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Unit 8 Retail Theory Level 5 UKCBC

3315Downloads1 I Published: 28 Mar ,2020

Introduction

Retail is considered as selling of goods and services on a small and micro level to consumers. The retail sector is a very crucial sector from the purpose of Economy. But providing services or goods on retail basis involves a lot of expenditure as well as resources and therefore only those companies will be able to survive and do well, who will have the right kind resources and money spending capability with them. It is one of the most growing industry with and is having a multiple digit growth in Economy (Leck and et.al., 2015 ). Usually retail sales takes place among consumers who belongs to low and mid income group, The pricing of products offered in retail sector is also based on consumer preferences, Incomes, needs etc. One of the crucial sector within retail industry is Fashion sector. This sector is growing Rapidly and contributing to Retail Industry in a good way.

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Introduction Of The Company

Merc Clothing is a company based in UK and it deals in Fashion as well as Clothing. The company is specialises in various types of Shirts, Trousers, Parkas,Jackets, Accessories as well as shoes etc. The company also carry various types of casual clothing with itself. The company is privately owned and is doing well since its inception in 1967. The company is headquartered in Carnaby Street, London. Fashion industry in UK is doing Well and is expected to grow in future as well, The business of the company is also expanding due to the kind of demand that is prevalent in the market for casual wears. The company is having an edge over the other in terms of the quality of clothes and materials used for its fashion products. The company was founded in 1967 by Javed Alavi in London, UK (Davies and Sigthorsson, 2013 ). The company not only makes its own merchandise but also stock other brands such as Fred Perry, Farah etc. But later on company stop stocking these brands and starts to focus on selling their own Products of Clothing. The company is doing exceptionally well among youth as the demand of casual wear is quite high among them and it is expected that the company will be able to make necessary profits for the upcoming years, which will help it to grow its business and become a big retailer to compete with other big fashion Brands in UK such as H&M etc. Merc Clothing is also having its presence in online market through its website, and it delivers products to various continents through this website.

Key changes within the Fashion Retail Industry of UK

There has been various changes that has been witnessed in clothing in fashion and clothing  Industry in recent Era, This is because a drastic change in the needs as well as preferences of consumers towards various Clothing patterns. There are various companies in the Fashion Sector in UK and is competing to fill the demand gap in Market. In today's Era The companies are making various products to attract consumers and are focusing on delivering high Quality products to its consumers in an effective as well as efficient manner. In order to assess the relevant changes that has taken place within the fashion industry of UK, It would be appropriate to conduct a PESTLE analysis of the concerned market, so that a proper knowledge of all the macro factors can be taken and this will help companies as well as business to form strategy that would be beneficial for organization and its stakeholders (Mackellar, 2013). The PESTLE analysis is consist of various elements like Political, Economical, Social, Technological, Legal and Environmental Factors etc.

Political Factors: It refers to the Political Certainty and the kind of politics that prevails in the country. The political strategy of a nation will have a direct impact on the strategies of companies as well as their profitability and sales growth. Merc Clothing deals in Clothing and Fashion and it have to make sure that the overall business of the company remain profitable. It also refers to the political Ideology which is being followed by the ruling party of the nation. Certain parties believes in communism while others would have faith on Capitalism (Jones and Murphy, 2011). These ideology differs a lot and have considerable impact on the macro Political Environment of a nation.

Economical Factors: It refers to the Economic Policy that is being followed by the rulers of  country and level of GDP growth. It is therefore quite crucial that management of Merc clothing takes care of the economical policy which is prevalent while framing strategies for the company in an effective manner (Maddison and Denniss, 2013). The growth rate of Fashion industry Is direct linked with what is happening in economy and growth of fashion industry will decide what is going to be the profits of Merc clothing, therefore it can be categorically said that Economical factors has a direct impact on business.

Social Factors: Certain social factors are also very important in estimating the right kind of demand for products. The social factors would involves the culture that prevails, preferences, language, as well as the needs and demands of Individuals. There are various kind of social changes that have taken place in UK. The youth of UK has seen a shift in the clothing pattern, they are more interested in wearing casual stuffs which will attract opposite sex, and also what they see in Cinema's as well as other TV shows etc. Therefore it is essential that company should be aware of the changes that is taking place in the social factors of a country or nation.

Technological Factors: This is also an important factor for framing right kind of strategy. If a company wants to grow and have a competitive advantage over the others, it should have a technology which is different than those players. The machines used for Production, the effectiveness of distribution channels, and the online presence of the company, have a very significant influence on sales and profitability of company (Spaargaren, 2011). Merc Clothing shall make sure that it is having state of the art technology and any changes in technological should be applied by the company in itself.

Environmental Factors: It refers to taking care of environment while growing and developing business (Ajami and Goddard, 2014). A company knowingly or Unknowingly do harm environment if it uses any materials or processes which is ultimately have a negative impact on Natural Environment of the country. Merc clothing have its own production facility and the company shall make sure that it is not harming the environment, through use of any such materials which it should not use (Pantano, 2014).

Legal Factors: It refers to the legal laws and regulations which are prevalent in business. It includes various legal laws which directly or indirectly impact the working of Fashion and retail sector.

Fashion industry in UK is growing very rapidly, It is therefore needed that businesses should understand that the only way they can compete and lead is by providing high quality clothing option to consumers along with maintenance of low prices for a prolong period. Merc Clothing is committed to provide high Quality fashion clothing to its customers by making necessary changes in its processes (Mitchell, Hutchinson and Bishop, 2012).

Changes in Micro environment

A business is not only gets affected by macro environment but also through Micro environment. Micro environment usually talks about the company and how it will going to affect business and its functioning. The various factors that have a key role in micro environment analysis is :

  • Competitor: Merc Clothing is a medium scale company and is having presence in most of the parts of UK and some continents around the world through exporting its products. The company is facing various competitors in the sector, and it have a direct impact on overall business strategies of company (arzabkowski, Lê and Feldman, 2012). The company is aimed to make necessary changes to gain competitive advantage over its competitors in market. The various competitors of Merc Clothing is very large in size and they do have considerable resources with them, which will enable them to shape market and its demand. Therefore, Marc clothing shall make sure that proper and effective strategies are framed to compete with such big players.
  • Suppliers: Suppliers of a company can play a big role in shaping the demand and prices of product. The quality of raw material supplied will have a impact on the quality of final product. The company requires material like cotton and Jute to make certain clothings from them and for this purpose it relies on various external suppliers outside UK like from China and India. This help company in getting raw materials at a very low prices and therefore the profitability of the company can be increased and maintained.
  • Employees: Employees are real assets of company, a company can not grow and prosper if it does not have the right kind of manpower with itself who are ready to work for company (Combs, Ketchen Jr and Short, 2011). It is also the duty of HR manager to make sure that employee force of a company is good enough to generate higher productivity as well as profitability.
  • Shareholders: These are the people who own company through owning shares and stake in it. If a company will not take care of its shareholder by giving them adequate profits from time to time, they will shift from the company and company make lack capital going forward. It is therefore quite crucial that Merc clothing make necessary changes in its policies to incorporate various rights of shareholders and rewarding them by paying even more dividends and profits.
  • Customers: They are the one who are responsible for ultimate growth as well as profits of the company. It is therefore quite important that overall business is managed in such a manner that customers are satisfied from what they will get. The needs as well as demands of consumer should be effectively managed by the company.

From the point of view of micro perspective, it is quite important that Merc Clothing will implement various policies for effective management of its Micro factors that will have a direct impact on its profitability and sales. If the company will be able to do so, the product quality can be increased and the customer will be more than happy to deal with company.

Various Strategies to tackle the changes that are taking place within Clothing Market.

In this modern era, There is a lot of competition in every industry as well as market. They have to make sure that business is managed in such a way that overall competitive advantage of company will increase. Merc Clothing follows different type of strategies to respond to various kind of changes that takes place in its external environment. The fashion clothing market is changing rapidly (Haney and Pollitt, 2013). The disposable income of people are being spent on outfits and dresses, because everyone would want to look good and spend money on consuming various types of clothing and fashion outfits. The aspirations of consumer is rising and they are ready to spend more money on consumption of clothing and accessories, this has boosted the level of sales for companies in fashion industry at the same time the level of competition in the market has also increased multifold.

As a leading fashion retail company Merc clothing is responsible for maintaining its brand image through proper advertising and marketing. They have to make sure that mind set of people is towards the company so that they will not think of shifting from them. There are various macro as well as micro environmental factors which are part of external environment of company. These factors have to be managed so that business can grow efficiently. The company can change its tactics as well as strategies to respond to such changes. The different kind of alternative strategies that are available for Merc Clothing can be explained below :

Product Design Strategy: Fashion can be considered as the most developing and effective industry in the economy (Wanhill, 2013). It comes under Retail Sector and is growing day by day because of the fact that people are ready to spend on personal consumption. Now they do not consider clothing as a necessity, it is a way of life, people want to look good to make sure that they have a reputation in society. The clothing of an individual decides his status in the society and this is a very important trait of an individual's personality.

For the purpose of Making and producing products on the basis of customers demands it is necessary that, the company will design products on the basis of consumer needs and wants. If a consumer would want certain products, The company should have the capabilities to customise it based on their needs and demands. Merc Clothing is producing various kinds of products which differs in variety and the ultimate aim is to satisfy the end needs of individuals. It offers products with specific features and designs, which also give them competitive advantage.

Adroit Design Strategies:  The recent era belongs to technology. Companies are using  various tactics to reach out consumers. Some of the communication media which are used by  companies for the purpose of reaching consumers are media, Newspapers etc. The company manufactures clothes based on various seasons and according to the demands of individuals. The company also gives option to its customers, that they can ask for customisation of products based on their wants (Jayawardhena and Farrell, 2011).  Association actualize viable innovation to legitimate supply of various garments to the different client focuses in the commercial centre. New apparel models accomplishes huge number of income of the association. Association learn distinctive sorts of new and inventive models keeping in mind the end goal to find out objectives and targets of the association. The administration supply diverse writes new and creative plan of garments with a specific end goal to change the essence of wearing distinctive outline of garments.

Change in disposition, conduct, and faith in the individual is the critical factor which affect on the spending example of the people and impact the choice which are identified with the buy of various fabrics It bolsters the execution of the diverse changes in the association. Political factor is the primary factor which influence the diverse elements of the organisation (Das, 2014). It is critical for Merc Clothing to decide the different factor which influence the activities with a specific end goal to extend the distinctive kinds of elements of the association. This is the primary motivation behind why this is most loved brand of extensive number of individuals who needs to perform diverse kinds of the client to augment the distinctive sorts of exercises in viable way.

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Recommendation

After considering the above business report, It is recommended to company that they shall focus on improving the overall quality of its products as well as services to make sure that  its customers will stick with company and remain loyal for a longer period of time. The management should manage its business in an effective as well as efficient manner for the purpose of getting a competitive advantage over the others. It prompts keep up the adequacy in performing diverse kinds of exercises in appropriate way. Merc Clothing put their exertion keeping in mind the end goal to pull in extensive number of client in appropriate way. It helps to execute distinctive plan of fabric in various shops in the commercial centre. Organization likewise execute distinctive procedures to give great nature of items in appropriate way. The director of the Merc Clothing screen the execution of the diverse working worker. There are a few suggestions which achieves the objectives and goal of the association, these are as follows :

  • Fashion industry is growing rapidly and is also consist of various factors which have a direct impact on overall working of an organization and its management.
  • The trends of fashion is changing continuously, and it is needed that management of Merc clothing will implement various strategies to make sure that they are walking according to the trends of market and are not lagging behind.
  • The company is having good customer base. It shall make strategies to retain the same and to build new customers for the company as well. The business is growing rapidly and it should also consider to Expand its business in different countries.
  • It is prescribed to the association to accumulate distinctive kind of data from the commercial centre and get ready successful arrangement keeping in mind the end goal to contend diverse opponents display in the market.

Conclusion

As per the above report it can be concluded that business is dynamic in nature and is changing continuously. The external environment have a direct impact on the business and therefore Retail industry is no exception. It is therefore very important that in order to survive in retail and fashion clothing sector, a company will have to consistently innovate and produce certain clothings which will be liked by consumers, and their demands will be fulfilled. It is also equally important that taste and preferences of Customers are kept on priority, when it comes to Fashion clothing segment. The Decision maker of the organization actualize diverse systems keeping in mind the end goal to determine the different issues which are emerges by various outer factor. It additionally accomplish the upper hands because of execution of new and imaginative plan of fabric to its garments enterprises.

References

  • Leck, H. and et.al., 2015. Tracing the water–energy–food nexus: description, theory and practice. Geography Compass, 9(8). pp.445-460.
  • Davies, R. and Sigthorsson, G., 2013. Introducing the creative industries: From theory to practice. SAGE Publications Limited.
  • Maddison, S. and Denniss, R., 2013. An introduction to Australian public policy: theory and practice. Cambridge University Press.
  • Ajami, R. and Goddard, J.G., 2014. International business: Theory and practice. Routledge.
  • Jarzabkowski, P.A., Lê, J.K. and Feldman, M.S., 2012. Toward a theory of coordinating: Creating coordinating mechanisms in practice. Organization Science, 23(4), pp.907-927.
  • Haney, A.B. and Pollitt, M.G., 2013. International benchmarking of electricity transmission by regulators: A contrast between theory and practice?. Energy Policy, 62. pp.267-281.
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