Competitive Business Environment: Brewers Fayre - Case Study Example

Competitive Business Environment: Brewers’ Fayre Introduction Brewers’ Fayre prides itself in providing good meals to its s. However, like any other firm, it is affected by environmental factors that are available in the business environment where the business is operating. The following is a PEST analysis for Brewers’ Fayre; Political and economic factors This as Williamson et al (2013) says, refers to any intervention by the government that may affect the way a business is run. Government policies can be impactful to a firm since they bring in some issues that may affect the business in either a positive or a negative way. There are many political factors that affect the way a business is going to operate. Tax policies for instance can be supportive of a business or the can be offensive to the business (Bensoussan & Fleisher, 2012). If a government wants to reduce the sale or use of a certain product, it can increase the tax in order to discourage sales. Other political factors include the decision of the government to support some aspects of the economy (Healy & Palepu, 2012). Since the government is responsible for providing education, health and infrastructure, the way it provides these services to the public can be either supportive of businesses or it can be detrimental. Economic factors Economic factors also affect the way a business is doe can determine whether the business is going to be successful or not (Jung, 2013). Some economic factors include the demographics of a population and minimum wages. Other economic factors such as the growth rate of the economy, the inflation rate, the bank interest rates for loans and the currency exchange rates are also important factors. Businesses that are in a fast growing economy have a better chance for growth. High rates of inflation on the other hand are detrimental to busies growth. At the same time, businesses that operate or are indirectly involved in international busies are affected by the foreign exchange rates (Director, 2012). Each of these factors affects the growth of the business in the long run. Businesses try to understand these factors and redesign their business strategy in order to be fit in the kind of environment that will be created by these factors. For instance, as Ignatiuk (2009) argues, if the business knows that the exchange rates are expected to change in a way that they will be affected in a negative way, they will have arrangement to hedge themselves from such negative factors. Businesses also try to understand the political factor and the trajectory they are taking. This way, they can be able to prepare themselves for the future instead of waiting for things to go bad in order for them to be able to responds (Mennen, 2010). Social factors Social factors include cultural aspects such as health consciousness, the rate at which the population is growing and the demographics of the market (Fleisher & Bensoussan, 2003). With regard to health consciousness, people are now becoming careful about their health because they have reveal that their lifestyles are affecting their health. People feel that they need to eat more healthily and also avoid other habits that affect their health and well being in a negative way, such as alcohol use and cigarette use. With regard to population growth, this affects the business because the faster the population is growing also means that the firm will either have a bigger market or a smaller market in the future. Businesses then try to develop way to with this issue in the future. For instance, if the growth of the population is high, the firm has to be able to prepare itself to serve a bigger market in the future. If on the other hand the population growth is slow, the business should prepare to deal with s shirking market in the future. Technological factors The T in PEST refers to technological factors. Technology affects the way a business is able to succeed in the future. These factors include as Research &Development activity, automation processes and technology incentives that a business needs in order to save itself in the market (Grünewälder, 2008). The rate of technological change is also another factor within this area. The rate at which technology changes affects the business because businesses have to keep pace with technology or their competitors will overtake them. Yet, keeping pace with technology is expensive and also requires technical skills. As a result, technological factors are a fundamental critical success factor for any business to be able to succeed. Political factors affecting Brewers’ Fayre With regard to Brewers’ Fayre, there are two main issues that must be considered. Obesity and government policies The government has realized that the rate of obesity is very high. As a result, it is preparing to come up with ways to reduce obesity in the country. Given that Brewers’ Fayre sells food, this will have an impact on the business. While at the moment it has not been established as to what kind of actions the government is going to take, it is very evident that this will affect Brewers’ Fayre. With regard to the way these political factors will affect Brewers’ Fayre, it is clear that if no action is taken, the firm will lose its market, to a big portion of its market. As the government intends to reduce the number of people with obesity, Brewers’ Fayre’s products will become redundant and some of the m may even be illegal. For instance, if the government intends to legislate a law to make foods with high levels of calories to be illegal, it will mean that Brewers’ Fayre will have to get rid of some of the items in its menu. This will mean that it will have to change its menu and this will definitely affect its profitability. The second issue what regard to government policies that may affect Brewers’ Fayre is the issue of the government reducing the amount of alcohol intake for people. This will mean that fewer people will be drinking and even the few people who will be drinking will have to be drinking less thus reducing the amount of time they spend in the facility. This will mean that few people will be visiting Brewers’ Fayre and this will in turn mean that the profits will be low. This will impact the way in which Brewers’ Fayre will be able to service in the market. These policies are likely to edge the firm from the market if no action is taken to avoid this kind of a problem from happening. How these factors will influence what Brewer’s Fayre should do Since it has been established that Brewer’s Fayre will be affected by this issues, it is only prudent that the firm be able to deal with the issues before they start affecting them in a negative way. For instance, Brewer’s Fayre should start thinking of how the political issues (obesity policies and the drunk drinking policies) will affect its business and start to develop a strategy to deal with this. It can come up with programs to make sure that when the government eventually comes up with the policies to deal with obesity, Brewer’s Fayre will not be left in the dark. Definitely, Brewer’s Fayre will have to change its strategy to make sure that there are guidelines as to how it will solve the issues that will come up. The challenge here is that the only information in their hands is that the government is coming up with policies to deal with the two identified issues. There is no direct information as to how this will be done and so it will be hard for Brewer’s Fayre to come up with specific strategies. However, this will not be an excuse for Brewer’s Fayre not come up with strategies to deal with the issues. Preparedness is all a business needs in order to deal with any problem. As a result, it will be necessary for Brewer’s Fayre to be able to start preparing for the future while looking at these issues. Recommendation With regard to the Brewer’s Fayre situation, there are a number of options in which to deal with them Political issues As has been identified, there are two significant problems that have been identified. Each one of them will need a solution in order to help Brewer’s Fayre to be strategically fit for the future. Obesity issues With regard to this issue, the best solution that Brewer’s Fayre should be thinking of how to start revising tis menus in order to make them fit for avoiding obesity. It is evident that the government is trying to solve an issue that can be easily understood. In this regard, Brewer’s Fayre can decide to be part of the solution as opposed to be part of the problem. Because the government is likely to pass a legislation that is going to ban high calories, it is necessary for the Brewer’s Fayre to start working on this so that by the time such laws come, it will have already been one step ahead. This will help in making sure that the firm will not be caught unaware in the problem (Mennen, 2010). Drunk driving issues This is another problem that has been identified that will affect Brewer’s Fayre. To prepare for whatever the government will come up with in this issue, it will be necessary to make sure that there is a solution for it. The main issue with this issue is that it will lead to fewer people coming to the restaurant. Therefore, the challenge will be to give people one more reason to be at the restaurant. Because fewer people will now be drinking, it will be necessary for Brewer’s Fayre to come up with other ways to meet. For instance, it can come up with a marketing camping to promote other types of drinking other than alcoholic drinking. For instance, tea and coffee are also other drinks that people can drink while meeting. If Brewer’s Fayre manages to make people see tea and coffee as a social drink, it will mean that people who like meeting for drinks at such places as Brewer’s Fayre restaurant will still be going there even if they are not going to drink alcoholic drinks. This will help the firm to deal with this issue. Economic factors Brewer’s Fayre will also be affected by some economic factors. There are a number of issues that it must consider in order to make sure that it will survive the challenges in the future. One of the economic factors that it must prepare for is the declining once. In the current UK economy, more people are earning less and they have more needs to meet. These people may not be able to buy expensive food in restaurants. To make it even more complicated, people the fact that Brewer’s Fayre may be forced to be selling low calorie foods in the future may mean that they have to increase the prices of their food. Healthy food costs more and also will require Brewer’s Fayre to do research that may need to be supported financially. Thee cots have to be transferred to the customer. This can affect the sales and profitability of the firm. To be able to deal with this, Brewer’s Fayre should start carrying out research in how to deliver healthy food (low calories) but at a price that the people in its target market can afford. The firm should also be prepared to deal with rising inflation rates. Inflation will mean either Brewer’s Fayre making less profit or increasing the prices of its products which may not go well with the customer. To deal with this issue, Brewer’s Fayre should start considering how to minimize its cots in order to expand the profit margin without necessarily increasing the prices of its products. This will be very useful for the firm in the long run. The advantage is that Brewer’s Fayre does not have to worry about freeing exchange rates and this will mean that it can focus on solving the other problems to come up with solutions. Bibliography Bensoussan, B., & Fleisher, G. (2012). Analysis Without Paralysis: 12 Tools to Make Better Strategic Decisions. New New NY: FT Press. Director, S. (2012). Financial Analysis for HR Managers: Tools for Linking HR Strategy to Business Strategy. New York, NY: FT Press. Fleisher, S., & Bensoussan, B. (2003). Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition. New York, NY: Prentice Hall. Grünewälder, A. (2008). Analysis of Nokias Corporate, Business, and Marketing Strategies. New York, NY: GRIN Verlag. 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