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Impacts of Macro Environment in Debenhams

Today’s business environment is very modern, challenging, and unpredictable. The business organizations need to prove their importance and expertise in their respective sector every now and then. They have to make them capable of doing better and performing even great compared to their competitors and rise above the challenges and drawbacks of the environment (Britton, 2018). Debenhams is also one of the largest departmental stores in the United Kingdom who are trying to make their identity permanent and well known in the business market. The company has ensured its presence in most of the major cities and towns and its brand name is considered to be one of the most recognizable British brands. Here the paper will focus on their environmental condition and their overall leadership and motivation strategies.

Impacts of Macro Environment in Debenhams

Macro Environment of Debenhams

The macro-environment is the broader context of the business environment. It indicates the environment within which a company performs its commercial operations and other functions. It is the fundamental guiding factor to affect the overall market conditions based on nature, kinds of people, society, culture, lifestyle, governmental roles, economical condition, and use of technology in the business (Britton, 2018). Basically they are the major external and uncontrollable factors that can influence organizational decision making, its performance, and strategies in the long run.

As Debenhams is one of the oldest multi-channel departmental stores, the company expanded through a series of mergers and acquisitions. But recently the company is facing some drastic fall due to their three critical decision-making issues based on their macro-environment factors (Spencer and Scheuer, 2002). Here the impacts of macro environment in Debenhams business are given below:

Impacts of Macro Environment in Debenhams

The factors which are affecting the macro environment of Debenhams are- Economic, Demographics, Legal, Political, Social factors, Technological changes, and Natural factors. All of these factors are affecting the organization adversely and making their condition worse day by day. All of their impacts on the organization are:

Demographic and Technological Factors

The demographic factor considers the characteristics of the population like age, race, income, etc. Technological factors consider the technological changes and advancement. Here, The Company could not keep in touch with the rapid changes of the fashion trends. If considering the fact of demographic factors, it could be assumed that changes in demographic structure will change the fashion trends, and this is where Debenhams has failed to find out the impact of demographic factors. Meanwhile, the product of Debenhams has been considered an outdated fashion. Though they were giving tough competitions to their main rivals such as John Lewis. They have lost the track of the fast track changes of fashion statements. Not only did Debenhams failed to predict the changes but also they lack in responding to the change and learn from their errors consistently and they also cannot link up the factor of socio-cultural aspect because in this factor lifestyle has great influences on the changes of fashion trend. (Canada. Industry, Trade and Commerce, 1980). The company also failed to maintain its own traditional brands and establish a clear brand image among its customers. So the changes in natural forces and technological impacts of the macro environment impacted the business adversely.

Geographic and Natural Factor

Debenhams was quick in expansion plans. But the company failed to read the situation and changes in the overall condition of the expansion plans many times because they cannot concentrate on the factor of a geographic factor of the macro environment. Their Birmingham store was considered to be a costly mistake which led them to their current financial crisis, but that could not have happened if they have the proper knowledge and research on the geographical segmentation to open a store on geography wise (Turturean, 2014). This is happened because of the changes in the geographic and natural forces of the macro environment.

Economic and Social Factors

The economic and social factor of the macro environment is the way of predicting a country’s overall condition of the economy. How people of UK socially and culturally behaves. The companies frequent discount sale approach is hampering their sales and according to one of their experts reported that customers are used to getting goods at a very low price at the time of sale. So they used to hold off buying until any sales up. So the demography, social factors of the macro-environment affected their business (Canada. Industry, Trade, And Commerce, 1980). The business operation was designed in such a way that customers get used to it.

Legal and Political Factors

The legal and political conditions of the country can affect the business environment. Here, Debenhams physical expansion plans brought soaring costs that have and many brick-and-mortar retailers. Their prime-sited large properties came up with big rents, high rates, and many lease liabilities and here economy factor must have a great impact (Turturean, 2014). They also had large staffing needs and leases. All of the operations were hard to give up. So overall they could not adapt to the fast-changing retail environment of the business.

References

  1. Britton, I. (2018). BUSINESS ENVIRONMENT : a global perspective.Place Of Publication Not Identified], Pearson Education Limited.
  2. Industry, Trade, And Commerce (1980). The Business Environment.Ottawa: Government Of Canada, Industry, Trade, And Commerce.
  3. Ciuriak, D. (2015). Macro-Structural Linkages and Business Dynamism. SSRN Electronic Journal.

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