrix: This is a tools which assist the risk manager in identifying quantitative
risk that may negatively impact the company.
 Decision tree: This tools provide its assistance to the company in evaluating the risk
by applying policies or choosing the different modes of actions.
 Failure modes and effect analysis: This assessment tool help the mangers to process
the step or design the various questions which help in assessing the risk(stomin and
et. al., 2019).
 Bowtie model: This is used to mitigate the risk with rare and high impact reason and
prevent the occurrence of the risk.
Action plan to mitigate the risk
The company can mitigate the risk by adopting the effective strategies and decision to
eliminate it thus, the company can avoid it when it represent the the unwanted consequences
or may accept it find the low failure rate. Therefore it can take steps to reduce and control the
risk. The company can also transfer the risk to the third party by giving up some control.

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Online
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