Business Environment Analysis Report: The Warehouse Group (TWG)

This report provides an environmental analysis of The Warehouse Group (TWG), a major retail group in New Zealand, founded by Stephen Tindall. The analysis employs both SWOT and PESTLE frameworks. The SWOT analysis assesses the company's strengths (reputation, customer base, cost leadership), weaknesses (brand awareness, product differentiation), opportunities (expansion, digital marketing, mergers), and threats (competition, government policies, rising costs). The PESTLE analysis examines the political (stable democracy, low corruption), economic (favorable inflation, stable interest rates), social (cultural diversity), technological (efficient systems, innovation), environmental (favorable climate, environmental concerns), and legal (strong justice system, minimum wage, Employment Relations Act, Companies Act) factors influencing the business. References to relevant legislation are also included.

Running head: ENVIRONMENTAL ANALYSIS
ENVIRONMENTAL ANALYSIS
Name of the Student
Name of the University
Author Note

1ENVIRONMENTAL ANALYSIS
Introduction
Environmental analysis refers to a strategic tool that helps in identifying all the internal
and external factors affecting an organization. TWG or The Warehouse Group was founded by
Stephen Tindall in Auckland in the year 1982. It is one of the largest retail groups in New
Zealand.
SWOT Analysis
The SWOT analysis is used in order to determine the internal and external environment
of the organization. It involves assessing the strengths, weaknesses, opportunities, and threats
and thereafter, developing appropriate strategies.
Strengths –
i. The Warehouse Group is a very reputed retail store, and it is one of the largest
in the country.
ii. The company has a wide knowledge of the retail industry.
iii. It has a huge customer base.
iv. It has a steady cash flow. In addition to this, it also a cost leadership strategy
that helps in reducing cost and increasing profitability.
Weaknesses –
i. Brand awareness is one of the major weaknesses of the company. If compared to
Walmart or Kmart retail stores, this group is lagging behind in brand awareness.
ii. Labor cost is higher in comparison to the other organizations.
iii. There is little differentiation between the products and services.

2ENVIRONMENTAL ANALYSIS
Opportunities –
i. The company can expand its business more in various other areas.
ii. It has the opportunity to increase its brand awareness through digital marketing.
iii. The company can take advantage of the growing population and international
trade in order to increase its market share.
iv. It can enter into mergers and acquisitions with leading companies in both
domestic and global markets.
Threats –
i. Presence of intense competition.
ii. Government restrictions and policies.
iii. An increase in the price of raw materials and increasing labor costs will increase
the operational cost.
iv. Influence of the trade unions can also affect the business
PESTLE Analysis
PESTLE Analysis is also called as the macro environment analysis that helps in assessing
the political, economic, social, technological, legal, and environmental factors of the area where
the business is operating.
Political -
i. New Zealand is a mixture of parliamentary democracy and constitutional
monarchy.
ii. It is politically stable.

3ENVIRONMENTAL ANALYSIS
iii. It is one of the middle power countries in the world.
iv. It has a low corruption rate.
Economic-
i. The inflation rate in New Zealand has been favorable for the retail business.
ii. The economy has stable interest rates and helps the business in getting low-cost
finances.
iii. The country has a mixed economy that supports free trade policy.
iv. It is a very developed nation having stable finances and welcomes foreign direct
investment.
Social-
i. New Zealand is a culturally diversified country.
ii. Christianity is a major religion, and the major languages are English and Maori.
iii. The country also comprises of different social classes with diversified
demographic characteristics.
Technological-
i. Prevalence of efficient transport, communication, and networking systems.
ii. The country has a diversified tech sector.
iii. A higher degree of innovation, creativity, research, and development is available
in the country.
Environmental-

4ENVIRONMENTAL ANALYSIS
i. The climatic condition is favorable for agriculture. However, there are some
places having the poor climatic condition.
ii. It is one of the top holiday destinations in the world.
iii. The country is concerned about various environmental factors like habitat loss,
pollution, deforestation, and so on.
Legal-
i. The country has a strong system of justice.
ii. The country sets a minimum wage policy for all the businesses.
iii. Liberalized regulations providing the freedom to do business
iv. Acts like the Employment Relation Act and Companies Act are required to be
followed by the businesses.
Employment Relations Act, 2000 –
The Employment Relations Act, 2000, provides the foundation for the management of
employees across New Zealand (Rasmussen, Brey & Stewart, 2019). According to this, the
organization needs to ensure a positive employment relationship by incorporating a clean, safe,
friendly, and faithful working environment.
Companies Act 2015 –
It is an amendment of the Companies Act 1993, through which the organization can go
for registration, provide for disclosure requirements and reporting, manage stakeholders,
restructure itself as well as dissolve itself (Kathuria & Bansal, 2016). The organization needs to
be transparent in terms of all documentation.

5ENVIRONMENTAL ANALYSIS
References
Kathuria, D., & Bansal, M. (2016). Recasting of companies act, 1956 companies act 2013 &
companies amendment act 2015. International Journal in Management & Social Science,
4(1), 376-380.
Rasmussen, E., Bray, M., & Stewart, A. (2019). What is distinctive about New Zealand’s
employment relations act 2000?. Labour & industry: a journal of the social and
economic relations of work, 29(1), 52-73.