Business Analysis Report: Lovely Linens Case Study - BUSS1001

This report presents a comprehensive business analysis of Lovely Linens, a company specializing in linen products. The analysis begins with an introduction outlining the scope of the report, followed by an in-depth market analysis, assessing market size, customer segments, and purchasing behavior. The report then delves into environmental analysis using the PESTLE model, examining political, economic, social, technological, legal, and environmental factors impacting the business. A detailed competitor analysis utilizes Porter's Five Forces and perceptual mapping to evaluate Lovely Linens' position within the textile industry. Market measurements are discussed, including customer satisfaction, financial statements, and customer acquisition. The report further explores productivity and profitability analysis, highlighting the company's efficiency and financial performance. The target market is identified, considering customer segments and promotional objectives, including direct marketing and advertising campaigns. The report concludes with a summary of findings, emphasizing Lovely Linens' success and providing recommendations for future growth.

Business Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
Market analysis............................................................................................................................3
Environmental analysis................................................................................................................4
Competitor analysis.....................................................................................................................5
Market measurements..................................................................................................................6
Productivity and profitability analysis.........................................................................................7
Target market...............................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business analysis is concerned with identifying business needs and determining potential
solutions for the problems through conducting a research. Business analysis involves several
elements such as market, environment, competitor analysis and several different analysis that
allows business to identify problems and suitable solutions for the problem. This report will
discuss the case study to Lovely Linens and will undertake business analysis for the organisation.
Lovely Linens is a business of creating linen and is being operated by Emma and Flossy, Lovely
Linens has managed to earn good profit and sale in short time period.
Market analysis
Market analysis can be defined as qualitative and quantitative analysis of market. This
involves analysis of market size in terms of volume and value. Followed by this analysis of
market also involve analysing various customer segments and their purchasing behaviour.
Market research is carried out to understand and identify customer requirements and what
made customers select Lovely Linen over its competitors Jones, (2019). This also is done to
identify areas for expansion of the business. Identification of business opportunity is also a
reason that Lovely Linen analyse its market.
Market in which Lovely Linens are interested is European market and along with this
Lovely Linens also are selling their product to specialty department store and other stores as their
customers. Along with this Lovely Linen is also interested in extending in New Zealand Market.
This means that Lovely Linens are interested in utilising national as well as multinational
opportunities as their potential market.
There are several practices for market analysis and among these Lovely Linens can
undertake different types of research for different factors. This means research related to
customers, analysis and research related to competitors, risk analysis, trend analysis, Test
marketing is also a effective approach for market research.

In order to undertake market research Lovely Linens can undertake different types of
research that is primary research, secondary research, surveys, research through social media and
interviews.
Environmental analysis
Environment can be analysed using the Pestle analysis model, this model involves factors
for environment in which Lovely Linens operate and is willing to operate.
Political
Political environment in which Lovely Linens is operating is political environment of
New Zealand and as well as of European political situations SHTAL and et.al., (2018). This
business is also subject to political environment affecting small and new businesses.
Economical
Economic environment consists of various factors that are cost of operations and
economic condition of the target market of the business. Customers of the business are stores and
this is why economic condition of the target market is favourable. Other than this high NZ dollar
is also affecting cost of Lovely Linens.
Social
This environment consists of customers and their taste. Lovely Linens in this environment needs
to consider changing preferences and trends of customers. This involves both European as well
as New Zealand market. Lovely Linens needs to undertake research for identifying and
understanding taste and preference of customers.
Technological
This environment for Lovely Linens involves technology that is used for creation of the linens.
Business can also utilise marketing technology for marketing and promotion of the business
Nandonde, (2019). This is useful when business is planning to extend its operations.
Legal

Legal environment for Lovely Linens is the one which that is applicable for management and
regulation of the business. This is subject to all regulations that involve customer protection and
all other trade practices.
Environmental
This requires Lovely Linens to adopt environment friendly practices and ensure practices such as
waste management. This also involves using the raw material that is environment friendly and
does not cause any harm to environment.
Competitor analysis
Competitor analysis is an important practice in which Lovely Linen requires to undertake
analysis of those who can affect the business and its profitability. Competitor analysis involves
analysing practices and policies of different competitor, their success factors and what are the
elements that make competitors superior than Lovely Linens Jin, Ji & Gu, (2016). This analysis
will inform Lovely Linens regarding what practices they should undertake to get and sustain
competitive advantage.
In order to analyse competitors Porter’s 5 Model can be utilised. This model involves 5 forces of
competition in an industry. This forces are-
 Threat of New Entry
 Threat of Substitute
 Bargaining power of Buyers
 Bargaining power of Suppliers
 Industry Rivalry
This helps in analysing different forces of competition within an industry. Lovely Linens
operates in textile industry and this is why Lovely Linens require analysing these forces of textile
industry.
Perceptual Mapping is another model that can be used for competitor analysis. Perceptual
mapping is a visual representation of perception of relative competitive alternative Won, Oh &

Choeh, (2018). This visual representation shows the position of the brand, this means application
of this model will show position of Lovely Linens in relation with their competitive alternative.
Figure 1 Perceptual mapping
This involves analysis of different competitive alternatives on the basis of quality and price.
Analysing and identifying adequate and right position is useful for Lovely Linens to identify and
target right market to which it can sell its services.
This model helps in ensuring correct target market for Lovely Linen on the basis of quality of the
brand and price of the products of Lovely Linens.
Market measurements
Market measurement is concerned with measuring performance of the business in their
market. This allows identifying and understanding potential growth in customers, productivity
and profitability Moutinho & Vargas-Sánchez, (2018). Market measurement is also useful for
situational analysis, this means collection of methods through which internal and external
environment of organisation can be analysed. There are several ways through which Lovely
Linens can analyse their performance in marketplace. Some of the ways are-
Identifying customer satisfaction
This is concerned with identifying and understanding level of customer satisfaction.
Current businesses are working on the basis of customers and are customer centred and this is

why identifying and understanding customer satisfaction. High and satisfactory level of customer
satisfaction refers effective performance of Lovely Linens in marketplace. For example, after
every sale Lovely Linens can ask customer to rate their purchase and satisfaction associated with
purchase, this will allow them to understand customer satisfaction. Repeat customers is also an
indicator of high customer satisfaction.
Financial statements of business
This is concerned with looking financial statements and results of the Lovely Linens.
This means that Lovely Linens needs to look at their financial statement, this reflects financial
performance of the business, and this is also an indicator of performance of business in
marketplace. For example, increase in sale of the products of Lovely Linens, increase in
profitability are some of the indicators that reflect performance of Lovely Linens Moutinho &
Vargas-Sánchez, (2018). This means that increased profit is indicator of effective performance of
Lovely Linens in its marketplace.
Acquisition of new customers
This is another way to measure performance of Lovely Linens in marketplace. This means
increasing customers and retention of existing customers is another way to analyse performance
of Lovely Linens in marketplace. For example, Lovely Linens can identify and compare existing
its projected growth in customers with actual growth in customers to identify effectiveness of
performance of Lovely Linens.
Productivity and profitability analysis
Productivity and profitability analysis is concerned with analysing productivity of Lovely
Linens and its profitability Fritsch & Changoluisa, (2017). Productivity analysis helps in
identifying and understanding effectiveness of the production system and profitability analysis
on the other hand helps in identifying and understanding financial soundness of the Lovely
Linens. Concerned with these two elements it can be said that Lovely Linens has managed to
earn well in early stage of the business and this was confirmed to them by their accountant.
However, this started well with starting of their business and when they started to look for
suppliers who can supply them high quality fabric at good price. Another example that is suitable
for productivity analysis of Lovely Linens. Concerned with this it can be said that Lovely Linens

when was asked to supply duvet covers, even as new business and having limitation in pillow
cases they did not refused and agreed to supply duvet covers. Emma and Flossy to supply duvet
covers quickly learnt how they can design and make duvet covers. This reflects their efficiency
related to productivity and production. These are two examples that are related to productivity
and profitability analysis of Lovely Linens and these suggests that Lovely Linens is effective in
managing both.
Target market
On the basis of information and data gathered and analysed in above it can be considered
that target market for Lovely Linens is customers who are looking for quality linen with
attractive designs Thao & Duong, (2019). This can be considered as one segment of the market
on the basis of psychological segmentation, another segment that has been targeted by Lovely
Linens is business and stores selling linen. This has been considered as target market because it
reduces efforts to sell directly and Lovely Linens can focus on improving quality and increasing
varieties in design and focus on other aspects of the business as well. On the basis of this
target market identified promotional objectives of Lovely Linens can be-
 Communicating to rights audience that is interested in buying quality linen
 Attracting customers to right place for buying linen
 Increasing new customers and increasing demand from existing customers
Promotions play effective role in success of the businesses and this is why it is very important
that Lovely Linens develop effective campaign for its promotion that can contribute in attaining
its promotional objectives. Two promotional mix campaign that can contribute in achieving these
objectives are-
Campaign through direct marketing
This is concerned with promotion of the product and brand through internet and social
media platforms Kotler and et.al., (2017). This is useful for its international promotion and is
also less costly compared to other means.
Campaign through Advertising

This is another way Lovely Linens can promote this is useful for promoting in New Zealand.
Magazines, radio and television campaign are part of this campaign.
CONCLUSION
On the basis of above discussion and analysis it can be concluded that Lovely Linens
even after being a new business is dong effective work. This way company has managed to
establish it strong in competition and is providing qualitative linen. On the basis of market
measurement it can be concluded that Lovely Linens has managed to generate good return
financially and as well as in customer generation and customer satisfaction. Lovely Linens with
help of its quality products managed to attract customers.

REFERENCES
Books and Journals
Fritsch, M., & Changoluisa, J. (2017). New business formation and the productivity of
manufacturing incumbents: Effects and mechanisms. Journal of Business
Venturing. 32(3). 237-259.
Jin, J., Ji, P., & Gu, R. (2016). Identifying comparative customer requirements from product
online reviews for competitor analysis. Engineering Applications of Artificial
Intelligence. 49. 61-73.
Jones, D. (2019). Entrepreneurship and Financial Institutions Market Analysis. International
Journal of Management. 10(4).
Kotler, P and et.al., (2017). Principles of Marketing 7th Europian Edition.
Moutinho, L., & Vargas-Sánchez, A. (2018). New performance measurements. Strategic
Management in Tourism, CABI Tourism Texts. 212.
Nandonde, F. A. (2019). A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). 54-61.
SHTAL, T. V and et.al., (2018). Methods of analysis of the external environment of business
activities. Revista ESPACIOS. 39(12).
Thao, N. X., & Duong, T. T. T. (2019). Selecting target market by similar measures in interval
intuitionistic fuzzy set. Technological and Economic Development of Economy. 25(5).
934-950.
Won, E. J., Oh, Y. K., & Choeh, J. Y. (2018). Perceptual mapping based on web search queries
and consumer forum comments. International Journal of Market Research, 60(4), 394-
407.