Business Culture & Strategy 1. External environment EXTERNAL MACRO POLITICAL ENVIRONMENT “Tied House’ system had been broken – the number of pubs which a brewer could operate has been limited” – Companies have been forced to choose between brewing and retailing, which resulted in selling brewing operations or chains of public houses and hotels. ECONOMIC ENVIRONMENT “Supermarkets began selling drinks at loss-leader prices” -Supermarkets become competitors to other pubs by selling drinks, particularly premium larger, at cheaper prices and encouraging customers to buy them. SOCIAL ENVIRONMENT Government concern about binge drinking and anti-social behaviour” -Pubs have bad publicity by binge drinking and the consequent anti-social behaviour of customers, especially in city centres, the busiest places. TECHNOLOGICAL ENVIRONMENT “Installed TV and sound systems in pubs” -Majority of pubs have installed TV screens and sound systems, especially to show football matches. EXTERNAL MICRO CUSTOMERS “Customers with families want to dine out together” – Pubs now have a dedicated family area, which is restricted and limited to meal times only. Children are not allowed in the bar areas, which work good with the rest of customers.
LOCAL GOVERNMENT “Change in smoking law” -Smoking inside the buildings has been banned in whole industry. All pubs have to comply with law and they cannot have smoking areas inside their pubs. All smoking areas have to be outside the buildings. INTERNAL AUDIT HUMAN RESOURCE AUDIT “Involvement and communication with managers and staff” – JD Wetherspoon places great importance on listening to, acting on and receiving feedback from members of staff on all aspects of the business. All companies trying to motivate their staff to work by offering different benefits, providing training and meetings. PHYSICAL RESOURCES AUDIT Size and location of premises” – Majority of JD Wetherspoon pubs are located in city centre in high streets, where are visible and easy to find. All organisations try to be fairly large in order to provide the atmosphere and facilities for customers. FINANCIAL RESOURCE AUDIT “Slowed down in sales and profit growth” -Companies figures shows that sales and profit slowed down in last years. There is a risk of sales and profit falling down in the next years. OPPORTUNITY EXTERNAL MACRO – POLITICAL “Tied House’ system had been broken – the number of pubs which a brewer could operate has been limited”
Why is it opportunity? The company as a new retailer can bring new customers to pubs. THREAT EXTERNAL MACRO – ECONOMIC “Supermarkets began selling drinks at loss-leader prices” Why is it threat? – The company might lose many customers, who will prefer to buy cheaper drinks and drink them at home instead of buying them in the pub. THREAT EXTERNAL MACRO – SOCIAL “Binge drinking and anti-social behaviour”” Why is it threat? – The company might lose money for repairing damages and good customers who will be scared to come again to the pub after seeing anti-social behaviour. OPPORTUNITY
EXTERNAL MACRO – TECHNOLOGICAL “Installed TV and sound systems in pubs” Why is it opportunity? – Customers prefer sitting in pubs during football matches with other people, which increase sales and make nice atmosphere in the pub. OPPORTUNITY EXTERNAL MICRO – CUSTOMERS “Customers with families want to dine out together” Why is it opportunity? – By nice atmosphere and place to seat with children, families will go dine out more often, which will make bigger profit for organisation. THREAT EXTERNAL MICRO – LOCAL GOVERNMENT “Change in smoking law” Why is it threat? – J D Wheterspoon might lose its customers.
If the organisation will not prepare a smoking areas, customers, who are smoking might go to other pubs. STRENGTH INTERNAL – HUMAN RESOURCES AUDIT “Involvement and communication with managers and staff” Why is it strength? – The organisation has better communication with staff and managers and also they gain knowledge about staff needs for development and training. It leads to better morale and lower staff turnover. STRENGTH INTERNAL – PHYSICAL RESOURCE AUDIT “Size and location of premises” Why is it strength? – Good location and bigger size of premises will bring more customers into the pub.
They can more often come in for a dinner or for a drink in the town. It is also easier to meet with friends in the city centre. WEAKNESS FINANCIAL RESOURCE AUDIT “Slowed down in sales and profit growth” Why is it weakness? –The J D Wheterspoon cannot open as many new pubs as they have planned, which will bring less profit than it was planned. LIST OF INSTRUCTION FOR DEVELOPING A SWOT: 1. TO IDENTIFY OPPORTUNITIES AND THREATS YOU NEED TO ANALYSE EXTERNAL ENVIRONMENT BY USING “PEST FACTORS” 2. TO IDENTIFY STRENGTHS AND WEAKNESSES BASED ON FIRM’S PAST OPERATIONS, ANALYSE INTERNAL AUDIT 3.
STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS CAN CHANGE AT DEPENDENCE OF TIME 4. SWOT HAS SOME SUBJECTIVITY, THEREFORE WHEN YOU ARE INTERPRETING A DATA, YOU HAVE TO BE VERY CAREFUL 5. REMEMBER: SWOT ANALYSIS HIGHLIGHTS THOSE FACTORS, WHICH HAVE TO BE CONSIDERED! IT IS NOT A PART OF ORGANISATION’S STRATEGY 6. ORGANISATION DOES NOT HAVE TO FOCUS ONLY ON WEAKNESSES OR THREATS WHEN ANALYSING SWOT. THEY CAN TAKE ACTION ON ANY OF THEM OR MORE IF THEY NEED IT. 2. Organisational Culture CORPORATE CULTURE It is the feel of the organisation, the way people act and behave towards each other and the way things get done.