Industry and External Environment Analysis

INTRODUCTION Our company is always operating in a specific environment, and the formulation and implementation of business strategy is also affected by specific environmental factors. (Osborn & Hunt 1974) In other words, the environment determines the company's strategy, decision-making, organizational structure and management. Environmental awareness is the starting point for environmental analysis. (Sethi 1979) In general, there are two environmental factors to consider in considering both internal and external in corporate strategy.

The following report details the UK grocery retail industry in detail focusing on its external environmental analysis and industry analysis structure. Specifically, we analyze the external environment of the industry using the PEST model and consider regulatory issues that contribute to the formation of such a retail environment. In addition, Porter's structural framework attracts the competitive environment in the UK grocery market, especially the large food chain. The food industry in the UK is huge and influential. There are about 91,509 grocery stores in the UK and about 3 million people work in this industry. In addition, purchasing foodstuffs accounts for the majority of total consumption expenditure. According to IGD data by Food and Food Distribution Analysts, the UK grocery industry's total revenue is now worth £ 150 billion a year, but it is expected to increase to £ 170 billion by 2013 ( refer graph1).

External analysis has short environmental analysis (PESTEL analysis) and industry analysis (analysis by Porter's five powers). Through exploration and investigation of the external environment, I can explain the competitive environment of the industry and how the company can make profits using external factors. The coffee industry faces various kinds of political and legal pressures. Coffee companies import coffee beans from various countries, each country has its own customs and customs restrictions (Datamonitor, 2010). On an international scale, these companies have to acquire expertise on how to import beans from each country, learn more about political turmoil and policy change. From the viewpoint of legal factors, the coffee industry faces a tough international agreement on environmental policy, such as strict requirements on recycling of enterprises. These environmental requirements will affect the cost of the coffee company.