PC World: Environmental Analysis

Environmental Analysis PC World Shop

PC WORLD

Dublin branch / Electronics Department

2. Terms of Reference

On October 2009 Business Management teacher Ms Keran Abberton

Requested 2000-2500 words report on the organisation where the students doing their work experience or only other company or organization of their choice. This report was to be submitted by 16th December 2009 in partial completion of Business Management module. I got the opportunity to do my work experience in (PC WORLD) shop, and my assignment will be based on this organisation.

3. Method of Procedure

In order to obtain relevant information, the following procedures where adopted:

Class notes from Karen Abberton observation in the target workplace, Blanchardstown ‘’PC World” 2 days a week spent in the “PC WORLD” Blanchardstown branch shop in order to complete 300 hours work experience for my advanced certificate in business course in Ballsbridge College of Further Educations

I obtained the information of working procedure from Ken Flynn, the manager of the department.

He trained me how to price the products, how to put security tags on the computers and all other products in the store, how to fill out the list of the different product to bring down from the warehouse. He told me the code for the wear house door. He explained to me how to print out the tickets for all products. He taught me to deal with customers and how to organise the stock for the next day. Bassically Ken Flynn introduced me to all working procedures in the shop.

I obtained information about” PC WORLD” from the staff and my managers.

4 Findings
4.1 Description of organization

PC World was founded in November 1991, when a company called the Vision Technology Group Ltd, founded by Jan Murray, opened the first PCW Superstore in Croydon.

The 24,000 square foot store specialised in the sale of PCs and computer related products. With PC ownership just beginning to take off, the concept soon proved popular and a second 23,000 square foot store was opened the following year at the Lakeside Retail Park in West Thurrock.

Two further stores followed, at Brentford and Staples Corner in north London. At that point, in 1993, Vision Technology Group struck a deal to sell its four PC World Superstores to the Dixons Group plc (DSG).

Throughout the 1990s DSG continued to expand the PC World portfolio of stores rapidly. In 1996 it acquired DN Computer Services plc, a direct computer reseller business, operating out of Heywood in Lancashire.

This gave DSG the infrastructure it needed to launch PC World Business Direct in September 1997 – a new business-to-business IT mail order service incorporating the brand strength of PCW and the sector expertise of DSG. A fully functional transactional website – www.pcwb.com – followed in 1999.

In March 2001, as PC World Business, the company moved into a brand new £13 million headquarters building and Operations Centre in Bury, Lancashire to meet the growth in demand from the business market.

Recent achievements

In October 2001 PC World Business was accepted to become an accredited GCat (Government Catalogue for IT supply) Prime Contractor to the Public Sector.

In May 2002 PC World Business won two major multi-million pound contracts as a lead supplier and enabler of the Scottish Parliament’s (The Scottish Executive) new ‘Digital Inclusion Programme’ aimed at giving every individual in Scotland better access to online services.

Also in 2002 the group acquired Genesis Communications – a specialist Business Telecoms reseller – to strengthen its business-to-business offering.

PC World Business also strengthened its product offering in 2003, with the introduction of a new finance package called SmartPlan. This product, a unique offering in the UK, allows businesses to spread the cost of their larger IT purchases in the form of a lease agreement.

In June 2004 Micro Warehouse UK became a division of PC World Business, following the acquisition of the UK Operations of WHSU Inc. and WHSU International Inc. (formerly known as Micro Warehouse Inc. and Micro Warehouse International Inc. respectively) by PC World Business’ parent company.

Micro Warehouse is one of the UK’s largest and longest established direct resellers of branded IT products and services to business. Commenting on the acquisition, Simon Turner, Managing Director of PC World Group said “This is an important deal that will further consolidate our position in the B2B technology market in the UK. The Micro Warehouse business will add scale to our unique combination of direct selling, national network of Business Centres and cutting edge value added services”. (Ref: www.pcworld.com accessed 15th of December 2009)

Ken Flynn managing director of Blanchardstown PC World branch. Responsible for inbound and outbound procedures which profit the shop.

John O’Connor is assistant manager which responsible for all staff workers.

Pallav floor manager has pretty much same responsibilities as assistant manager of the floor.

Kryzstof he is stock controller in the warehouse responsible for inbound products. Making sure no products arrive damaged. Correct distribution of this stuck.

Staff is responsible in the first place correct they provide.

I myself am responsible for making sure that no customers a left an attendant. I have to introduce customers to the products benefits and fetchers. To let them know the prices I also help Krzystof in the warehouse from time to time .

4.2 Internal influence on organization

The value chain analysis is a very important tool for an organization. It helps to see the company’s structure and who is responsible for what. The value chain analysis includes the detailed description of each department of the company.

1. Inbound Logistics: It is the first step of the PC World’s business.

All the goods received by the company are inbound logistics, the stationary. The stock arriving in the warehouse.

2. Operations are the value creating activities that transform the inputs into the final product.

3. Outbound logistics are the activities required to get the finished product to the customers, including warehousing, order fulfillment, etc.

4. Marketing & Sales Are those activities associated with getting buyers to purchase the product, including channel selection, advertising pricing, etc.

4. Service activities are those that maintain and enhance the products value including customers support, repair services, etc. (www.valubasedmanagement accessed 10th of December)

Any or all of those primary activities may be vital in developing a competitive advantage. For example, logistics activities are critical for a provider of distribution services, and service activities may be the key focus for a firm offering on-site maintenance contract for office equipment.

These five categories are generic and portrayed here in a general manner. Each generic activity includes specific activities that vary by industry. (www.valubasedmanagement accessed 10th of December)

4.3 External influence on organisation

PEST analysis

It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization’s marketing environment is made up of:

PEST

Political Factors.

The political factor has a huge influence on any businesses in the country it runs in, and also on the spending ability of consumers. The following issues should be considered.

Law of employment

Will government policy influence laws that regulate or tax your business?

Impact of environmental regulations. Recycling charges.

The employment law in PC World shop is followed according to the rules and regulations of the employment Act. I was trained for safety and fire situations. I got paperwork with the detailed explanation of my duties and entitlements.

If the government changes the tax law to higher rate it means that the shop has to rise the prises on the goods and it means less sales which is a loss for the shop.

Economic Factors.

Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at:

If interest rates go up it will influence the income of the company.

If level of inflation is low than the consumer’s confidence is low.

VAT rates it is being discussed that VAT rate will be increased on tomorrow’s budget; if it happens than potential customers will be provoked to do their shopping across the border.

Socio-cultural Factors.

The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:

An Irish website, www.cso.ie gives information about the population of the country. Marriages, deaths, births and so on. It is important that population grows because in 10-15 years a generation will be old enough to use most new technology. There always will be a huge demand in newer versions of computers, IPods, TV-sets and so on. This is what people want and the higher the population is the better it is for the technology selling shops.

Nearly all the goods in the shop are imported from different countries. The main country of import is China, customers are aware of the fact that most of the goods in the country are imported and it never was a concern. A bigger concern for the customers is which country were the goods released by.

Career attitude – Younger people are more educated in regards to the new technologies and of course it is easier for a younger generation to find a job rather than someone older, because they will need to be trained. Younger people know exactly what they want, what type of computer, TV, DVD-player and so on. Kids digital games, play station, Nintendo games and so on. Business owners can get all the information from the website mentioned above and use it as a guide of purchasing certain goods during different years for sale.

Technological Factors.

Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points:

Does technology allow for products and services to be made more cheaply and to a better standard of quality?
Do the technologies offer consumers and businesses more innovative products and services?
How is distribution changed by new technologies?
Does technology offer companies a new way to communicate with overseas agents?

Technology has a huge impact on selling performance in any business. PC World Dublin is now looking into introducing online shopping. It makes the goods to be purchased cheaper and more convenient for the customers. England PC World has already implemented this procedure and it has a great success.

PC World shops always offer its customers more innovative products for sale. More up to date and newer goods as they are in huge demand as I said before.

Distribution can ease customers’ life as already said online shopping. Telephone sales.

PC World can easily get in touch with its agents in England order an item and let the customer know the day it will be available for collection.

As you can see the PEST analysis is a very important tool for an organisation. It lets the management of the company see the weak sides of the business they run and predict the sales for the nearer future.
Porter Five Forces

A porter Five Forces Analysis is an important marketing planning tool for looking at the competitive environment that affects a business. Understanding the competitive ability of the industry is critical to the company’s potential success.

The model is illustrated here:

Threat of New Entrants

In the first of the five forces, new competitors in industry can raise the level of competition, reducing its attractiveness to current members. The threat of new entrants depends on how strong is the barriers to entry. Business like restaurants, hotels, local shops have very low barriers to entry of the new competitors.

At present the threat of new entrants into the industry of PC World shop is very low. Even when the economy was growing not too many new entrants appeared in the market of Technology selling industry, I doubt there will be any now. So we can say that PC World’s barriers to new entrants are quite high.

Threat of Substitutes

The substitute of the product is not very high because as we know in the first place PC World is part of the Currys stores, which also include Dixons, so even if a customer cannot find the product he needs the choice of the technology selling stores is one of the three mentioned ones or Power City. Customers may switch to buy a good in a shop which has the product they need regardless their wonderful, previous experience with PC World shop. So we can see that PC World’s weak point is lack of variety of the products and if Curys and Dixons weren’t part of the shops co-working with PC World than PC World would have very low barriers of Product substitute, it would be easy for customers to switch to a different shop, but it would be painful for the store.

Power of Suppliers

Suppliers are defined as the businesses that supply materials & other products to the businesses within an industry.

I am not sure who exactly supplies the products for PC World I presume it is China but would say for sure which company or producer. I wouldn’t take the responsibility to judge on this topic because of my lack of knowledge in this area.

Power of Buyers

Buyers are the people and/or organizations who create the demand in an industry. They are the target of any business. They are the reason of the business existence. In the present economical time it is definitely the buyer’s time. And PC World as a buyer has it power upon its suppliers at present, unless the supplier is the only one in the industry market than he can dictate the rules and have complete power upon its customers. Anyway PC World has to lower its prices at the moment to meet the customer’s financial needs.

Intensity of Rivalry

The fifth of the five forces, the intensity of rivalry between competitors in an industry, depends chiefly on:

The structure of competition – a rivalry is more intense where there are many small or closely-sized competitors; a rivalry is less intense when an industry has a clear market leader
an alternative supplier

Strategic objectives – when competitors are pursuing aggressive growth strategies, rivalry becomes more intense; when competitors are milking the profits in a mature industry, the degree of rivalry is lower
Exit barriers – when the barriers (such as the cost to close down factories) to leaving an industry are high, then competitors tend to show a greater degree of rivalry www.marketingteacher.com ( accessed on the 5th of December 2009)

As mentioned already there are not too many competitors in the computer selling industry which means the intensity of rivalry is not that high. The competitors which exist are not taking any extra actions which may dramatically and negatively influence the store strategies and selling abilities. All the shops have pretty much the same prices, products, offers which makes all competitors be stable in the market.

4.4 Internal/external influence on organisation

Swot Analysis

Strength:

Staff – a well trained and qualified staff with many years of experience.

Profitable – The business itself is very profitable. Technology is civilisation. And this type of product will always be in big demand.

Shop location – is very handy. Most of the shops are located in easy to reach areas. In big and busy visited shopping centres.

Growing – the business is growing fast as the products of the company are in very big demand.

Weaknesses:

Lack of new products – New products could be introduced in some of the branches. PC World does not sell domestic technology. (EX: washing machines, dishwashers, fridges etc.)

Price – Sometimes prices on some of the products are higher than in the other shops.

Staff – some staff representatives have lack of knowledge about technology and about the products of the shop.

Macro Analysis – External analysis.

Opportunities:

New products- the introduction of new products can increase sales.

Funding – Investment in staff training, well trained staff means increase of sales.

Service – A good high quality service will make the customers come back again and again.

Threats:

New competitors – Power City is a competitor. If they open more stores around the city it will interfere with the selling procedure of PC World.

Redundancy – in the present recession times people are losing jobs which reduce their ability as a buyer.

Economy – Present economical situation influences sales in a negative way.

5 Conclusions

Blanchardstown PC WORLD’s goal is to sell quality product and satisfy fully its customers’ needs. Company policy is designed to ensure that the company can attract, recruit, develop and retain people of the type and calibre it requires to achieve this aim

Blanchardstown PC WORLD policy is to recognise and reward the potential of each individual employee and to encourage personal development and career progression. Therefore promote internally wherever possible.

Blanchardstown PC WORLD’s aim to exceed customer expectations. The vision of PC WORLD is to be the best and most exciting Department Store in Ireland. It is their mission to ensure that PC WORLD in the Department Store of first choice for discerning Electronics middle market customer

6 Recommendations

I have to say that I was extremely happy with my experience in PC WORLD shop. The customer service staff which seem to be the same people working every weekend I dealt with seem to be pleasant and helpful every time. I found high value goods for little money. I would recommend other student if they can use the opportunity to work in this shop as this is a rich experience in business field.