Analyzing the Business Environment of Rellik (London)

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Business Environment
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Table of Contents
Introduction......................................................................................................................................3
Business and purposes.....................................................................................................................3
Discussion of different types of businesses and their purposes...................................................3
Stakeholder mapping.......................................................................................................................5
Discussion of the extent in which a business organization fulfills its different stakeholder’s
objectives.....................................................................................................................................5
Macro and micro industry analysis..................................................................................................7
PESTEL analysis.........................................................................................................................7
Five forces analysis......................................................................................................................9
Recommendations............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
The term business environment refers to the external and internal environments of a business. By
analyzing the business environment and organization is able to create a realistic plan and
understand how to implement it successfully (Prajogo 2016). In order to identify the strength and
weakness of an organization a vast research on the business environment is crucial. However, the
business environment is dynamic in nature. Such ever evolving environment allows the
businesses to experience the new technology, changing behavior of the customers and market
segmentation. Analysis of environmental factors is significant for a business to understand its
stakeholder objectives and meet them effectively. This study deals with the different business
organizations and their purposes. Moreover, the impact of macro and micro environment on the
decision making process of stakeholders are also analyzed in this section.
Business and purposes
Discussion of different types of businesses and their purposes
The business industry is classified into three major categories include private, public and
voluntary organization. Every business has specific objectives based on its nature (Bahand Fang
2015). In this study NHS has been taken as a public sector, Oasis Charitable Trust as the
voluntary sector and Rellik as a private sector. The differences of the purposes of these three
organizations are mentioned below:
Types of businesses Purposes
NHS –Public sector NHS is a national health service provider
established in UK. It has many branches across
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UK. This organization is responsible for providing
a wide range of emergency healthcare services. The
purpose of this organization is to deliver
comprehensive services and shape its services
based on the needs of individuals. This healthcare
organization involves in providing free health
checkup and promoting health education across UK
(Nhs.uk 2019). NHS aims to develop a healthy
relationship between the work and health. NHS
seeks profit without compromising with the service
quality.
Oasis Charitable Trust-Voluntary sector This is a UK based Christian registered voluntary
organization providing resident to the homeless
people. The purpose of this organization is to
provide shelter to young homeless people in UK.
On the other hand, this charity involves in
delivering dedication to the deprived children along
with providing a better quality life. This is a non-
profitable organization (Oasisuk.org 2019).
Rellik-Private sector Rellik is a local fashion retailer situated in London
offering a wide range of clothing products and
accessories for the women. The purpose of this
business is to deliver high quality clothing products
and develop a fair relationship with its customers,
employees and suppliers. This organization aims to
acquire maximum returns from its investment. On
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the other hand, Rellik involves in creating ethical
value for their customers (Rellik 2019).
Stakeholder mapping
Discussion of the extent in which a business organization fulfills its different stakeholder’s
objectives
Stakeholders are the core area of a business. In order to increase the productivity of an
organization the management needs to build a healthy relationship with its stakeholders.
However, different stakeholders have different perspectives, which often create complexity in a
business (Andriofand Waddock 2017). The major stakeholders of a business include
government, customers, employees and shareholders. Such stakeholders have different objectives
based on their interest in a business.
Government
The government is a major player of any business, which either hinders or fosters the business
activities (Moraand Majid 2018). The UK government aims to ensure that every business should
follow the government rules like taxation, protection of consumer right, standardization and
licensing. In the context of Rellik, the management can meet these requirements by complying
with the government laws associated with their business.
Employees
Employees are the strength of an organization and they have direct influence on the profit of the
organization (Andriofand Waddock 2017). The employees are involved in day to day operation
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of Rellikthus; they are closely associated with the profit or loss of this organization. Employees
seek job security, self-actualization, motivation and remuneration in returns of their service. If an
organization fails to meet employee needs then the productivity will be hampered. By providing
job security, good compensation and training Rellic will be able to meet its employee objectives.
At present Rellik introduced employee share scheme plan and Christmas benefits for the
employees, which motivates its employees along with increasing their performance.
Shareholders
Shareholders are the backbone of a company as they boost the financial resources (Moraand
Majid 2018). The objectives of shareholders are not limited in an organization. They aim to gain
equal profit and value from a business. In the context of Rellik it has three partners and each has
equal share in this business. The management needs to care about its partner’s value by creating
effective communication with them. In order to meet the objectives of the shareholders the
management of Rellik influences all the partners to involve in the decision-making process of the
organization. Therefore, each partner has established a good interpersonal relationship with
another, which enables them to take strategic decision to meet organizational objectives.
Customers
Customers are the major stakeholder of a business. They keep the flow of a business by
purchasing products and subscribing to its service (Plouffeet al. 2016). They are the vital player
of a business. To enhance the growth of a business, an organization needs to give value to its
customers otherwise the sales will be affected. Making a good relationship with the customers
helps Rellik to boost its brand image customer loyalty along with increasing the revenue. Every
customer seeks value for their money through fair price, quality product, good customer care and
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reliable service. In order to maximize the customer experience Rellik has introduced customer
loyalty program, which adds value to their customer. Therefore, they offers seasonal and festive
discount, which increase the confidence level of the customers. Offering special discount on bulk
product purchase increases the purchasing power of customers in the context of Rellik. In order
to create a fair relation with the customers after sale service is crucial. For this reason, Rellik
allows its customers to solve any product related issue via its website as their customer support
executives are available for 24/7.
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Macro and micro industry analysis
PESTEL analysis
Political
UK government policy has a great impact on the fashion industry. However, UK government
lowers the corporation tax, which brings opportunity for the business owners to boost their
economy (Nurmiand Niemelä 2018). In the context of Rellik, such low rate of corporation tax
allows them to stimulate its strategic planning and economic activity. However, there is no
guaranty about the stability of such taxation as changes in Government may change the current
policy, which will bring threat for UK fashion industry in near future. On the other hand, UK
government encourages the fashion organizations to purchase fabric locally, which adds value to
the fashion industry. Moreover, the stable political condition of UK creates a safe market for
Rellik in this country.
Economic
The economic recession between 2007- 2008 left a great impact on UK economy, which is still
not recovered completely (Panet al. 2018). However, in 2010-2012 the GDP has grown by 1.8%.
This brings opportunity for Rellik to expand its business in UK market. Nowadays, the
unemployment rate is reduced in UK, which adds value to the business industry. Less
unemployment rate increases the purchasing power of consumer, which boosts the sales of
Rellik. Besides these opportunities there is great impact of recession on UK business, which is
still hindering the growth of Rellik in this country.
Social
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There are significant cultural and social changes in UK, which leave a great impact on the
business operation of fashion industry like Rellik. The fashion industry is considered as the
socio-cultural industry thus the changes in social and cultural change has a great influence on it
(Kara 2018). One of the major issues of UK fashion market is the aging population. This brings
both opportunity and threat for Rellik. However, Rellik has the scope to increase its customer
number by offering products, which suit to the aging population. On the other hand, Majority of
UK is aging people, which lowers the purchasing power of the customers. Maximum people are
working, which brings a great opportunity forRellik. Therefore, the young generation has strong
sense of fashion, which increasestheir purchasing power of the customers. However, fashion
industry is based on the changing trend, which often creates challenge for the fashion retailers.
Rellik needs to cope with the changing behavior of the customers, which may create a big threat
for their business.
Technological
UK is a technologically advanced country. There is little confusion about the transformation of
new technology in UK retail industry. Changes made in communication process by increasing
the customer experience (Hamidet al. 2019). The key technological development allows the
fashion organization to develop online business model. In the context of Rellik digital disruption
allows this organization to improve its communication technology and customer support process.
The customers accept online shopping rapidly in both retail and other markets. This brings a big
scope of Rellik to expand its sales and cover a large number of customers. Hence, it can be said
that technological development in is a big scope for the Rellik to expand its business in UK
market by incorporating new technology.
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Environmental
The physical environment creates issue for the firm that operating in a market. It is important for
every organization to deal with the environmental norms to avoid legal obligation. One of the
most important is to reduction of the carbon foot print from the environment (Panet al. 2018).
Rellik has taken initiative for recycling the waste to reduce its impact from the environment.
However, the UK government policy forces the organization to reduce its impact from the
environment. Rellik focuses on waste management technique to develop an environmentally
friendly business.
Legal
Legal policies should be followed by each UK business to enhance their business. In order to
operate in UK market the business organization needs to comply with the legal norms otherwise
it may face legal obligation (Kara 2018).Rellik complies all the legal norms that facilitate its
business according to the legal rules. They focus on developing employ right in their business,
which enables them to maximize the performance.
Five forces analysis
Five forces as introduced by Michael Porter is basically a framework to understand competitive
forces at the workplace in a specific industry. This framework drives a way in which economic
value can be divided among the industry actors. five forces can help to explain and understand
the industry of customers interest, identify less attractive and attractive markets, recognise risks
and opportunities, explain the ways in which prophets can be distributed in the industry as well
as extrapolate the industrial trends and anticipate the changing trends.
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Bargaining power of buyers:Whenever buyers become powerful the profits are usually lower.
Power of buyers can lead in lowering the prices and having increased caused by additive services
quantity and features for selling them. Whenever sellers have extreme power over the buyers
then opportunities can automatically merge for the Rivals and competitors (Bah, and Fang,
2015). Bargaining power is basically exercised negotiations and through the purchase decisions
that the customers make. the factors which influence bargaining power includes switching costs
of the seller, product differentiation, information availability to buyers, network effects and
power of the distribution channels. Considering the company Relliks of London buyers
bargaining power must be high as it has to minicomputers over London.
Suppliers bargaining power: Whenever suppliers tends to be powerful they can generate large
emergence of profit then the organisation which integrates inputs of different supplier for selling
to end customers. Other vendors can make huge profit when there are too many suppliers in the
market. In the industry of retail specifically in UK and London there is no lack of suppliers and
therefore bargaining power of the suppliers is quite low over here. Some factors which determine
buying power of suppliers include switching barriers of customers, industry and patent standards,
brand equity, competition, strength of the distribution channels and buyer vs supplier
concentration.
Threat of new entrants: In case of Relliks of London this is quite high as every new day there
emerges a new entrepreneur in London specifically in the Retail Industry. Since it has not got
that much power and hold over the market of retail in London therefore it will be having rate of
the new entries in the market.
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Threat of the substitute products and services: In London no product is less than the other and
this makes perfect substitutes in a perfectly competitive market. Threat of substituents is
generally high for London specifically in the selling of garments and apparels(Bah, and Fang,
2015). Clearly, if a customer will not be satisfied with the products and services by Relliks then
he or she will definitely switch on to some other retailer.
Rivalry among the existing competitors: Several local fashion retailers exist in London such as
the Mercantile London, Liberty London, Matches Fashion and many more.This increases the
competition among them and therefore a high competitive market exist forRelliks to operate in
London. It has to come up with this fashion business by selling something new to the customers
are pleasing them with their exclusive Customer services.
SWOT analysis
Strength
 Wide variety of collections
 Reasonable price
 Strong customer base
Opportunities
 Scope for market expansion
 Product diversification
Weakness
 Poor communication strategy
 High operating cost
Threat
 Huge competition
 Threat of alternate product
From the given table it has been found that pricing strategy, huge variety of products and strong
customer base of Rellik lead it to develop a good position in the market. On the other the
interpersonal relationship between the employees is not good, which creates issue for this
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