Blacks Leisure Group - PESTLE Analysis - Case Study Example

Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Instructor Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Abstract This report aims at determining the key issues threatening the corporate reputation of black leisure group this will be addressed with a targeted public relations campaign. So as to achieve these there will be a brief examination of the company business and its position within the industry, the report will also identify how communication/ public relation function is currently managed in black leisure group. The report will also identify the key issues that are likely to affect the company’s position within the industry in the next twelve months and their implications in terms of how they affect the company reputation and its relationships with the key stakeholders. The report will also identify the likely role that public relations can play in helping to resolve the various issues satisfactorily. Introduction Blacks Leisure Group plc is termed to be among the best retailing outlets in the UK. Black leisure group mainly deals with the outdoor retails and mainly deals with clothing and equipment for the outdoor such as camping and skiing and it also supplies clothing such as berghaus and north face. The company has a large number of store outlet which operated under either company owned or managed retail chain. The company has a sports and fashion division which operates one hundred and fifty two store chain, twenty four average chains. The company has recently introduced a new concept which is referred to as the pure women and it’s the initial endeavor to aim in ladies skiwear (Black leisure website, 2011). The company also operates its initial division that is the outdoor division and this division has the initial store format. The outdoor division is comprised of around forty three stores. SWOT Analysis SWOT analysis is basically used so as to assess the strengths, threats, opportunities and weaknesses of a particular organization. A careful and considerate determination of the internal and external environment of a business is a vital factor in the premeditated planning process. A scan of the internal and external environment is an important part of the strategic planning process. The environmental factors which are within the firm are the ones which are classified as both strengths and weaknesses while the environmental factors that are from the outside world that is outside the firm are termed as both opportunities and threats (Fine, 2009). The strengths of a firm are the resources and competence that can be applied so as to gain a competitive advantage from the competitors. In regard to the strengths black leisure group has a number of strengths which assists it in gaining a competitive advantage in the market place. One of the major strength of the company is the company specialization in manufacturing branded clothes and footwear. Most customers and the media have an exceptional interest in cloth plan and culture this has ultimately led to a high demand for the branded clothes designs as compared to the unbranded clothes and shoes. This is an advantage to black leisure group as compared to the other companies which manufacture clothes and footwear that are not branded. Another strength of the company is the fact that clothes and footwear are termed as been basic necessities in most families thus despite the fact the most families are cutting on their cost of spending they will still purchase the footwear and clothing from black leisure. Strengthening at the global level is another strength associated with Black leisure group thus been a competitive advantage in the company. Thus the aspect of strengthening at the global level plays an important role in the company and it cats in augmenting the sales of the company. Weaknesses of a company on the other hand deals with aspects which are concerned to the lack of certain strengths. One of the major weaknesses is the lessening of domestic industrialized capability this has made the possibility of revival in the future improbable thus this is a major blow to black leisure group. Another major weakness that is affecting black leisure group the reduced level of spending most families are therefore opting to spend less on clothes and footwear and if they are to purchase they tend to purchase commodities of lower prices. Opportunities are factors that may expose convinced new possibilities for earnings and expansion for the company. One of the major opportunities of the company is the augmented customer attention in branded clothes and footwear which have been branded with the designer names. This has created an opportunity for the company in that it has increased the number of customers purchasing their products and also creating a better opportunity for brand loyalty. Another opportunity to the company is the sustained augment in women working permanently and with demanding leisure way of life will generate a more level of demand for additional first-class garments to ensemble exact events. Another hostile opportunity is the fame of men’s magazine which has revealed men’s clothing and aided a great deal in the gaining of superior attention in grooming in the globe. Threats are termed as any adjustments in the external environment that is likely to inflict a danger to an organization. One major threat of to the company is the introduction and importation from other countries which while pooled together with a propensity to price cut greatly in the UK pretense an everlasting threat to Black leisure group. The budge of shopping outing from high street shopping outlets to out of town outlets and also home purchasing has also been a major thereat to the company. With this budge the number of customers purchasing blacks clothes and footwear are likely to decrease thus making this a major threat to the company. Pestle Analysis PESTLE analyses mainly deals with the analysis of the environmental, political, economic, technological, social and legislative factors that are likely to affect environment of the company. The political, legal, economic, social, and technological and environmental factors taught have an impact on black leisure group (Bensoussan & Fleisher, 2008). Political According to Haberberg and Riepe (2001) is termed as a major determinant of what the company can do and what they can’t do. Most political aspects manipulate the business in cases such as the utilization of subsidiary in case companies want to expand globally, the legislation and rules that are applied in easing up international trade. Ironically, the involvement of both political and authorized factors in most instances augment costs in an organization and it can also add value to the organization. Black leisure group products are mainly marketed and sold in the United Kingdom. The United Kingdom has a steady political setting thus it seems like a favorable place for the company to trade its cloth wear and footwear commodities. Social Dress codes have since times in memorial mirrored social change. Nevertheless, individuals dress in a way that is essential to how they the look upon them, clothing is not dictated upon by the fashion or the clothing companies available. Based on the social feature, black leisure group clothing and footwear affirm themselves in most races, lifestyle, age and religion and it is commonly intertwined with extraordinary designs in almost every new commodity they make. With the companies augmented focus on manufacturing leisure products they tend to be larger group of people who might purchase the companies products. Another foremost social trend has been the concentration in leisure this aspect has made it possible for skiing wear to dictate leisure market. Technological With the augmented boom in the customer preferences in skiing wear and the demand clothes and shoes to suit the current way of life, these has led to the advancement in the technology used in manufacturing these products. The raw materials which are used in making the casual clothes are fragile and make the clothes to have pleasing appearance thus making the garments appropriate for most occasions. Black leisure group have incorporated various kinds of technology in their industry sob as to manufacture quality products. One of the major areas that they apply technology is when they purchase machinery which aid a lot in quicker, easier and cheaper manufacturing. Black leisure group are always trying at making new products with new and exclusively designed to precise activities for example the skiing clothes. Black leisure group uses the internet technology to market its products. Environmental factors Black leisure group have an environmental impact owing to the venomous substances which are used in their manufacturing sector these substance in most cases may cause harm to humans and they may also damage the environment. Another environmental factor is the waste which is as a result of the use of fibers which are used in making clothes and shoes by black leisure group, these products at the end results in huge disposal products. Another environmental factor is the discharge of compounds in form of waste water such as in wet pre-treatment, coloring, finishing and laundry and it has been a main risk to water based life. Legal issues Most companies view legal issues as vital aspects to the operating of a business since the rules plays an important role in deciding on how organizations are supposed to conduct business. Every business entity is supposed to adhere to the rules or in addition they will suffer a greater cost inn the long run.teh company ought to adhere to the consumer protection and trade descriptions. Another legal issue is the adherence to the sales and supply act. There is also another act that ensures that everyone in the market has unfair and it is termed as the equality act (Kotler, 1999). Economic factors The UK economy has opposed any recurring tendency back into downturn. Various aspects of the economy have in one way held up GDP growth. In the meantime customary industries have led to the sustained to decline amid the clothing and Footwear Company such as black leisure group. In terms of economic aspects, black leisure group has helped in the decrease of joblessness in the country thus augmenting the monetary status of the country. Company’s Financial Position Company’s Financial Situation Financial situation in general refers to the status of the financial position statement i.e. the balance sheet that contains the assets, liabilities and the owner’s equity of an organization and the statement of income that summarizes the income and expenditure items. Black leisure group financial position depicts that the company is in a lot of chaos in that it owes a lot of money and there is a possibility of the downfall of the company if new measures are not implemented. The company poor financial position is evident due to the fact that the company was largely dependent on the Christmas sales made by the company. Blacks Leisure Group plc Income Statement Feb 11 Feb 10 Feb 09 Revenue 325.3 366.4 360.1 Cost of Goods Sold -- -- -- Gross Profit 325.3 366.4 360.1 Gross Profit Margin -- -- -- SG&A Expense -- -- -- Depreciation & Amortization -- -- -- Operating Income (4.0) (58.2) (6.5) Operating Margin -1.2% -15.9% -1.8% Non-operating Income -- -- -- Non-operating Expenses -- -- -- Income Before Taxes -- -- -- Income Taxes -- -- -- Net Income After Taxes 0.0 0.0 0.0 Continuing Operations (8.8) (75.3) (21.0) Discontinued Operations -- (0.0) (0.0) Total Operations (8.8) (75.3) (21.0) Total Net Income (8.8) (75.3) (21.0) Net Profit Margin -2.7% -20.6% -5.8% Diluted EPS from Total Net Income -- -- -- Dividends per Share 0.0 0.0 0.01 Adopted from Hoovers TM: A D & B COMPANY http://www.hoovers.com/company/Blacks_Leisure_Group_plc/rftkrti-1-1njea5.html Adopted from Hoovers TM: A D & B COMPANY http://www.hoovers.com/company/Blacks_Leisure_Group_plc/rftkrti-1-1njea5.html The income statement analysis The revenues increase from the year 2009 to 2010 but later diminish significantly in the year 2011. The gross profit basically resembles the trend in revenues. The company experiences a negative operating cost and a negative margin. For the three years, the company yields zero net profits and a negative profit margin. The zero net profits results to a zero dividend per share. For the three years, 2010 has experienced the worse income situation. How the communications/ PR function is currently managed within the company PR is all about enhancing relations to advance uphold and promote the status of the company (Seitel, 2006). Through the application of public relation an organization is able to convey the intended message. Public relation in black leisure is handling appropriately keeping in mind that the customers are always right (Brassington, & Pettitt, 2006). Issues that may affect the company in the nearest future There are certain issues that are likely to affect black leisure group and its reputation in the future. On the major issue that is likely to affect the company is the survival of the company (Prahalad & Hamel, 1996). Black leisure group is fighting for its survival since it was warned that due to the breach of loan agreement contract which was signed by the company. The loan accord is between black leisure group and Lloyds banking group. According to the bank the company ought to come up with a plan to solve the issue. Also the company will struggle to survive due to the growing competition from its competitors and also due to losses which are incurred when there is poor weather and a decreased level of spending. The issue of the survival of the company has attracted the media attention. For example according to an article published on 25th November 2011 in the guardian newspaper the company was struggling to survive and they also needed a extra amount of money for it o be in operation. Another issue facing black leisure group is finding a buyer for the company. Based on the financial difficulties been faced by the company, the company have opted to sell some of their brands so as to be able to survive. Thus the company faces a difficult of finding the most suitable buyer of the company. The search for the sale of the company has attracted a lot of bidders and at the same time it has attracted the media attention for example the guardian newspaper reports of the possible sale of black leisure group. According to the newspaper the company has opted to sell the company in its last attempt to hoard the companies collapse. And lastly another issue is that is facing the company is how the company can be more socially active within the media as they are clueless, to get the spotlight of them as it have been the attention of going bankrupt for about a year. Black leisure group ought to generate idea to help the company in becoming more socially active so as to shun away negative media attention. The company ought to be more socially active so as to win more customers and supporters in the industry. This issue has attracted a lot of media attention and the media reports that there is a high possibility of the company going into bankruptcy. Key stakeholders in the issues facing the company The survival of most organizations centers on effectual public relations and communication management. Managers are among the stakeholders involved in terming the survival of the business (Wilcox & Cameron, 2008). A business survival significantly relies on the choices made by the company executives. The management team at black leisure group is the main stakeholders who will be involved in solving the issue associated with survival of the business. Managers in the organization play an important role in that they enable the company to make choices for its future development thus with the right management the organization will tend to make clear and concise decisions to enable its survival. The main stakeholders in the issue related to sale of black leisure group are the shareholders within the organization. This is mainly du to the fact that shareholders of an organization play a major role in determining how the company will operate. The public relations department is the main stakeholders in the issue related to been more socially active. The public relations department will play a major role making the company more socially active these can be done by undertaking projects within the community. Recommendations This section of the report will make recommendations to the senior management about the role public relations can play in assisting the company to resolve the issues in the company satisfactorily to protect and enhance its corporate reputation. Public relations when applied effectively in Black leisure group can be used to solve the major issues affecting the company that is the survival of the company, finding a buyer for the company and how the company can be more socially active within the media as they are clueless, to get the spotlight of them as it have been the attention of going into bankruptcy for about an year. The main issue to be addressed in the report is the survival of the company in the next twelve months (Dess, 2009). The management of black leisure group will implement an inclusive public relations plan so as to ensure the survival of the business. The objective of the promotional efforts will be to: Augment affirmative credit, interest and hold up for black leisure as the leader and also in the offering of high quality cloth wear and foot wear. recognize sensible timelines to attain the preferred goals Make certain that the business survives (Kotler & Armstrong, 2005). The application of PR policies will assist a lot in solving the issue associated with the survival of the business. The target audience will be mostly the customers who are more concerned with buying the commodities which are branded. These will mostly comprise of parents living in the United Kingdom and who have a salary of $ 100, 000 in a year. The messages to be conveyed in the use of the media will include messages that highlight the quality of goods produced by black leisure so as to ensure the sustainability of the business. Another target group is the ladies who are working this will be mainly attributed to the fact that more ladies are in a permanent employment and they need to dress well. The target audience will be reached to by the use of print media such as newsletters and also by the use of the internet, brochures and campaigns. The table below shows the schedule of the activities that will be carried out so as to ensure the survival of the business. Schedule Activity Start date Finish date Period Newsletter January March There newsletters will be produced monthly Internet April June Messages will be sent on a daily basis Brochures July September Will be developed on a weekly basis Campaign October December Will be conducted as the final The estimated budget for that the company will spend is clearly shown in the table below. Budget Activity Cost Newsletters $ 5,000 Internet $ 3,000 Brochures $ 4,000 Total $ 12,000 The campaign will commence, which will be followed by press releases and newsletters and brochures and also the internet will be used to some extent. The Program of public relations to solve to address the issue is the use of campaigns which will involve the use of about $ 12,000. Proposed means by which the success of the program will be evaluated After the implementation of a certain program there ought to be certain measures to be implemented to evaluate if the program was effective and if it did achieve its objectives. The success of the program will be evaluated by the way the business will perform some few months after the plan is implemented. Also it will be evaluated based on the increase in the number of customers who will purchase the products in the next few months and new customers who will visit the company to purchase the skiing wear. Bibliography Bensoussan, B. and Fleisher, C., 2008. Analysis without Paralysis: 10 Tools to Make Better Strategic Decisions. New Jersey: FT press. Black leisure website http://www.blacks.co.uk/home.html Brassington, F. and Pettitt, S., 2006. Principles of Marketing. New Jersey: Prentice Hall. Dess, G. Lumpkin, G. Taylor, M. and Lal, D., 2009. Strategic Management. McGraw-Hill Publishing. Fine, G. 2009.The SWOT Analysis: Using your Strength to overcome Weaknesses, Using Opportunities to overcome Threats. Create space publishers. Kotler, P. 1999. Kotler on Marketing: How to Create, Win, and Dominate Markets by Philip Kotler.free press. Kotler, P. and Armstrong, G., 2005. Principles of Marketing. New Jersey: Prentice Hall. Prahalad, C & Hamel, G., 1996. Competing For the Future. Harvard Business Review Press Seitel, F. 2006. Practice of Public Relations. New Jersey: Prentice hall Wilcox, D and Cameron. G., 2008. Public Relations: Strategies and Tactics. Allyn & Bacon. Read More