Report to Caifu Investments Ltd - Essay Example

It is noteworthy that both the company are strong competitors in the apparel industry of the United Kingdom. Since both the companies operate in the global retail industry, it is natural to assume that external environmental factors will affect both the companies in similar manner. These factors are: Advanced technology: Rapid technological development has profound transformation effect on the retail industry at global level. The exuberant adoption of mobile digital technologies such as tablets and smartphones in retailing has influenced consumer behaviour as well.

Technological development has become a source of competitive advantage and differentiation. Advancement can be observed in terms of increasing implementation of QR (Quick Response) code, self checkout systems, digital advertising displays, smart kiosk and electronic price tags (Krafft and Mantrala, 2010). Product Life Cycle: The retail industry of the UK has reached the mature phase of its life cycle; as a result, high street shopping is declining at a rapid rate. Since 2000, approximately 25000 stores have been closed and around 183 retail brands disappeared from the market in 2011.

E-commerce, high product diversification and recession are being considered as some of the contributing factors (Marketline, 2013). Competition: the competition in the industry is relatively high and considering the extensive diversity maintained by most contemporary retailers, the degree of rivalry has increased tremendously. Consumers have variety of choices but with limited purchasing power, retailers are losing significant share of the deserving profit (Marketline, 2013; 2014). Consumer behaviour: Thomas (2013) suggested that consumer buying behaviour in UK as well as in the world was largely affected by the recession.

Consumers have changed their purchasing behaviour significantly. For majority