Analysis of House of Fraser: Internal and External Factors with SWOT

This report presents a SWOT analysis of House of Fraser, examining the company's strengths, weaknesses, opportunities, and threats. The analysis delves into factors such as human resource management, accounting and finance, and marketing, highlighting key issues like workforce reduction, financial losses, and the need for technological adaptation in the changing retail landscape. The report identifies the company's established brand image and experience, while also pointing out weaknesses like website maintenance and inability to address current market trends. Recommendations include understanding economic limitations, providing employee training, and considering mergers with successful e-commerce businesses to navigate market challenges and ensure future growth. This assignment, contributed by a student, is available on Desklib, a platform providing AI-based study tools.

Running head: BUSINESS MANAGEMENT
BUSINESS MANAGEMENT
Name of the university
Name of the student
Author note

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Executive summery
This assignment intends to analyse House of Fraser’s internal and external factors, which are
affecting their business. Following a general theory of SWOT framework, a SWOT analysis
has been performed on the company, House of Fraser. Based on which, key issues have been
identified and necessary measures have been suggested.

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Table of Contents
Question 1: SWOT analysis theory................................................................................3
Question 2: SWOT analysis of House of Fraser............................................................3
Question 3: Identified issues..........................................................................................5
Question 4: Recommendation........................................................................................6
References......................................................................................................................7

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Question 1: SWOT analysis theory
SWOT is acronym for strengths, weakness, opportunities and threats. This framework
is useful for finding an organisation’s strength and weakness, which are internal factors,
before entering into a new venture or finding strategies for future growth and competitive
edge. Entrepreneurs depend on SWOT analysis to discover external factors like new
opportunities and address existing threats to find ways to eliminate them from system as well.
SWOT is essential as finding strengths of the organisation will disclose existing opportunities
and create chances to explore them. Further, an understanding of weakness of business
organisation helps to manage and recover from market threats.
Various organisational issues with HRM, workplace culture, financial drawbacks,
inefficient operation and marketing strategies are addressed during a Swot analysis. It helps
an organisation to understand how to explore new opportunities, respond to market trends,
plan strategically to combat competition and make use of new technology for betterment.
Question 2: SWOT analysis of House of Fraser
Strengths Weakness Opportunities Threats
Human
resource
management
The
organisation
has
experience of
managing a
huge strength
of human
resource at a
time.
People are
happy
working with
their terms
and benefits.
HR department
is
responsible
 As per their
rescue plan,
the
company
needs to
move out of
its head
office in
London,
which
assures a
threat to 200
job profiles.
 Company is
expected to
close stores
even if a
 Job
opportunities
will be
available if
they recruit
staffs for M-
commerce
and e-
commerce
sites.
 National
officer of
shop workers
union
initiated
urgent talks
with retailers
 As house of
Fraser is on
the verge of
closing more
than 50% of
their stores in
UK for Brexit
related
uncertain
market, at
least 11,000
jobs are under
potential risk.
 Company
gave notice
for appointing
administrators

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and highly
responsive at
time of
crisis.
buyer comes
at the last
moment.
for
investigating
on the case
of losing
jobs and
necessary
measures
against it.
and for this,
no less than
5000 more
jobs will be
facing risk.
 Regular calls
from
employees
are coming
regarding
their
insecurity.
Accounting
and finance
Home ground
based DIY
branches are
on the verge
of closing up
to 60 stores
after rescued
a little
amount.
The store chain
is thinking of
rent
reduction by
30% on
various
stores under
CV
agreement.
 As per
Kant Hvass
(2014), the
Brexit has
affected
value of
pound and
for this
retailers
are facing a
hard time
pushing up
product
cost.
Company is
running at
loss of
40%.
C Banner is
going to be
51%
stakeholders
of HOF,
leaving the
owner with a
minor
proportion.
 Company
voluntary
agreement
needs consent
of ¾ of the
creditors in
order to cut
down rent
expense by
25% (Butler,
2018).
 Virtual
marketing and
selling
products
online
demands
heavy
investment on
IT
infrastructure
and delivery
network.
Marketing Company has
an
established
brand image,
over 60 years
of
experience in
business.
 The
company
has admitted
their mistake
with
websites
while giving
a
presentation
to investors.
 As retail
industry is
going
through a
change,
HOF needs
to adapt with
the trends in
order to
thrive with
 Shoppers
have resisted
themselves
spending on
clothes and
household
goods and
shifting
expenses
from renting

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dynamic
business
environment.
to owning
homes.
Question 3: Identified issues
House of Fraser currently dealing with issues as follows.
 According to a report by (bbc.co.uk, 2018), to maintain huge workforce, stores and
satisfy buyers while working on a rescue plan.
 Heavy investment on IT infrastructure and maintenance in a disturbing economic
environment of country.
 Lack of soft skills regarding maintenance of websites and inability to understand
ever-changing market trend.
Although, the company has been operating in market for no less than 60 years, they
have failed to address current market trend. Therefore, issues with marketing have emerged.
Simultaneously, due to Brexit policy and decreased value of Pound the product cost cannot
be increased. Retailers have to deal with changed customer behaviour and loss of both the
capital and human resources. According to the contemporary situation if HOF does not invest
a huge amount on IT infrastructure and establishment of delivery network it will be difficult
to sustain in the market.
Question 4: Recommendation
 While working a rescue plan, professionals need to understand the economic
limitations before framing the plan of improvement.
 According to Piotrowicz and Cuthbertson (2014), without recruiting new employees,
necessary trainings regarding new operational methods and technological aspects, can

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be arranged offering low wages until the recovery. Losing job is better than serving
the company in crisis.
 Employees must be engaged in detail market research to understand emerging trends.
 In order to recover company can think for merging with other successful e-commerce
business units.

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References
bbc.co.uk (2018). House of Fraser to close 31 stores. [online] BBC News. Available at:
https://www.bbc.co.uk/news/business-44394948 [Accessed 1 Nov. 2018].
Butler, S. (2018). Date set for legal challenge by House of Fraser landlords. [online] the
Guardian. Available at: https://www.theguardian.com/business/2018/aug/02/date-set-for-
legal-challenge-by-house-of-fraser-landlords [Accessed 1 Nov. 2018].
Kant Hvass, K., 2014. Post-retail responsibility of garments–a fashion industry
perspective. Journal of Fashion Marketing and Management, 18(4), pp.413-430.
Piotrowicz, W. and Cuthbertson, R., 2014. Introduction to the special issue information
technology in retail: Toward omnichannel retailing. International Journal of Electronic
Commerce, 18(4), pp.5-16.