Business Environment: PC World - Case Study Example

Business Environment: PC World Introduction With trade operations in the UK and Ireland, PC WORLD is one of the largest electrical retail store and service centre and part of Dixons retail plc. The electronics of interest in PC Worlds business serve the fields of computing, household appliances, home entertainment, photography, gaming, phones, broadband and GPS. An ideal PC World store has a knowhow desk, where clients can easily and readily access technology service and support (PC World, 2014). PC World was established by Vision Technology Group in 1991, with the first store opened in the month of November. With four operational stores in the year 1993, Dixons Carphone - then known as Dixons Group plc- acquired the retail chain and embarked on a business expansion phase. During this phase, more trade organizations were acquired as a strategy to increase sale volumes. DN Computers was acquired in 1996, Byte Computer Superstores in 1998 and MicroWarehouse in the year 2004. Having been launched in the UK in 1997, PC World expanded to have 163 stores in the UK in the year 2006. With a style change scheduled for the year 2007, the change of its official logo took centre stage in 2008, a year that saw the company report first ever losses. Factors that support PC World’s Success The presence of online players in the electronics trade resulted to a technology revolution in the company. With customers initially having a negative perception of PC Worlds prices and lack of technical competence among its staff, PC World introduced digital price tickets, which played a major role in winning price wars with online competitors. It also resulted to reduced expenses and time usage since they could change the products price centrally. The staffs were given incentives to increase their level of knowledge. A major transformation in PC Worlds store saw the company reduce the stock in their stores so as to create more space. This saw the previously uninviting and overcrowded stores transformed to more spacious stores with better lighting. Over years, the business has diversified and ventures into selling of new products and services to ensure they expand their market share. With changes in the technology and introduction of new electronic gadgets, the business has been on the front line to make sure that they get the latest for their clients. Working with more brands has also improved the operations of the business as this allows the clients to have a wider range of options to work with. Since its establishment, the business has been expanding its operations through acquisition of other related business. Having been acquired itself in 1993 by Dixons Carphone, the chains have been able to seek potential growing business as well as competitors and acquiring them as a way of reducing competition and growing its market share. Criteria to judge success With a very competitive market, PC has continued to grow as a business and attaining more success. In order to understand this, it is important to analyse the areas where the business has excelled in. Growing market share PC World has gradually continued to grow its market share by acquiring other businesses and diversifying their products and services. According to Wit and Meyer (2010) whenever a business grows in terms of market share, it is a symptom of success. Growth is only brought about when a companys operations are in line with the strategies in place. Increased revenue The gross revenue for the business has been increasing in the last five years proofing growth and success. Keillor (2012) links the success of any business with the increase in revenue. When a business makes profits, then it is considered to be successful and prosperous. Customer satisfaction The business has in the recent year shifted its attention to being customer oriented to help reverse negative reputation about its customer service. More programmes have been introduced to help their customer. According to Gazdar (2007) satisfied customers end up becoming repeat customers. For this reason customer satisfaction forms one of the most fundamental foundations of the long-term success of a business or an enterprise. Consistency The business has been consistent in its operations even in times of economic crisis like the global recession of 2009. With other competitors closing business, PC world has been consistent over time. Schwientek et al. (2008) says that consistency of a business creates confidence with the stakeholders. This trust and confidence from customers and potentials investors form an important part of the business success. SWOT Analysis Strength Every business has its strength and weaknesses. PC Worlds strength has been to offer diverse products and services. With majority of its employees being young, the business can use this strong workforce to boost its operations. By focusing on the strengths, the business will create a competing advantage over the rest of the businesses in the market. Weakness PC World has been faced with criticism of offering poor customer care services. The complaints show that the communication skills of majority of the employees were poor and did not give much attention to the specific needs of their clients. By restricting and reorganizing the customer care department, the business will create customer and brand loyalty from its increasing customer base. Grigoroudis and Siskos (2010) say that the success of any business goes around customer satisfaction. If the customer is not satisfied, the business will not be satisfied too. Opportunities PC World currently has its chain of stores within the UK and Ireland alone. There were other stores in Spain and Italy before but have since been shut down. Nonetheless, there is a great opportunity for the business to expand its operations by setting up new stores from all over the world other than the two regions alone. Considering that their products and services are of universal nature, it would be easy for them to venture into new markets. According to Barnes (2008) going into new markets for any business brings new challenges but more important is the opportunity to expand in customer base as well as revenue. Threat The main threat to the business is entry of new players into the business. This is especially seen in the online stores as more investors are taking into online stores. This will offer competition to PC World which for a long time has been operating on the traditional kind of physical stores. The business is at the threat of losing clients due to its poor customer services. PESTLE Analysis Political Factors The business is operating under very favourable political environment. The UK has for a long time been experiencing political stability with very little interference between the corporate world and the politicians. The situation in Ireland is equally the same with governments encouraging business to expand their operations and make more investments. If the business is to expand, it should focus on regions that have same kind of political stability. Businesses are likely to flourish in environments that are politically favourable. Political instability has affected growth of so many global economics especially in countries with civil crisis like Iraq. Very few people can make investments in such areas. Economic Factors PC world has been having increasing revenue over the past years. However, some of the competitors have been closing business with poor performance. PC world should do market research on the failures of these companies in order to prepare for the worst. The global recession is affecting all the industries and therefore PC world should work out ways that will ensure competitiveness even in such harsh environments. Pablos (2015) says that economic crisis may be unpredictable in some cases and therefore, every business should have long term strategies that will help the business prepare for such events. Social Factors The complaints have been made about poor communication skills and disrespect of the customers from the staff. The culture of the people in UK is more based on respect and human interaction. When part of people’s culture is violated, they are affected. This can lead to poor reputation in the public. More emphasis should be put to ensure that the business is able to meet the social needs of the people. The business should also put more emphasis on corporate social responsibility. According to Idowu (2014) CSR plays a key role in building a companys image and reputation especially in competitive markets. Technological Factors The world’s technology is transforming at a very high rate. New innovations are introduced every day. As business dealing with technological gadgets, the business has a challenge to keep up with the latest trends in software and hardware products in order to remain relevant in the market. Equally, introduction of new and improved products means that they business should facilitate the training and familiarizing of the products to their clients. In plan for long term marketing strategies, the business should go into partnership with manufacturers and suppliers of their products to ensure they play a part in the introduction of new products as well as make recommendations on new innovations. Legal Factors There are cases where business was found in compromising circumstances for failing to adhere to regulations and standards set for their industry. Currently, the legal requirements have been favourable to the business. However, cases have been reported where the business made false statements in advertisements as a way of winning more customers. This was a risky move as the customers may sue the business on the realization of the false nature. Changes should be considered in legislation in terms of import duty and taxes on the imported electronic devices. This will help business save and expand their businesses. Environmental Factors Electronic gadgets are considered to be hazardous to the environment and causes pollution. Many clients have no information and details on what to do with their old machines and gadgets. They end up keeping them in stores and later dispose them into the environment. The business should create awareness among the clients concerning recycling services that they offer. By buying the old electronic machines from clients, the business will have help conserve and protect the environment. Evolution of culture of PC World Organization With change in time, PC World has had to undergo significant changes in order to keep up with competition and challenges. These changes can be seen in the business culture, leadership style as well as operational. According to Nurcan et al (2013) every business must learn to change over time with changes in the industry. Failure to do this, the business will lose touch with their clients and the whole industry as a whole. We will use Harrisons Typologies of organizational culture to analyse how PC World has evolved over time and what benefits it has caused to the growth of the business. Power Culture Majority of small enterprises and also large corporate tend to show characteristics of centralised power culture. The power and influence is centralized with a core area and the rest of the people depend on this core area. Controlling power and influence spreads out from a controlling group to the rest of the people in the organization. This kind of structure offers what we may term as being authoritative and is so much dependent on results. The individuals in leadership are appointed based on their unique performance and excellence. At times merit is in play. This structure is result oriented and to the leader, at times the end justifies the means. PC world concentrates it power and authority within the top management. The business is led by two directors who work with their personal assistants. Below them, there are three other senior management officers who include Sales Manager, Technical Manager and the Finance Manager. With this kind of structure, the organization is able to effectively run since every department have their duties and tasks given down from the top management. The directors work closely with the managers especially in implementation of policies and strategies. The managers have a close interaction with the rest of the staff and therefore making them closer to daily operations and activities of the business. They can therefore advise the directors on the right direction for the business. According to Cox and Radwan (2015) the executive teams of every business relies solely on the junior teams to keep in touch with business operations. Their daily experiences can be used to improve the performance of the business. Roles It is often referred to as bureaucracy and it is based on logic and rationality. In this form of culture, departmental functions are delegated with power based on their roles like finance department, design department and so on. There is a characteristic of procedures to be followed in the interdepartmental interaction and communication. There is a set of designed systems such as committee constitutions, procedure manuals, and official memorandum among others. There are set of procedures and standards for solving crisis and misunderstandings. Appointments into top management are based on an individual’s ability to deliver and performance. The job position has more importance than the holder of the office. According to Nicholls (2011) functions and roles of each office in an organization need to be separated from the person holding the office in order to have clear evaluation of perforce and delivery. This culture might be of importance to PC world considering the allegations of poor customer service. With strict procedures and instructions, it will be easy for the employees to meet the needs of the customers other than relying on personal experiences and preferences on how to deal with the clients. Each employee will have a well defined set of procedures on how they are supposed t undertake their tasks. This will eliminate chances of errors and conflicts with the clients as well as fellow workmates. The top management will also be effective in their job as they will be able to follow up with the delivery of the work by simply analysing whether all the procedures were followed. With role culture, PC World can easily predict market trend as well as performance as the procedures is based on practical parameters. Tasks Often referred to as project team, the culture involves a team working together to accomplish a particular task. The team is primarily made up of experts from a particular area who concentrates on one task. The team might be of a few people in order to ensure proper coordination and integration of skills. In this type of culture, an organization may have several specialized sub groups of experts who when joined together they form a stronger team. The power and influence within the organization are distributed to the teams based on individuals with great competence and experience. PC world would use this culture on specific departments like the technical and engineering department. This is the department that looks into the technical state of the products either those being prepared for sale or even those brought for repair. Such a duty calls for extensive experience ad working with a team creates rich information from each member of the team. This culture can also be used in the sales and marketing team. Working as a team would give the team confidence to themselves as well as potential clients. The fact that this type of culture brings together people who have specialized in their departments means that the team will be more efficient and this will boost the sales of the business. Person This culture puts the whole focus on an individual. If the organization has structures, they only exist to serve the individuals within it. In this culture, a group of individuals may decide to come together and do duties. They are likely to be facilitated by assistant or secretaries. Person culture lacks super-ordinate objectives because each individual works towards their own goal. Person’s culture may not be successful in big organization but rather it would work best with people who are originators and initiators of an organization. The originators may be working on different tasks and may not necessarily need the help of the other person except for backing. This culture may fail in an organization since person culture means that an individual is superior to the organization and does not necessarily need to be controlled by the systems of the organization. This would be an ineffective culture for PC World. There have been cases of employees who were found to be rude to the customers or some members of management who did not want to offer the expected service to the customer as promised. With person culture, the employees are likely to abuse the power and work towards their own personal interests. With person’s culture, it might be difficult for the management to control the employees and even ask them to be accountable to their work. Their performance is likely to be based on personal and individual standards other than organizational based. According to Grimshaw and Baron (2010) the sense of accountability limits the actions of an employee. Whenever an employee knows that they will be answerable to their questions, they tend to work in accordance to the set standards and ensure they do not work any way that may compromise the standards. Reference List Top of Form Grimshaw, J., & Baron, G. (2010) Leadership without excuses: how to create accountability and high performance (instead of just talking about it). New York, McGraw-Hill Professional. Bottom of Form Top of Form Nicholls, C. (2011). Corruption and misuse of public office Oxford, New York Bottom of Form Top of Form Cox, J. B., & Radwan, S. S. (2015). ASAE handbook of professional practices in association management Bottom of Form BPMDS 2013, & Nurcan, S. (2013). Enterprise, business-process and information systems modelling 14th International Conference, BPMDS 2013, 18th International Conference, EMMSAD 2013, held at CAiSE 2013, Valencia, Spain, June 17-18, 2013. Proceedings Berlin, Springe Top of Form Idowu, S. O. (2014). People, planet and profit: socio-economic perspectives of CSR. Farnham, Surrey, UK: Gower Ordóñez DE Pablos, P. (2015) Knowledge management for competitive advantage during economic crisis. Hershey, PA, Business Science Reference \ Top of Form Barnes, D. (2008). Operations management: an international perspective. London, Thomson. Bottom of Form Top of Form Grigoroudis, E., & Siskos, Y. (2010) Customer satisfaction evaluation: methods for measuring and implementing service quality. New York, Springer. Top of Form Wit, B. D., & Meyer, R. (2010) Strategy synthesis: resolving strategy paradoxes to create competitive advantage. Andover, Cengage Learning. Bottom of Form Bottom of Form Bottom of Form PC World Business (2014) About Us Retrieved April 30, 2015, from PC World Business: http://www.pcworldbusiness.co.uk/customer-services/about-us.jtp Top of Form Keillor, B. D. (2012). Winning in the global market: a practical guide to international business success Santa Barbara, Calif, Praeger Gazdar, K. (2007). Reporting nonfinancial Chichester, England, Wiley Schwientek, R., & Schmidt, A. (2008) Operations excellence smart solutions for business success Basingstoke, Palgrave Macmillan Bottom of Form Read More