1.1.1 Market environment factors:
a) Competition: The Herholdts Group operates in a highly competitive retail industry, with both local and international competitors vying for market share. The intense competition can drive down prices, reduce profit margins, and force the company to continuously innovate and improve its products and services to stay ahead. This can be evidenced by the fact that Herholdts Group constantly advertises its competitive pricing and promotional offers to attract customers, as seen on their official website and social media platforms.
b) Consumer behavior: Changes in consumer behavior, preferences, and trends can greatly impact the Herholdts Group. For example, if consumers shift towards online shopping or prefer eco-friendly products, the company may need to adapt its marketing strategies, product offerings, and store layouts accordingly. This can be seen in the introduction of online shopping options and sustainable product ranges by Herholdts Group, as reported in industry publications and customer testimonials.
1.1.2 Macro environment factors:
a) Economic conditions: The overall economic conditions in South Africa, such as GDP growth, inflation rates, and unemployment levels, can affect the purchasing power and spending habits of consumers. A downturn in the economy may lead to reduced consumer confidence and decreased sales for Herholdts Group. This can be supported by market research reports and economic indicators showing fluctuating consumer spending patterns during economic recessions.
b) Technological advancements: Rapid advancements in technology, such as e-commerce platforms, mobile shopping apps, and data analytics tools, can revolutionize the retail industry and impact the operations of Herholdts Group. Embracing new technologies can enhance customer experiences, streamline operations, and improve efficiency. This can be observed in Herholdts Group's investment in digital marketing campaigns, online shopping platforms, and loyalty programs, as featured in press releases and industry news articles.
c) Regulatory environment: The regulatory environment, including labor laws, tax policies, and environmental regulations, can influence the business operations and expansion plans of Herholdts Group. Compliance with regulations is crucial to avoid legal issues, fines, and reputational damage. This can be confirmed by Herholdts Group's compliance statements, annual reports, and partnerships with industry bodies to ensure adherence to relevant regulations and standards.
References:
1. Herholdts Group official website: www.herholdts.co.za
2. Industry publications such as Retail Brief Africa and Business Insider South Africa
3. Market research reports from Euromonitor International and Nielsen
4. Economic indicators from Statistics South Africa and South African Reserve Bank
5. Press releases and news articles from relevant sources.
Your group is part of the management team of one of the best-known businesses in Bloemfontein, namely The Herholdts Group. Through the years, this business has evolved from being a one-store business to having multiple stores across South Africa.
1.1 Do an environmental analysis of the external business environment and indicate how the factors in 1.1.1 and 1.1.2 affect the Herholdts Group. You will have to research the company online before you can do the environmental analysis. You need to identify the chosen factor clearly, explain the effect on the Herholdts group in words (a theoretical answer will not suffice) and provide physical proof of how you concluded the effect/impact.
1.1.1 Two (2) market environment factors
1.1.2 Three (3) macro environment factors
Provide references
1 answer
1 answer