Business Environmental Analysis: Macro Factors Impact on Sports Direct

This report provides a comprehensive business environmental analysis of Sports Direct, encompassing both macro and micro factors. It begins with an introduction outlining the scope of the study, including a SWOT analysis. The report delves into the impact of macro-environmental factors, such as political, economic, social, technological, legal, and environmental influences, explaining their positive and negative impacts on the business. A detailed SWOT analysis of Sports Direct is presented, highlighting its strengths (e.g., brand image, low staff turnover) and weaknesses (e.g., high competition, limited product range), as well as opportunities (e.g., globalization, positive consumer behavior) and threats (e.g., changes in tax policy, technological advancements). The interrelationship between macro factors and the company's strengths and weaknesses is then explored, providing insights into how external factors influence internal capabilities. The report concludes by emphasizing the significant interrelationship between macro and micro elements and the importance of strategic adaptation for sustained profitability. References include sources such as Van der Wagen and White (2018), and Micelotta, Washington, and Docekalova (2018).

Business Environmental Analysis

 Study will include SWOT analyses of Sport direct.
 It will describe relationship between internal and external factors.
Introduction

Factor Explanation of
impact
Positive/ negative
Political factor Political element impact
on business
performance and
profitability. Instable
government enhance
risk and may reduce
sales of the company in
the country.
P: Political stability
helps in enhancing
trade and exports
Positive trade regulation
helps in smooth
functioning of entity
and raising profit.
N: instable government
creates issue in survival
of Sports Direct
Increasing tax rates
reduces profit of entity.
P4 Impact of macro environmental factors

Economic factor Inflation rate, interest,
exchange, employment
rate impact on the
organisation.
P- High employment rate
helps in improving income
sources for consumers,
that positive affect
spending power of
customers. This impacts
positive on Sports Direct
Positive economic
situation and high value of
current helps in increasing
demand of consumers.
N- if inflation is high then
it will negatively affect
buying power of
population that ultimately
decreases sales of entity.
Cont..

Social factor Taste, culture,
demographic features,
attitude of consumers
impact on sustainability
and profitability of
company
P-highly educated
people are aware
towards their health
that increases their
demand towards sport
items. Thus, it helps in
raising demand of
consumers in country.
Today interest towards
leisure is increasing that
increases sales of the
firm.
N- Cultural barriers or
difference create
negative impact on
Sports Direct
Falling education
Cont..

Technological Technological transformation
sometimes disrupts the industry or
sometimes improves its efficiency.
P- recent technologies support
Sports Direct. In developing the
sport equipments, by this way entity
can offer many products to
consumers. This helps in increasing
revenue of business unit
N- this enhances cost of business that
reduces net profit.
Legal Regulations, policies affect overall
working of business to great extent.
P-discrimination law, employment law
helps in smooth functioning of Sports
Direct. Copyright act aids in protecting
the unique image of entity.
N- Changes in regulation force Sports
Direct to make changes in its practices
that affect operational efficiency, if
working hours gets increased by
government then it will enhance staff
turnover in the organisation.
Cont..

Environmental It is essential for Sports
Direct. That to maintain
environmental standards
for sustaining in market
for longer duration
otherwise it may
negatively affect
business unit.
P- Waste management
helps in minimising cost
and fulfilling corporate
social responsibility of
Sports Direct. That
develops positive brand
image.
N-climate changes
reduces interest of
consumers that
decreases demand of
sports equipment thus, it
negatively impact on
company
Cont..

Sports Direct Foot Locker
Strength  Trusted brand and strong
brand image
 Low staff turnover
 Successful track record
 Effective investment
strategy, High return over
capital investment
Weakness  High competition
 Low margin of profit thus,
sustainability of company
on doubt
 Product range is limited
 Poor marketing strategies
Opportunities  Globalisation
 Positive behaviour of
consumers towards health
 Stable free cash flow is
opportunity for the
organisation.
 Globalisation
Threats  Changes in tax policy
 Technological
advancement increases
risk
 Changing buying
behaviour
 Changes in trade laws
P5 Internal, external analyses

Finding From the above analyses it
can be said that Sports
Direct is able to retain its
skilled employees in
business for longer duration,
this would help in expanding
operations and offering
satisfactory goods and
services to consumers.
Company generate high
return over its investment
that helps business in
sustaining in market for
longer duration.
Findings

Sports Direct Link with macro factor
Strength: Low staff turnover Government has made effective employment law that is
followed by the company that aids in satisfying
employees and offering them correct atmosphere. That is
why entity has become able to retain its skilled
employees in Sports Direct for longer duration. If legal
norms get changed then it will negatively affect
performance of enterprise.
Weakness-high competition Due to high competitor consumers taste and preference
get changed, they change their mind if competitors offer
them additional facilities. This is inter-link to social
factor.
P6 Interrelationship between macro factor and strength
or weakness of business

Foot Locker Link with macro factor
Strength- High return over investment This is link with economic factor, as if economic
condition of nation is good then it will help in
investing more and gaining more return over it.
But it economic condition gets negative then it
will adversely affect Foot Locker.
Weakness- poor marketing It is link with social factor, as consumers can
change their mind any time and preference of
customers also gets influence. Thus, if entity fails
to market its product properly then it would not
be able to attract more consumers towards brand.
This will impact on sustainability of business.
Cont..

 From the above study it can be concluded that macro factors have high
interrelationship with micro elements.
 This relationship have significant impact on company.
 Thus, entity should make effective strategies to deal with issues and raising
profitability of the firm.
CONCLUSION