Strategic analysis of a company and its competitive environment Essay - 4

Strategic analysis of a company and its competitive environment - Essay Example External Business Environment Analysis Macro Environment PESTLE analysis of UK can be used in order to understand the macro-environment of UK that is influencing the dimension of food retailing industry of UK. Political In recent years, UK government has decreased spending on retail industry in terms of cut in subsidy and putting addition fair price burden on food retailers. On the other hand, UK governments’ decision of reducing corporate tax to 22% has helped food and other retailers to save additional amount of money from operation (Verdict Research, 2013). Economic Consideration of research report of Nicholson (2011) and Verdict Research (2013) reveals the GDP growth of UK was less than 0.1% while unemployment rate was close to 8% in recent years and due to ongoing economic crisis, consumer spending on retail food items has also been decreased by close to 3%. From economic perspective, food retailers are facing inflationary pressure which is decreasing their scope to avoid rising price of food retail merchandises. Social According to Verdict Research (2013), UK customers are showing the demand for healthy and more nutritional food choices in recent years due to increased health awareness and change in life style. On the other hand, demand for online retailing has also been increased among youth and teenagers and working professionals. Therefore, food retail chains have the option to invest resources in developing online distribution channel in order to cater demand of young customer segments. Technology Nicholson (2011) reported that most of food retailers are banking on latest technologies such as RFID, electronic data exchange, ERP, Big Data analytics in order to not only speed up the value chain process but also understand customer purchasing behaviour. Environment UK government has already advised large scale retailers (including food, grocery, clothing etc) to reduce carbon emission by 20% in the value chain within 2015 and due to such regulator y pressure, food retailing companies are also adopting the concept of green supply chain model to reduce carbon emission in the value chain (Verdict Research, 2013). Legal In UK, European Union labour law are being followed food retailers in order to handle human resource and labour related issues while Food Safety Act, 1990 is being used in the country to ensure control of quality in offered food items (Food Law Practice Guidance, 2012). . Business Trend Consideration of the report of Nicholson (2011) reveals the fact that UK food and drink retailing segment has been under consistent pressure for last three years due to intertwined factors like the banking crisis which decreases access to funds for retailers, decrease in household food retail expenditure due to ongoing economic crisis, marginalization of consumer spending on food retail items, rise of unemployment rate in the country etc. Due to conjoint negative impact of the mentioned factors, growth of UK food retail segment has been slumped for last few years. Such downturn can be depicted in the following manner; Figure 1: UK Food Retailing Expenditure Growth Trend (Source: Verdict Research, 2013) It is evident from the above diagram that consumer spending on retail food items has been decreased or remained flat for last three years in UK. Verdict Research (2013) reported that volume growth for food & grocery retailing was only 0.1% in UK and