Task: Case Study The Organic Retailer' - Essay Example

The organizations now needs to keep simultaneous balance between multiple forces like technology, market, product and geography that has resulted because of extending the presence of the firm all over the globe for a number of purposes and in number of forms. Hence expansion is considered as a decision that has gained huge strategic significance (Luo, 1999). The expansion strategy is largely affected by a number of factors both internal and external. The success of the firm going for expansion depends upon its understanding of the situation and the firm designs its strategy accordingly (OECD, 1998).

Here is the case of a retail chain named ‘The Organic Retailer’ dealing in organic cotton that has three clothing shops in London. The retailer is looking for expanding the business and is backed by the investor who has invested 5 million pound in the business and has got 20% stake in it. This study focuses on the competitive and general environment of the company and decides on strategic options available for the company. 2. PESTLE Analysis By PESTLE Analysis the macro-environmental forces are identified that recognize the forces that may currently affect the business or will be affecting in future (Allen, 2001; Stationery Office, 2010).

By conducting the PESTLE analysis The Retail Shop will gain a clear insight about the macro-environmental factors that are acting in the market of UK, which in turn will help the company to decide in whether to go with the expansion in UK or any other part. The PESTLE Analysis is shown in the table below. Table 1: PESTLE Analysis POLITICAL In United Kingdom (UK) the chief of the state is Queen Elizabeth II. The government type is of Commonwealth realm and constitutional monarchy (CIA, 2013a).

A number of government backed schemes are designed in order to assist the Small and medium Scale enterprise to access finance be it in form of grants or loans (BBC News, 2011). Soil association Certification is the leading organic product certifier of UK. According to them the textile licensee has recorded a growth of 2% and reached ?12 million (Soil Association, 2012). It can be concluded that the government of UK is seen to take initiatives to encourage the retailers to include organic cotton in their business (Smithers, 2012).

ECONOMIC UK is the second largest economy in Europe after Germany. It is leading financial centre and has a huge trading power. In the past few years the Government has reduced the public ownership and has taken initiative that may lead to growth in the social welfare programs. In the year 2012 the submissive business investment and the low consumer spending weighed on the economy. The budget deficit was significantly high at 7.7% of the GDP and the GDP fell by 0.1% (CIA, 2013a). The current GDP is 36,700 as on 2012 and the percentage of unemployment as on 2012 is 7.

8% (CIA, 2013a). The household income or consumption by percentage is highest 10% is 28.5% and lowest 10% is 2.1% (CIA, 2013a). SOCIAL The ethnic group of UK comprised of mainly white people with very little percentage of black, Pakistani, Indians and other mixed groups. Majority of the population is between the age group of 20 to 50 years (See figure 1) (CIA, 2013b). The average household income of the people of UK was seen to fall during the period 2010-11. The median income was seen to fall from ?542 to ?511 that is by 3.

1% whereas the mean