Operating Situation and Competition of UK Department Stores Sector - Term Paper Example

The paper "Operating Situation and Competition of UK Department Stores Sector" is a brilliant example of a term paper on finance and accounting. The analysis of a business’s internal and external environment and the factors prevailing within allows the management of the business to make beneficial decisions in the favor of the organization. The basic purpose of this paper is to carry out a performance analysis of selected businesses. In this case, the selected businesses are Debenhams Plc., John Lewis Partnership Plc., and Marks & Spencer. These three businesses operate in the retailing industry with a business format based on the departmental store. The analysis of these three businesses has been based on internal and external analysis; the external analysis, which also includes an evaluation of the industry in which these companies operate, has been carried out by using Porter’s five forces model and PEST analysis. On the other hand, internal analysis of the businesses has been carried out using their respective SWOT analysis, financial information, and non-financial performance measures. Therefore, the objectives of this paper are:

• To conduct a strategic analysis of the chosen departmental stores in the UK;
• To conduct a financial performance analysis of the chosen departmental stores in the UK; and
• To conclude which of the three chosen companies is best on the basis of strategic and financial analysis.

Before going into the details of the analysis, the rationale for choosing the industry and companies under analysis in this report has been presented.

2.0 Rationale for industry choice

Consumption is one of the troikas that promote the growth of GDP. It has significant impacts on the growth of the economy. According to BBC News (2013a), consumer spending accounts for about two-thirds of the UK's economic activity and thanks to its growth, the UK economic growth in the third quarter is 0.8%, which is the fastest pace for three years. A large of this consumer spending is accomplished through department stores.

Mintel (2013a) does the research and finds that over three-fifths of shoppers enjoy looking around department stores. In addition, this industry is varied, widely distributed, fragmented, multi-channel, and low barrier, which makes it attracts and provides large of UK employments (Johnson et al, 2010).