Unit One: Business Environment
Assignment One
on
Bravissimo LTD
Internal and External Micro-enivronment Audits
REBECCA KING
HND Business and Management
Year 1 2014/15
Business Environment
Research suggests the environment surrounding organisations can be divided into two elements, the internal environment and external micro-environment. The internal environment of an organisation deals with the management of resources like human resources, physical resources, technology, financial resources and any others that constitute the organisation, to implement or perform strategy. Strategy in sync with the internal environment is needed when dealing with competition, as it determines the company’s profile, giving an insight to strategic competences and weaknesses (Strategic Management: Formulation and Implementation 2014). Also culture and other intangible aspects like teamwork, co-ordination, efficiency of employees, running costs and salaries (MBA SKOOL 2008-2014). The external micro-environment of an organisation is also recognized as the task environment and operating environment because the micro-environmental factors have a direct bearing on the operations of an organisation. Such factors are more intimately linked and affect the performance of the organisation and can be identified as the suppliers, customers, marketing intermediaries, financers and community.
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Audit One
What are the vital statistics of Bravissimo Ltd?
Size
In terms of size Bravissimo has been identified by the Sunday Times 2014 as a “multi-million-pound operation” with 25 stores, large number of employees, online website and sister clothing brand Pepperberry, operating from within 22 stores. Compared to similar organisations this is know as a mid-sized organisation…
Turnover
Bravissimo’s turnover over the last 18 years according to The Startups Team in 2013, amounted to £45million which then increased in the same year by 4% to 46.5million Retail Week 2014.
Profit
Bravissimo’s pre tax profit in august 2013 was £2.52million increased from £1.76 million in 2012. In a recent report by Retail Week 2014 Sarah Tremellen states “we’ve been showing a healthy growth for the last few years. Its partly due to change in our marketing strategy, over the past couple of years, which was making sure, we was focused on, making sure what we spent, was more effective”. This shows bravissimos strategy is proving efficient for the organisation with a 31.1% increase in profit over the 12month period.
Numbers Employed
The number employed by Bravissimo according to Company Check 2014 in 2012 was 736. Compared to the year after in 2013 the number of employees decreased to 703, as quoted earlier by Retail Week 2014 the strategy in place, focused on spending efficiently is apparent in the decision to reduced employment.
Market Share
It can be argued Bravissimo is a quite a large organisation, as a Case Study: Bust Break Through back in 2004 identified, at that moment in time, Marks & Spencer to be Bravissimo’s only limited competition - resulting in Bravissimo adopting a new channel in technology through email to “try in a bid to engender mutual trust” Jo Lee 2004.
Competition
Research suggest Bravissimo’s competitors are president in the lingerie market as 7 have been recognized to be Boux Avenue, Debenhams, La Senza, Marks & Spencer, Pink, Victoria Secret and Figleaves. However it is evident that Bravissimo is the only organisation operating within an oligopolistic status, specializing in providing a sole service for larger breasted women with cup sizes ranged from D cup and above, Whereas the majority of the other organisations provide for smaller size women, limited for larger sizes except for Figleaves, registerd in 2011 providing similar products range and sizes with an competitive advantage catering for males aswell, while Bravissimo’s organisation appears women driven.
What does it do?
Product
Bravissimo product provides a wide variety of lingerie, swimwear in sizes D-L Cup and clothing “especially designed for big boobed women, so that they can celebrate their curves and feel good about themselves (Bravissimo 2014).
Service
Bravissimo service provides a bra fitting service, delivered by their experienced fitting consultants, where customers can make an appointment, in-store, based in the United Kingdom.
Range and specialisms
Bravissimo range comprises of New In, Lingerie, Swimwear, Nightwear, Strappy Tops, Sale and Clothing. All of the range consists of wide variety of styles, size and selection for bravissimo customers. Bravissimo specialisms has been identified by Bravissimo 2013 as its relatively new “Boob School Campaign” (Nick Jaspan 2013) introduced to ‘educate women on how a good fitting bra should look and feel’ with it main focus on its free bra fitting service aimed at women aged 25-55, size D cup and above.
What type of business is it?
Bravissimo is a private limited company with share capital, owned by two shareholders. Know-as Sarah-Janae and Jonathan. M. Tremellen. Currently directed by husband and wife, with Sarah holding 60% of share capital to the value of £29,000 and Jonathan holding 40% to the value of £19,800 and performing the duty of company secretary (Company Check 2014).
A limited company is an organisation, set up through registration with Companies House as a legal entity - to manage business activities and employees in order to trade. These types of organisations are responsible for their financials and are separate from the director’s personal funds, they also are required by law to submit statutory accounts and annual tax returns in compliance with HMRC.
What is the organisations purpose?
Vision
“To provide a service to big breasted who find it difficult to find what they want in their size.”
Bravissimo 2014
Mission
Bravissimo’s mission is to be renowned for the quality of service, have a well run, financially secured and successful business growing quickly in a managed and controlled way, and to be an organisation that does something worth while and really makes a difference to customers (Best Companies 2014).
Given goals and objectives
Bravissimos goal is “to improve choice for women” Nottingham Manager 2014.
Customers Served
Bravissimo 2014 believes ‘over half a million women’ have contacted them since they’ve began’ in 1995.
Who are the organisation’s stakeholders?
Buchanan and Huczynski 2010 define stakeholders as anyone who is concerned with how an organisation operates, and whom a change or a programme of changes will affect. As Bravissimo is a retail organisation its stakeholders have been identified through sufficient research to be directors Sarah and Jonathan, delivery companies Royal Mail and CollectPLUS, employees to sum of 703, customers over half a million, community and lenders.
Stakeholder Analysis
Identified most important stakeholders
In terms of the most important stakeholders Bravissimo’s customers and directors can be accepted as they set the aims and objectives of the organisation to fulfill the needs, demands and desires of the customers it serves. However all other stakeholders also have an important role within the organisation as they are the reason organisation operates successfully although there power may not be high the purpose is a must.
What are the organisation’s main responsibilities, and how does it meet them?
It is apparent that Bravissimo
Stakeholder interests investment
Corporate Social Responsibilities
Ethical behavior towards customers, employees and stakeholders
environmental, community,
Legal responsibilities
complyinh with trading standard
Financial responsibilities
Bravissimo’s finanacial responcibilities recorded by Company Check 2014 were to the liable sum of £8,177,431 in 2013, £1,225,391 less than in 2012, showing reduction over a 12month period implying the amount of debt attained by Bravissimo is lessening.
Identification of any conflict of interests
None.
Audit Two
The nature of market the organisation operates in:
Bravissimo’s market can be identified as oligopoly because of the characteristics held by this market in regards to lack of price competition between rivals and it non-price competition methods endorsed through the use of televised advertising and e-commerce. The effects of an oligopoly market are:
· A great deal of market power
· A stable price level
· Much advertising and branding (non-price competition)
· Abnormal profits (the extent depends on the strength of the competitors)
In comparison to a monopolistic market which exsist when all conditions of perfect competition are met, except for the existence of a homogeneous product which bravissimo manufactures, to enable each other organisation within the market a monopoly over is own product, but there is a great deal of competition in the market from other suppliers producing very similar products.
Degree of competition
The Porters model believes that the structure of an industry and the ability of organisations within that industry to act strategically depends upon the five forces: current competition, potential competition, the threats of substitute products, the power of buyers and the power of suppliers these will all be examined to anaylse Bravissimo’s market.
Competition
As already discussed Bravissimo’s best-suited market structure appeared to be oligopoly where a small number of producers supply the market and the characteristics appeared visible. Competition can be monitored through various medias as awards are granted to recognised organisations selected by publics aswell as the use of social networks used by customers to comment on quality of service and products experienced. In relation to this, since 2000 Bravissimo has been a recognized Best Lingerie Retailer every year until 2013 (Peter Crush 2004) when the award was granted to another organisation, which then confirmed the threat of competition, was to be acknowledged and acted upon.
Power of buyer
Lingerie is considered a necessity for many female adults and represents the primary wearers of lingerie in 2013 with an estimated population of 32,572,800 according to statisata 2014 whilst taking ‘plus-size’ (Canning 2014) women into account, which is what some might consider the buyers of Bravissimo goods to be, requiring an organisation who’s unique selling point is the range of bra sizes and styles it manufactures. Confirmed by Bravissimos press officer Becci Vincent what states “for every single bra we stock, there can be 90 sizes we need to keep in stock”, this leaves bravissimo’s competition in a position of low power.
Threat of New entry
Within a clothing retail organisation it can considered there will always be a threat new entry as manufacturers of clothing will always look for more products to produce to meet demands and as lingerie seen, as necessity will come across as a profitable product. However Bravissimo is not just another retailer providing lingerie, it is a specialist, with over 14years experience catering to growing population of women with enlarging breast.
Threat of substitutes
The threat of substitutes should not be a considered for Bravissimo as women requiring such a specialist product are not liable to compromise such an intimate product. In terms of substitutes this is normally apparent when less priced product is available that does the same job.
Power of suppliers
A study by keynote 2014 identifies the UKs leading competitors as manufacturers and suppliers, as they can be defined as:
· UK-based manufacturers
· Manufacturing groups where the majority of the production takes places overseas with headquarters and management centers based in the UK
· Lingerie suppliers and distributors
· Manufacturing groups distributing and retailing own-brand goods under their brand name.
· Manufacturing groups distributing goods on behalf of retailers with whom they have contractual partnerships, thereby products retailed under the retailers’ and not the manufactures’ brand names.
They also state the manufacturing side within the UKs industry is weak due to the majority of lingerie being distributed are manufactured overseas as this is the case for Bravissimo who currently have many of there garments produced overseas, often in countries of the developing world.
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