Contents Overview of the Company 3 PEST Analysis 3 Political 3 Economic 4 Social 5 Technological 6 Five Forces Analysis 6 Competitive Rivalry 6 The Power of Suppliers 7 The power of buyers 7 The threat of substitutes 7 The threat of entry 7 References 8 Overview of the Company N brown Group Plc is one of the key market players in e-based home-shopping retailing industry…
The company captures its target population by segmenting the whole in to two major groups: under-50 target group and 50 plus target group. The products that N brown Group Plc offers include ladieswear, footwear, menswear, and home & Leisure with their respective revenue percentages of 48%, 11%, 13% and 28% (N Brown Group Plc 2012). Over 50% of the total sales are earned through the online retailing procedures including 16% online sales increase attributable to the year 2012. In order to take an investment decision, there are a number of factors other than or complementary to the profitability and financial position of the company to be considered. These issues are related to the environment that the company is operating in and the industry that it is working under. This paper, hence, aims at providing an environmental and industry analyses of N Brown Group plc using PEST analysis and porter’s five forces as tools. PEST Analysis Political The free trade agreements topped up by the globalized economy has led N Brown Group Plc to spread and strengthen its business in countries including both developed and developing countries. The share of its suppliers categorized geographically, includes China, India and Bangladesh, Other Asia, UK, EU and Other with 62%, 11%, 7%, 11%, 5% and 4% respectively. Like Marks & Spencer, Tesco and many other retailers, N Brown Group Plc also expanded its operations around the globe. The terrorist attacks and political instability in the developing countries hinder the operations, yet the low cost production and distribution evens out the issues. The company, in order to avail political support and appraisal, follows an Ethical Trading Policy for safe and healthy working environments to the workers in every country of its operations (N Brown Group Plc 2012, p. 21). The employment laws and legal concerns relating to this area are, hence, harmonized to a great extent. Economic The retail industry is highly sensitive to the interest rate fluctuations and economic downturns. The recent recession has made it difficult for the companies to increase their sales growth as the inflation and income growth are both unfavorable to the businesses (N Brown Group Plc, 2012, p. 09). The recent development towards a better economy shows signs of recovery in the economy. The company’s increase in revenues (by 4.8% in 2012), in a slow and downward moving economy, are related to the company’s individual efforts to reduce costs, increase sales and earn consumer confidence. In order to compete over prices and win more customers the company is continuously improving its e-based business environment. The recent financial year saw an increased profitability due to an increase in the online sales. It has been observed that online sales are 25 percent more profitable than telephone orders with reduced costs. As per the changes made in the online shopping database and wit the introduction of ‘my account’ facility, telephone sales have been reduced by 17% compared to the overall increase in the company’s sales (N Brown Group Plc, 2012, p. 11). The economic factors also affect the company when managing the supply chain. The increase of 160% in cotton prices during the year 2011, for instance, with a remarkable increase in ...
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