Environmental Forces Affecting B&Q In The UK Essay

Environmental Forces Affecting B&Q In The UK - Essay Example Current paper focuses on the performance of a major competitor of UK’s home improvement retail industry: B&Q. The particular organization has achieved to acquire a large share of the particular market, as analyzed below. Still, concerns exist in regard to the firm’s ability to keep its profitability high in the long term. The firm’s macro environment has been reviewed and evaluated using an appropriate strategic management tool, the PESTEL analysis. At the same time, an internal micro analysis has taken place for checking the potentials of the organization to manage risks related to its daily operations and to stabilize its profitability. It has been made clear that the power of B&Q to achieve a long term growth cannot be guaranteed, especially since the UK economy is not stabilized. A strategy is proposed for helping the organization to face the external forces related to the particular market and to respond to the needs of its changing environment.In order to u nderstand the environmental forces that affect B&Q it would be necessary to understand the characteristics of these forces, as they are related to the operations of the particular organization. In general, the term macro-environment is used for describing a firm’s â€Å"external forces and agencies† (Reynolds and Lancaste 2012, p.32). The most popular strategic tool for evaluating a firm’s macro environment is PESTEL analysis (Cunningham and Harney 2012). ... The most popular strategic tool for evaluating a firm’s macro environment is PESTEL analysis (Cunningham and Harney 2012). When using PESTEL analysis for explaining a firm’s macro environment it should be necessary to take into consideration the following fact: not all parts of this framework will equally influence the relationship between the firm and its external environment (Cunningham and Harney 2012). Reference can be made to the following example: for pharmaceutical firms patents will have a key importance for measuring these firms’ potentials to face their external forces (Cunningham and Harney 2012). In the case of firms operating in the services industry emphasis should be given on demographics, as a factor that will influence the relationship between these firms and their external environment (Cunningham and Harney 2012). The PESTEL analysis refers to the macro environment of organizations. It should be noted that the particular framework helps to ident ify the factors that affect â€Å"the whole economy and not only a particular organization† (Bowhill 2008, p.331). In the context of the PESTEL analysis the macro environment of B&Q could be analyzed as follows: a) Political; the political environment of UK is quite stable. The current government has tried to enhance the stability of the economy by keeping inflation low, at least compared to other countries (Wood 2011). It should be noted that no threats seem to exist for potential turbulences in the UK political sector (Wood 2011). As a result, B&Q would not be threatened by the specific element, i.e. the political framework, of its macro environment. Still, the challenges that the