Your group is part of the management team of one of the best-known businesses in
Bloemfontein, namely The Herholdts Group. Through the years, this business has evolved
from being a one-store business to having multiple stores across South Africa.
1.1 Do an environmental analysis of the external business environment and indicate how
the factors in 1.1.1 and 1.1.2 affect the Herholdts Group. You will have to research
the company online before you can do the environmental analysis. You need to
identify the chosen factor clearly, explain the effect on the Herholdts group in words
(a theoretical answer will not suffice) and provide physical proof of how you
concluded the effect/impact.
1.1.1 Two (2) market environment factors
1.1.2 Three (3) macro environment factors
1.1.1 Market environment factors:
1. Competitive rivalry: The competitive rivalry in the retail industry, specifically in the home appliances and electronics sector, is high. There are multiple players in the market, offering similar products and services which leads to price wars and aggressive marketing strategies. This affects the Herholdts Group as they need to constantly innovate and differentiate themselves from competitors in order to maintain their market share. Physical proof of this can be seen in the various advertisements and promotions run by competitors in the same industry, as well as customer reviews and feedback comparing different retailers.
2. Consumer behavior: Changes in consumer behavior, such as the shift towards online shopping and the preference for more sustainable and eco-friendly products, can impact the Herholdts Group. They need to adapt to these changing trends and offer products and services that cater to the evolving needs and preferences of their target market. Physical proof of this can be seen in the increase in online sales for the company, as well as any changes in product offerings to align with sustainability goals.
1.1.2 Macro environment factors:
1. Economic factors: Economic factors such as inflation, exchange rates, and economic growth can affect the purchasing power of consumers and their willingness to spend on non-essential items. This can impact the Herholdts Group's sales and profitability. Physical proof of this can be seen in financial reports and sales figures during periods of economic downturn or instability.
2. Technological factors: Rapid advancements in technology impact the way businesses operate and interact with customers. The Herholdts Group needs to stay current with the latest technological trends, such as online shopping platforms, mobile apps, and digital marketing strategies, in order to remain competitive in the market. Physical proof of this can be seen in the implementation of new technologies in-store, as well as any digital marketing campaigns run by the company.
3. Environmental factors: Increasing awareness of environmental issues and the push towards sustainability can impact the Herholdts Group's operations, from sourcing sustainable products to reducing carbon footprint. Consumers are more inclined to support businesses that prioritize environmental responsibility. Physical proof of this can be seen in any sustainability initiatives or green credentials that the company promotes, as well as customer reviews and feedback highlighting their commitment to environmental causes.