Seizing Opportunities in the Global Retail Market

Proposed business idea

In the recent era of globalisation, there is high sales volume and growth in the international retail sector and it would be beneficial for the entrepreneurs to develop a successful retail firm which would be provide an opportunity for creating organisational values through successful customer retention. It is effective for the entrepreneurs to start up a retail fir with proper availability of the all the retail products, clothing and accessories, necessity products in daily life of the customers and this would be a successful business for generating profitability and sales volume. The retail organisation is growing at a rapid rate where the customer’s demand for the retail products is also increasing over the years (Wright et al., 2017). It further influences the entrepreneurs to start a retail business with attractive products portfolio and effective strategic planning to create customer’s values. It is also possible for the entrepreneurs to strengthen their employee base as there is efficient workforce where the employees are able to run the business operations efficiently. Moreover, the government’s initiative for the small and medium sized business is also influencing the leader to start up the business and generate profitability in log run. The proposed business idea of opening retail store is effective in the recent era of globalisation, as there are diverse workforce who are talented to run the business operations as well as wide customers as where the leader would be successful to strengthen the customers in long run the aim of the business would be maximise profitability by creating values for all the stakeholders.

The major stakeholders of the retail firm would be the employees, suppliers and distributors as well as the government, mangers, customers and social communities as a whole and apart from that the shareholders are also playing critical role in starting up the business of retail organisation, where it is necessary to have proper investment opportunity in the firm for making more financial resources (Rothaermel, 2016). The objective of the organisations would be to expand the business across the UK and gain high competitive advantage in the retail market of the UK. The proposed business idea is about opening retail organisation, where the organisation can generate financial capital and make the business successful through serving a wide range of customers in long run. The organisation must increase the product stock afro availability of the organisational products in the market so that the customers can access their products as per the needs and preferences. The product portfolio of the firm would be the groceries, daily activities, health and beauty product, furniture and home decorations, kitchen appliances and clothing and accessories, where the customers can get a huge variety of products at the store of the business. Moreover, the business will try to create values for the customers by providing proper assistance and support continuously and opening the retail store at the UK would be an effective business plan, where the organisations can develop proper strategies for establishing the brand and secure future sustainable development.

Evaluation of external business environment

In order to conduct external business analysis and gaining understanding about the UK business circumstances, it is necessary to conduct PEST analysis which in turn helps to understand political stability, economic growth and social development as well as technological advancement in the country which have crucial impacts on the organisational operational activities (Stretton, 2017).

Political:

As per the political factor, there is political stability at the country, where government is cooperative and supportive. The government body provides subsidy to the small and medium sized entrepreneurs to start up their business. Additionally, the international trade affairs are string where the structured tariff and quota as well as international trade agreement are effective for the organisation to run their business successfully across the country (Cosenz, 2017).

Economic:

There is strong economic growth in the UK which is positive influencing factor for the organisations operating in the market. The GDP in the UK in the last year was $2824850 million. And GDP growth rate is between 0.2% and 0.3% which is effective for the organisations to influence their activities and run their firms successfully (Heikkilä, Bouwman and Heikkilä, 2018). Additionally, the inflation rate of the country is 1.81% where the government is successful to reduce the rate of inflation below 2% which is also another positive factor for the organisation to run their activities successfully. According purchasing power parity and personal income are also growing over the years which increase the potential of the customers to spend on their purchase.

Social:

As per the social factors, there is social development in the UK where the government is also cooperative for maximising social enhancement program. The literacy rate is highest in the UK and the people are upgraded with latest technology. The individuals prefer to gather information through online activities and social campaign where the people are actively participating in the society (Ghezzi and Cavallo, 2018).

Technological:

There is technological enhancement in the country, where the organisations are efficient to utilise latest technology and improve creativity and technical innovation in long run. The use of Information and Communication Technology (ICT), ERP, cloud computing and GPS system are increasing which enhance the business operations. Additionally, the organisations try to develop their website and increase e-commerce activities to attract the audiences and influence their purchase decision making behaviour (Cuc and Miina, 2018).

Hereby, as per the PEST analysis, it can be stated that, the UK business environment is suitable for the start up business firms, where the entrepreneurs can utilise the country’s infrastructure and develop suitable technology for running their business efficiently (Muff, Kapalka and Dyllick, 2017).

Competitive analysis

For competitive analysis, it is necessary to apply Porter’s five forces model, through which it is possible to identify the competitive brand operating in the UK market as well as the other threats in the market. The five forces will be evaluated further,

Threat of new entrants:

The threat for the new entrants or the start the business is high, as there are already the established retail companies operating in the market. Thus, it is risky for the new entrant to enter into the UK retail market and operate accordingly (Cuc and Miina, 2018).

Threat of substitute products:

The threat of substitute products is high, due to high presence of competitive brand sin the market that are efficient to manage effective product portfolio in the retail market, which increases the risk for the new entrants to attract the audiences at the market (Cokins, 2017).

Competitive rivalry:

There is intense competitive in the UK retail industry, as the competitive brands are efficient to provide high quality products and retail services. The major competitive brand share such as Tesco, Sainsbury’s, Lidl, Aldi, Wal-Mart and others which also increase the risk factors for the new business to gain market share in future (Ghezzi and Cavallo, 2018).

Bargaining power of the customers:

The bargaining power of the customers is low, though there is other option in the country. Though the switching opportunity for the customers is present in the UK retail sector, the new business aims at provide the retail products at effective price which may attract the customers and make their purchase decision successfully (Cosenz, 2017).

Bargaining power of the suppliers:

The bargaining power of the supplier in the new firm is moderate, as the suppliers have the opportunity to switch the brand due to high presence of other retail firms in the country.

Hereby, there is intense competition in the UK retail market and it is difficult for the new entrant to enter into the market and develop creative strategy to gain market share in near future. It is necessary for the new entrants to strategise their business with latest technological innovation so that it would be possible to tackle the tricky situation on the UK retail business environment and mitigate the risk factors to sustain in the market and strengthen their customer’s base in near future (Heikkilä, Bouwman and Heikkilä, 2018).

Competitive advantage

Gaining competitive advantage is the major objective if the organisations in such an intense competitive market. It is important for the organisations to develop appropriate strategic planning to compete with the retail brands so that it would be possible to run their operations successfully in the UK market. The UK retail market is highly competitive, where there are famous retail brands such as Tesco, Sainsbury’s, Lidl, Aldi, Wal-Mart and others who are operating across the market efficiently. Their product portfolio and market share is high as the companies are efficient to serve the customers by delivering high quality products and services (Heikkilä, Bouwman and Heikkilä, 2018). Thus it is risk factors for the new business to gain competitive advantage at the first pace, where the firm may face high competitive threats in operating in the retail industry of the UK. It is the aim of the organisation to gain high competitive advantage through gaining market share which would be possible through developing the effective strategic planning. In this regard, as per the proper strategic planning the organisation needs to develop product portfolio by managing availability of all the retail products at the store as well as set affordable price to attract the audiences in the market., in order to gain competitive advantage, the new business must establish their store innovatively and provide efficient services to all the customers at the store (Cosenz, 2017). In this regard, it is also necessary for the firm to develop online distribution channel and create organisational website, as the people in the UK prefer online shopping and e-commerce activities. This would be a great strategy for the new business to set up their operations in the UK retail market and gain competitive advantage in near future.

Suggestion of proposed target market

Targeting the audiences is essential for the organisation, to strengthen their customer’s base in future. The organisation must segment the customers in the market and the base of segmentation would be age, gender, culture, economic class. These are the major segments, where the organisation would be able to target the right customer’s base for the quality products and services of the firm. In this regard, as per the age, the company would target the age group from 22 years to 45 years, where the purchase intension of the people is high. The organisation would be able to retain the wide age group people and serve them with quality products and services. There are creative clothing and accessories, unique home appliances which may target the age group of 22 years to 35 years. As well as there, the firm also aims at providing all the necessary products in daily life and home appliances which will target the age group of 35 years to 45 years (Heikkilä, Bouwman and Heikkilä, 2018). Thus, the targeted age group is effective for the organisation to influence their purchase intension. Accordingly, the company targets both male and female for their products so that the people can be attracted through the quality products and services. In this regard, the organisation would mainly targets the housewives at the UK where they can influence their purchase in decision making behaviour by providing high quality products at effective price rate (Ghezzi and Cavallo, 2018). On the other hand, for economic class, the company mainly will target the low and medium class income earners, where it is possible to target them by delivering quality products at effective competitive process so that it is possible for the customers to afford the products in the market. Thus this strategy is also effective for successful positioning of the organisation in the UK retail market where it would be possible for the new business to establish their firm and retain the customer for long run.

Reference List

Cokins, G., 2017. Strategic business management: From planning to performance. New York: John Wiley & Sons.

Cosenz, F., 2017. Supporting start-up business model design through system dynamics modelling. Management Decision.

Cuc, J.E. and Miina, A., 2018. Classifying the Business Model from a Strategic and Innovation Perspective. Journal of Business Models, 6(2).

Ghezzi, A. and Cavallo, A., 2018. Agile business model innovation in digital entrepreneurship: Lean startup approaches. Journal of business research.

Heikkilä, M., Bouwman, H. and Heikkilä, J., 2018. From strategic goals to business model innovation paths: an exploratory study. Journal of Small Business and Enterprise Development.

Muff, K., Kapalka, A. and Dyllick, T., 2017. The Gap Frame-Translating the SDGs into relevant national grand challenges for strategic business opportunities. The International Journal of Management Education, 15(2), pp.363-383.

Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). London: McGraw-Hill Education.

Stretton, A., 2017. An organizational strategic framework, and project and other contributions to achieving strategic objectives. PM World Journal, 6.

Stretton, A., 2018. Relating causes of project failure to an organizational strategic business framework. PM World Journal, 7(1), pp.1-10.

Wright, G.A., Pawlak, K., Tounitsky, W., Parrott, L., Cracknell, D. and Arunachalam, R.S., 2017. Strategic business planning for market-led financial institutions toolkit.

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