The warehouse group pest analysis: strategic management Essay

Custom Student Mr. Teacher ENG 1001-04 22 April 2016

The warehouse group pest analysis: strategic management

The warehouse group pest analysis
The external environment can be grouped into different environmental segments, the Political/legal segment, economic, socio-cultural and technological segments, otherwise known as PEST. (hanson et al) Technological

Technological advances have also impacted the industry such as the use of self-checkout machines. The introduction of self service has changed the daily interactions for customers making transactions much faster and easier as well as more accurate (nz herald ref). According to NCR, which is the maker of 99% of all checkout machines in NZ, work is being done on ATM technology which will allow transactions to be made through smartphones. (nz herald ref). This will hopefully give The Warehouse Group opportunities for an increase in sales, as a carrier of smartphones this innovation makes way for apps to be created and used for store information and discounts that can be transferred directly from customers mobile phones. Socio-cultural

The socio-cultural environment consists of people’s attitudes and values (hanson et al ref), this externality therefore can effect all other segments of the environment. The Warehouse Group was recently influenced by the union-led New Zealand Living Wage campaign, which was focused on the need for a higher minimum wage in the country in order to lower the income gap between the rich and poor. (nbr article ref). With information about this issue the company researched the amount of income required to maintain a household and then measured it against their employees pay rates; after consideration they have changed the amount they will be paying to certain employees and will soon have a minimum wage of $18.50 to $20 for experienced staff members. (nbr ref). This will hopefully create more stability for The Warehouse Group’s employees. Political-legal

The political-legal environment is the area of laws and regulations that organisations compete in for attention and resources, (Hansen et al). Possible new legislations introduced by the government may affect all suppliers of goods and services in NZ, the new law will make it a breach for consumer supply standard form contracts to contain unfair contract terms (ref) that instigate a ‘take it or leave it’ relationship between suppliers and buyers. This will give suppliers more power and could impede companies such as The Warehouse Group from gaining access to cheaper supplies, The Warehouse is known for its low prices and discounted products so this may cause a decrease in sales revenue if low prices are not continuous.

According to Hansen et al the economic environment is the economy in which a firm competes or wishes to compete in. During the global recession the retail industry suffered severe threats, most companies were forced to make cost cuts in order to make a profit, but with The Warehouse already being a discount store, additional cost cuts put a strain on the company’s performance. (ref). Market conditions today still remain tough and competition continues to increase however the long lasting effects of the recession have been key driving forces for the Warehouse Group to take actions such as the acquisition if noel leeming, to broaden its services as a retail brand and increase profit margins.

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