External Analysis:
Every business firm operates in a changing external environment.
Recognising, scanning and analysing
such changes in the
broad macro-environment of organisations in terms of political, economical,
social, technological, environmental and legal factors (PESTEL), is known as
external analysis. Firms must have regular
interaction with these external factors to make their strategies compatible with
the environment.
PESTLE Analysis:
The purpose of PESTLE analysis is to classify the
how the organization might be interrupted by the future changes in the political,
economical, social, technological, environmental and legal factors. It helps to
find out the key drivers of change and the key drivers aids to construct
possible future scenarios. This results in building up the potential strategies
that are adaptable to the changed scenarios in the business environment. (Dinesh Bakshi)
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Big Mart super market: PESTLE Analysis.
Big Mart
super market is a well known retail store in Kathmandu since 2009. It took just
few years to enter the industry and gain huge market share. It has two outlets
in Kathmandu: City Centre Kamalpokhari and Lazimpath. It has introduced the
Value and Savings concept to the customers.
Political Factor:
- Affected
by strikes and bands by the political parties.
- Scarcity in supply of products due to such strikes.
- The store has to be closed at the time of strike which leads to no business transaction for that particular day.
- Sometimes it is very risky during bands. There might be some physical damage too.
- The instability and highly corrupted political situation might create problems for big mart regarding the country’s policies and laws.
Economical Factor:
- Increase
in home economy situation in Kathmandu that leads to more potential buyers.
- High tax has to be paid for the imported goods.
- Current inflation may encourage the customers to reduce their shopping habit.
- Its huge competitor, Bhat-Bheteni affects the economy of Big Mart.
Social Factors:
- Big Mart has been able to set its positive brand image in the society.
- Cons umer
gets attracted to its slogan: “Shop Smarter. Live Better”
- Its advertisement is frequently shown on the television especially during festival times.
- Most of the staffs are friendly, helpful and always around. The staffs at the cash counter greet their customer.
- Big Mart provides a discount card of 2% for its daily customer.
- It has also introduced the value and saving concept to its customers.
- It must have a good relationship with its suppliers as the vegetable and fruits items are fresh and changed on a daily basis.
Technological
Factors:
- Big Mart has been able to cope up with the current advance technology of Nepal.
- It has LCD monitors at every counter.
- It also has credit card cashier system.
- It uses microphone to provide information to the staffs and customers about its offers and discounts.
Legal Factors:
- The goods sold at Big Mart are mostly imported ones. This results high tax charges.
- It also gives as much priority to the local products as we observed various Nepal made products displayed.
Environmental
Factors:
- Big Mart should take steps towards being more eco-friendly.
- It must create ideas of managing the unwanted wastes.
- The environment inside the Big Mart can be more friendly and easy.
- Both the stores are located in the city area and it is easy for the customers to go to the store.
- Big Mart must be aware of its competitors like Bhat Bhateni and Saleways.
References:
Big Mart, [Online] Available at http://www.bigmart.com.np/ (Accessed on 7April 2013)
City Centre [Online] Available at http://www.citycentre.com.np/shop/big-mart (Accessed on 7 April 2013)
Dinesh Bakshi. External environment factors| PESTEL analysis [Online] Available at: http://www.dineshbakshi.com/igcse-business-studies/external-environment/revision-notes/63-external-environment-factors (Accessed on 7 April 2013)
