Unit 29 P4 - External Factors That Can Affect A Business

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Humzah Ahmad Unit 29- P4

The retail environment

Macro environment- Retailers are endangered to external effects over which they have no control. These external influences are also recognized as macro-environmental factors and can include the alterations in consumer and business confidence and Changes in the housing market Successful retailers are the ones that get ahead and react for that reason. External factors must not be ignored as they might position a risk to the long-term survival of an association. A retailer’s macro environment may be affected by the resulting external impacts; altering customers’ tastes, Retailers giving similar goods at reduced prices, quickly changing market.

Government policy- This can have an impact on the macro- environment of retailers. For instance, political choices can effect on crucial factors such as education and health issues affecting the workplace, trade barriers, legislation and economic infrastructure. Other government are going to be explained in the following sections.

Trading hours- The Sunday Trading Act 1994 rules a retailer exact to trade on a Sunday. The act permits shops to open, but limits opening times of bigger stores of more than 280m squared to a limit of 6 hours. Furthermost shops opening on Sundays have a habit of opening at 10am to 4pm. The legislation was met with significant opposition. Nonetheless, the shop workers trade union USDAW {union of shops, distributive and allied workers} finally decided to care the 6 hour Sunday trading in reoccurrence for a trust that Sunday working would be harshly voluntary and premium pay would be given. Sunday trading has been derestricted in Scotland and such stores are able to open at any time of the day. But, the right of workers in Scotland to decline to work on a Sunday was later discussed by the Sunday working act 2003.

Planning guidance- The Town and Country Planning Act lead local authorities to make local structure strategies. These plans show how shopping areas are possible to be established over a ten year period. In this day and age, retailers have to go with a particular sequence when looking for consent to create out-of-town centres. If a retailer puts forward a plan, it must reflect its store placement option in this instruction; the town centre, a reputable edge of town centre, a local centre, and Out-of-town place which can be made voluntarily available by a selection of transport choices. This act makes it much more complicated for developers to get planning permission for out-of-town developments. Local planners are mainly concerned that any expansion would not damage the vitality and viability of any close by town centre.

Implementation of legislation- The Office of Fair Trading (OFT) was well-known by the Enterprise Act 2002, which applies both consumer protection and competition law. The OFT’s aim is to make markets work well for customers by making sure forceful competition.                                                                                                                        The OFT has three key operational sectors which all distress retailing.                                                                Competition enforcement- applies the Competition Act 1998. The OFT looked into the fusion between Morrison’s and Safeway. One of the recommendations was that Morrison’s sold a few former Safeway shops to other superstores operatives.                                                                                                                                     Consumer regulations enforcement- enforces the Enterprise Act 2002. The operational merchant of computers, software and IT services, Dell corporation Ltd collaborated with the OFT and decided to better its consumer settlements.                                                                                                                                                                        Markets and policies initiatives- the OFT has been inquired by groups on behalf of independent retailers to examine the movement of superstore chains such as Tesco into the convenience store retail market.

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Social changes- As the community’s social situation alters, the retail area also needs to change. Stores must stock up products that join the community’s needs and anxieties. An example of this would be supermarkets now supplying more-free- range poultry goods to meet the strains of society.

Demographics- Retailers also need to be cautious of their own social responsibilities and take into consideration the modifying demographics of society. They have to look at the way they act towards the other parts of society that they come into linking with. The populace of the UK continues to rise and people are ...

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