Business Planning Criteria and Definitions
One useful way of analysing an organisation’s external environment is by grouping external environment is by grouping external forces neatly into four areas using a PEST analysis. Pest stands for
Carrying out a PEST analysis involves identifying the key factors external to an organisation that are in a state of flux and they are likely to have an influence on the organisation in the coming months and years.
Political, legal and fiscal factors- business decisions are influenced by political, fiscal 9taxation0, and legal decisions. Influences might include:
* Changes in the tax structure
* Trade unions
* Changes in the availability of raw materials
* Duties and levies
* Regulatory constraints, such as labelling, quality and safety.
Changes in the availability of raw materials would affect my company greatly, as I need the materials to produce my product. My company needs materials such as cotton and wool to make its existing products, so if there was to be a shortage of raw materials, it could cause a lot of financial damage to my company.
Economic factors- though the economic environment is influenced by domestic economic policies, it is also dependant on world economic trends. Rates of economic growth, inflation, consumption patterns, income distribution and many other economic trends determine the nature of the products and services required by consumers. Influences might include:
* Energy prices
* Price volatility
Inflation would cause immense financial damage to my company, as if the money slowly becomes worthless, then my company would not be bringing in any money-thus not making any financial gain. Unemployment would also damage my company, as my product is not a necessity, there would be no demand for my product.
Social/cultural factors- this involves a close analysis of society. Demographic changes, such as population growth, movements and age distribution, will be important, as will changes in cultural values and social trends. Factors include:
* Consumer lifestyle
* Environmental issues
* Demographic issues
Consumer lifestyles and changes in consumer patterns could possibly cause my company damage, as my product could go out of style, and people could start spending their money on other products rather than mine.
Technological factors-in marketing goods and services, organisations must be aware of new materials as well as developments in manufacturing and business processes. At the same time, businesses have to look at the nature of their products and, in particular, their cost-effectiveness, as well as their performance in relation to competition. Factors might include:
* New technological processes
* Energy-saving techniques
* New materials and substitutes for existing materials
* Better equipment
* New product development
New materials and substitute materials could be of great profit to Sloggi, as there could be anew material that is better for my company to make their products from. If these new materials were a success, then it would be of great benefit to my company.
A SWOT analysis sets out to focus on the strengths, weaknesses, opportunities and threats facing a business or its products at a given moment. It includes both an internal and external element. The internal elements look at current strengths and weaknesses of the organisation, whereas the external elements looks at the opportunities and threats present in the environment in which the organisation operates.
* Good product-my market research showed me that my product would be a success and would bring in money to the company.
* Good relationship with customer
* Good management team
* Operates on a small scale
* Regular cash-flow problems
* Deals in a limited market
* New and rapidly growing markets
* Changing tastes of consumers
* Could diversify into a number of product lines
* Growing competition from rivals
* Recession leading to poor demand in the economy
* Development of foreign competitors
I would have to take all of these aspects into opinion when trying to make my product a success. So that it doesn’t fail, ill have to consider each point.
My company has many main products for men. These are basic, micro, active, boxer, spirit, fun, success and structure underwear. These are all successful items of production, as they all bring in money to Sloggi. All of these products are of financial gain to Sloggi. My product would be in the problem child/question mark area of the Boston Matrix, as it is anew product. This is the riskiest area of the Boston Matrix, which is where most products will fail, but hopefully my product will stand the trials of time.
There are many constraints within a business. There are both internal and external constraints that apply to a business. The internal constraints ate ones, which limit the factors and make it difficult to do everything that they intend to do. External constraints are constraints within the business environment, which are designed to limit and regulate business activities to ensure that everything they engage in is acceptable and in the interests of all concerned.
The 4 P’s:
The price of my product is going to be about 10 pounds as it is the quite near to the top of the price range that that my target audience is willing to pay, it will make the company a profit and it is still at a competitive price with the main competitors to my company.
I will be selling my product in all the main chain stores, such as Marks and Spencer’s and Next. I will also be selling my product in proper underwear shops such as Gossards, which is mainly a woman’s underwear store, but women will buy my product for the men. I will also sell my product on the Internet on sites such as figleaf and on the Sloggi site.
The packaging of my product will be in an ordinary box, so as to cause little embarrassment to people when they buy it. The packaging will also be simple so as to keep the price of the product to a minimum.
To promote my product, I will put adverts into woman’s magazines, such as Bella, and into gay magazines, as my target market is larger men and people in the gay community. I will also advertise on the Internet, on sites such as Figleaf.
I will be distributing straight from the production places to the stores. I will be doing this so that I can cut out the costs of the intermediaries, thus keeping the overall cost of the product to a minimum. My product is environmentally friendly as it is made from natural materials. The left over materials will not be thrown away. I will keep them to make prototype models of future products from. By doing this I am keeping my finances under control and not spending money when I do not need to. The customers will be able to sort out any problems with the product through the website, or by contacting the Sloggi company. It will also be possible to sort out any problems in the stores, and then the feedback will go straight to my company, so that any changes can be made to meet customer satisfaction.