Business strategy Essay Example | Topics and Well Written Essays - 2000 words - 1

Business strategy - Essay Example To start with, political and legal factors such as government instability, taxation law, legislation law, employment law, safety regulation, and foreign policy regulation. It is already been observed that future political decisions, such as alteration to taxes, will affects the trade of these retail businesses. As this is not enough, the retailers have found themselves following safety regulation policies (Carpenter, 2011:74). The report released by Reuters Business Insight shows that retail businesses continue to grow, but economic challenges seem to heighten up. The records on inflation rates, unemployment ratios, collapse of the global economy have characterized the industry. The Reuters have narrowed this trend as resulting in worldwide change in trade economies. The same conclusions carry the load of blame for the resultant changes in the retail industry. Notably, the financial instability affected sales of expensive product and consumer spending rate cut down. During recession, according to Euro monitor Market Research, inflation is inevitable hence affecting the trend in market prices of goods (Amato and Amato, 2012:436). Social factors still pose as a challenge to the Trade Industry. According to Reuters Business Insight, population statistics, lifestyle changes, consumer trends, and income distribution ratings have all influenced the Retail Industry. Even though the inclusion of technology comes as a boost in Today’s world, it has influenced the modalities of Retail Industry. The speed of technology, use of the internet, and innovation of new technologies in everyday business world create a challenge to the Retail Business. This has affected the supply chain since the promotion, and supply chain management links innovative come too quick to some retailers. Majority of them though offer their products through online (Newman & Cullen, 2002:120) Moreover, environmental factors hamper the development of these Retail Industries. Through company repor ts, the issues related to sustainability, environmental protections, desertification, and recycling impede their progress. Competitive Environment The internal competition in the retail industry is inevitable given the existing market and foreseeable innovations. The diversification of the market has rendered it so competitive, and this has seen the installed independent retailers overpowered by the continual rise of chain stores. In order to reach a wide variety of customers, the retailers have resulted in stocking large in these chain stores. This creates a barrier for the beginners. The industry is mature enough in terms of the industry life cycle making it impossible for fresh entrance to survive with the already existing stores. In addition, the power of suppliers has created a relevant competition, especially the bargaining power between retailers and suppliers on prices and supply. The probability of existing retailers taking more from existing and new suppliers is much possi ble as you compare this with any new vendor. Suppliers can easily establish links with existing product manufactures leaving an open chance to the power of buyers on the same product. Because of available alternatives, the buyer is able to go for the best available alternative. This results from standardization and undifferentiated products in the markets leading to lowering of products (LOUIS and Christie, 2012:438). Substitution of product is another way through which competition has entered