BMB4003M Entrepreneurship and the Business Environment
BMB4003M Entrepreneurship and the Business Environment
Introduction
The following report has been presented based on developing a business plan for a new entrepreneur business venture while focusing on a specific target link to the UN sustainable development goal. Regarding this, the entrepreneurial venture selected for this report is a clothing thrift company named Thrift Co, which will be operating in the UK marketplace. In this context, the following report will justify confirming the UN goal the organisation would be planning to address along with specifying its mission and vision statement. Other than this, situational analysis of the external environment and focus on the key customer segments would be analysed for an efficient research outcome.
Confirmation of the single UN Sustainable Development Goal
The United Nations notification approved the sustainable development goals (SGDs) referred to as a global goal. Moreover, in 2015 the global call to action to end poverty, while safeguarding the environment and guaranteeing that by the year 2030, all the people in the world live in prosperity and peace. 17 SDGs are interconnected and acknowledge that the decision made in one area will have an impact on another area that can have an interrelated aspect of development while focusing on a balance between environmental, economic, and social sustainability.
Figure 1: Gender pay gap in UK
(Source: ONS, 2023)
For this report, goal 5 has been considered, which will be addressed by the organisation in the UK marketplaces. According to a measure, in 2022, it has been identified that 60.3% of the gender gap in the world economic opportunities and participation was closed. The UK ranked 44th in terms of closing the gender gap in the area with 73.3% (Waitzman, 2023). According to the World Economic Forum, income disparity and gender parity have increased by 2022 (Waitzman, 2023). However, in the UK women are often more likely than men to enter the workforce with better degrees but they also make less money per hour. Women are three times as likely to work part-time, more likely to accept unpaid jobs, and less likely to contribute to private pensions (Ginn and Foster, 2023). Besides this, girls typically perform better in school than boys do but they perform worse in the job market. From this context, it can be stated that the UK is falling behind in addressing goal 5 of UN SDGs, therefore, Thrift Co. has been considered as an organisation that will have women employees and managers to reflect women’s empowerment while addressing the issue majorly.
Mission and vision statement of the business venture
The mission statement of Thrift Co. is “to empower every female individual working in the organisation with adequate respect and sense of belonging”. With this mission statement, every individual can get engaged with the organisation while developing a sense of responsibility that can lead to the progress of the company. Moreover, in terms of the vision statement, the organisation focuses on “supporting women entrepreneurship through a collaborative, empowering, and innovative network while creating bigger businesses with a feminine approach that can nurture overall environmental and business effectiveness”. This mission and vision statement of Thrift Co. would be the major foundation of the organisation to have progressive growth toward future success and opportunities.
Situational analysis
PESTLE analysis
Political
It is understood that government of the UK has faced a high political instability after Brexit in 2020 (Pennycook et al. 2022) (Refer to Appendix). Multiple presidents have changed over the years and suitable political environment could not be established by the government. In this situation, it is not beneficial for Thrift. Co as it has reduced government support and benefits.
Economic
In recent times, inflation rate of the UK has faced a high inflation rate of 4.6% (ONS, 2023) which is lesser than in 2022 but still high for companies (Refer to Appendix). In this higher inflation rate, raw material for Thrift. Co could not be collected at a huge rate which is not beneficial for the business. Nonetheless, GDP growth of 0.2% in the year 2023 has been seen in the UK which indicates a higher purchasing power for customers which is beneficial (ONS, 2023).
Social
The estimated population of the UK in 2023 is 67,736,802 which is massive (Worldo Meters, 2023). Higher population has a higher demand for fashion products which will help the organisation to gather a higher profit. Along with that, the business can easily set its target market from a higher population.
Technological
Technological market of the UK is continuously growing. Introduction of new automation and AI software has helped organisations to develop business efficiency and continue business activities without facing any human-based errors (Sweeting, 2022). This may help Thrift. Co to enhance its product quality.
Legal
the UK government has introduced a highly strict employee law which forces companies to provide significant benefits to their employees (Chouaibi et al. 2022). In addition, the strict corporate regulations regarding licensing, registering and so on have expanded additional cost of business.
Environmental
Government of the UK has introduced strict regulations regarding environment in the Environment Act 2021 (Legislation, 2023). This forces employees to maintain an environment-friendly business strategy and introduce green technologies, which eventually cost a high amount and reduce the potential income of the business.
Porter’s Five Forces
| Forces | Impact | Implications |
| Bargaining power of buyers | High | In the UK fashion industry, bargaining power of buyers is high due to availability of numerous fashion brands (Zhang et al. 2021). Similarly, customers are highly educated regarding fashion products and they can easily seek alternative products. |
| Bargaining powers of suppliers | Low | The potential supplier bargaining power is low in this industry as companies can easily seek different suppliers. This can help Thrift. Co to avoid financial expenses. |
| The threat of new entrants
|
Moderate | Threat of new entrants is moderate in fashion industry as not many entrepreneurs directly focus on entering fashion industry (Goworek et al. 2020). However, few businessmen show interest in this industry based on its high demand. |
| Threat of substitute | High | The company is focusing on selling trendy fashion products which have numerous substitutes in the UK. Many companies are producing trendy fashion products. |
| Competitive rivalry | High | If Thrift. Co starts its business in the UK, it will face direct competition with Primark, H&M, Next and so on. It can lead to a higher competitive risk (Zhang et al. 2021). |
Table 1: Porter’s five forces
Key customer segmentation
In regards to customer segmentation in a large populated country such as the UK, Thrift. Co can consider demographic segmentation, psychographic segmentation, and behavioural segmentation. In respect to demographic segmentation, income, age, gender and so on customers will be analysed by the organisation to understand their requirements and target different types of customers for different types of products (Li et al. 2021). In addition, psychographic segmentation is taken into consideration to analyse their psychographic characteristics such as interests, beliefs, habits, and personality to determine their purchasing behaviour in the business which is highly beneficial to predict future financial benefit of the organisation (Li et al. 2021). Finally, the organisation can consider behavioural segmentation to gather details of their purchasing behaviour.
TOWS Matrix
Strengths
|
Weaknesses
|
|
Opportunity
|
S-O
● Management can use its workforce to meet demands of citizens. ● Experts in the field can help gather further tax benefits |
W-O
● Lower tax rate can help to hire more experienced leaders in the company ● Capturing customer demand can create brand image |
Threats
|
S-T
● Experts can help to provide unique offers to customers to reduce competition ● Skill employees can reduce source of additional cost |
W-T
● Creating brand image can reduce competition. ● Gathering experience can help to reduce costs. |
Table 2: TOWS
Recommended and justified SMART objectives
A few recommendations have been justified below based on the above analysis with a SMART objective that would be reflected in tabular format.
| Objectives | Specific | Measurable | Achievable | Relevance | Time frame |
| To follow up with the latest trends in the current fashion market | This objective is specific in terms of focusing on selective thrifting that will lead to having access to trendy clothing materials | This can be measured with the support of better marketing as well as having technological incorporation in the organisation such as Big Data Analytics to refer to the current trends | This object is achievable as most individuals do not repeat their clothes and this might impact collecting trendy items | This objective has a high relevance because while operating in a fashion retail industry considering trends is essential to operating competitively | 8 months |
| To work with women, lead NGOs that support gender equality | This objective is specific as it significantly gets aligned with the organisational mission and vision statement to focus on gender equality while supporting women | This objective is measurable in terms of increasing alliances with women-led organisations and is a positive aspect for the business to operate in the marketplace while addressing the issue of general disparity | This objective can be achievable, as gender equality has been one of the most important aspects in the current marketplace and this objective would lead to creating awareness and promoting gender equality | The objective is highly relevant due to the increased concern about gender disparity in the workplace, which needs to be resolved | 14 months |
| To invest in technological development | This objective is specific, as to operate in the current business marketplace technological development is highly required that impacts an overall business development and procedure to operate successfully | This objective can be measured with the consideration of technology such as AI, and machine learning, as justified in the above analysis | The objective can be achieved with the support of great investments and funding that will lead to supporting organisation in developing and transforming the overall business procedure | This objective is highly relevant, as with consideration of technology an organisation can take a rapid rise in the marketplace | 14 months |
Table 3: SMART objectives
Conclusion
Referring to the overall analysis it has been identified that Thrift Co. would be focusing on the UN SDG goal 5 of gender equality while empowering women with their women-led business. In this context, a situation analysis has been justified where the consideration of trend technology and consumer behaviour has been justified with highly competitive rivalry. Referring to that, a few objectives, for evidence, concerning technology, trends, and aligning with women-led NGOs all of this would lead to developing Thrift Co.’s business-level strategy effectively while referring to skilled employees with a better business vision.
References
Chouaibi, S., Chouaibi, J. and Rossi, M., (2022). ESG and corporate financial performance: the mediating role of green innovation: UK common law versus Germany civil law. EuroMed Journal of Business, 17(1), pp.46-71.
Ginn, J. and Foster, L., (2023). The gender gap in pensions: how policies continue to fail women. Journal of the British Academy, 11(S2), pp.223-242.
Goworek, H., Oxborrow, L., Claxton, S., McLaren, A., Cooper, T. and Hill, H., (2020). Managing sustainability in the fashion business: Challenges in product development for clothing longevity in the UK. Journal of Business Research, 117, pp.629-641.
Legislation, (2023). Environment Act 2021. [Online]. Available at: https://www.legislation.gov.uk/ukpga/2021/30/contents/enacted [Accessed on 4 January 2024]
Li, Y., Chu, X., Tian, D., Feng, J. and Mu, W., (2021). Customer segmentation using K-means clustering and the adaptive particle swarm optimization algorithm. Applied Soft Computing, 113, p.107924.
ONS, (2023). Consumer price inflation, UK: November 2023. [Online]. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/november2023#:~:text=a%20year%20ago.-,The%20Consumer%20Prices%20Index%20(CPI)%20rose%20by%203.9%25%20in,of%2011.1%25%20in%20October%202022 [Accessed on 4 January 2024]
ONS, (2023). Gender pay gap in the UK: 2023. [Online]. Available at: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2023#:~:text=In%202023%2C%20the%20gap%20among,seen%20in%202019%20(17.4%25). [Accessed on 4 January 2024]
ONS, (2023). Gross Domestic Product (GDP). [Online]. Available at: https://www.ons.gov.uk/economy/grossdomesticproductgdp#:~:text=UK%20GDP%20is%20now%20estimated,quarters%20of%202022%20is%20unrevised [Accessed on 4 January 2024]
Pennycook, G., McPhetres, J., Bago, B. and Rand, D.G., (2022). Beliefs about COVID-19 in Canada, the United Kingdom, and the United States: A novel test of political polarization and motivated reasoning. Personality and Social Psychology Bulletin, 48(5), pp.750-765.
Sweeting, R.C., (2022). UK venture capital funds and the funding of new technology-based businesses: Process and relationships. In Venture Capital (pp. 315-336). Routledge.
Waitzman, E., (2023). International Women’s Day 2023: Have gender gaps narrowed?. [Online]. Available at: https://lordslibrary.parliament.uk/international-womens-day-2023-have-gender-gaps-narrowed/ [Accessed on 4 January 2024]
Worldo Meters, (2023). U.K. Population. [Online]. Available at: https://www.worldometers.info/world-population/uk-population/#:~:text=the%20United%20Kingdom%202023%20population,(and%20dependencies)%20by%20population [Accessed on 4 January 2024]
Zhang, B., Zhang, Y. and Zhou, P. (2021). Consumer attitude towards sustainability of fast fashion products in the UK. Sustainability, 13(4), p.1646.
Appendix: PESTLE
| Factors | Implication |
| Political | ● Instability in the political environment after Brexit
● Corruption in politics |
| Economical | ● Inflation is 4.6%.
● GDP growth is 0.2%. |
| Social | ● High population of 67,736,802.
● Demand for fashion products. |
| Technological | ● Use of AI technologies
● Demand for automation |
| Legal | ● Strict corporate laws
● Strict employee laws |
| Environmental | ● Strict environment laws |
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