Understanding the Business Environment
Task 1- The Organizational Purpose of Debenhams Plc
Debenhams Plc is one of the largest and leading clothing and goods retailer organization in the entire world located in the Unites Kingdom. The Debenhams Plc has developed into a large supplier of clothing to the entire world. Currently, is one of the largest organizations in the entire world operating almost 100 department stores own but situated in (England Ricci & Volkmann, 2002, p. 51). In the British market Debenhams Plc, the annual sales produced by the organization contribute to almost 1.3 billion Euros hence enables the plant to become amongst the top five retailers in the entire Britain.
1.1 Identify the type of organization you have chosen and its main purposes
Debenhams Plc was established in the year 1778, and remained an independent operating business activity until the Burton group tool over the management in the year 1980s. However, in the year 1998, Debenhams Plc regained its previous independent status when the Burton Group sidelined it. After Burton Group separated with the Burton Group, it changed the name into Arcadia Group plc. Although the two organizations, Debenhams Plc and Burton Groups were controlled by a single CEO, Hoerner John remained I charge of the new Arcadia Group plc while Green Terry took over the independent Debenhams (Henry, 2008, p. 101).
1.2 Describe the extent to which your chosen organization meets the objectives of its different stakeholders
The Debenhams Plc just like any other organization encompasses of diverse stakeholders that assist in the development and expansion of the firm. The stakeholders play a chief role in determining the extent to which the organization needs to stretch to reach the expected limit. In most of the case, the stakeholders also ensure that Debenhams Plc does not lack enough funds vital in managing the operations of the organization. However, the position of the stakeholder, either internal stakeholders or external stakeholder determines the influence and power in relation to the existence of the organization (Robbins, 2009, p. 136). The internal stakeholders of the Debenhams Plc involves of the board of directors, trade unions and the owners of the company.
The main objective of the internal stakeholders is to ensure that the management of Debenhams Plc is smooth and performing duties to achieve the mission and the vision of the organization. The internal stakeholders also ensure that the organization is making enough profitable returns hence allowing each of the stakeholder to receive a given percentage share (Irvin, 2008, p. 51). The Debenhams Plc meets the achievement of the internal stakeholders in ensuring that the amount of commodities produced and sold makes enough returns enough to be equally distributed. The capital acquired from the sales of the fashion cloth wear also enables Debenhams Plc to manage the needed operations. The external stakeholder in the Debenhams entails of the customers in the marketplaces and the local community (England Ricci & Volkmann, 2002, p. 73). The objective of the local community is to attained employment, which is provided by the organization. The customer’s objective is to obtain new designs in the marketplaces from Debenhams. The organization meets this objective in producing new designs in the marketplaces.
1.3 Describe the responsibilities of your chosen organization and strategies employed by the company to meet them
The legal responsibility of the Debenhams Plc is to ensure that the rules and regulations enacted by the British government concerning the operation of the industries are adhered. Most of the organizations fail to pay tax and other annual tariffs fees expected by the government. Therefore, it is the duty of the management of the Debenhams Plc to ensure that all the government bill and taxation costs are paid in time. The social responsibility of Debenhams to the customer is to ensure that quality fashionable products are delivered to the marketplaces. The local community, the Debenhams Plc indicates the social responsibility in offering donations to the less privileged in the society (GorgenläNder, 2010, p. 139).
Task 2-Nature of the Environment Debenhams Plc Operates
2.1 Explain how economic systems attempt to allocate resources effectively
There is diverse economic system in which the business might operate in to ensure that the customers obtain the product and the business activity obtains profitable margin from the respective sales. In the case of the Debenhams Plc, the organization operates in a participatory economy in which the customers and the clients in the marketplaces definitely determine the rate of production of the products by the demand rate in the marketplaces (Mennen, 2010, p. 80).
The fashion industry unlike the other organization relies mostly on the decision of the customers in the market. For instance, when the fashion is likable by the consumers in the marketplaces, it is definite that most of that fashionable cloth will receive a large demand force. This will automatically trigger to the increase in the production of a large number of the same product. However, in the case of a fashionable trend not accepted in the marketplaces, a small percentage of the customers will purchase hence Debenhams will reduce the production of the same fashionable trend (England Ricci & Volkmann, 2002, p. 98). The other economic system entails of the market economy and the traditional economy.
2.2 Describe the impact of fiscal and monetary policy on your chosen organization and its activities
The fiscal refers to the manner in which the government collects taxation and spending its revenue for controlling the aggregate demand. Monetary policy refers to diverse changes made by the central bank (Federal Reserve System) in terms of the supply of money and regulation of the interest rates to increase and reduce demand (Henry, 2008, p. 151). The fiscal policy affects the Debenhams organization in the sense when the United Kingdom government increases the taxation on the commodities the fashionable products prices increases. This makes it almost impossible for a large population of customers in the marketplaces to be in a position of affording the expensive fashionable products (Griffin, & Moorehead, 2010, p. 142).
However, when the government decided to use its collected revenue in various projects, the rate of taxation decreases hence the price of the commodities also decreases hence making the prices of the fashionable cloth wear affordable for all the people. The monetary policy affects the Debenhams in the sense that when the central bank increases the supply of money the organization incurs losses since most of the clients in the markets will afford the fashionable products with ease. However, when the Federal Reserve System increases the interest rates of the products, fewer consumers will afford the products and at the same time, the Debenhams will make large profits from the minimal sales (GorgenläNder, 2010, p. 120).
2.3 Describe the impact of competition policy and other regulatory mechanisms on the activities of your selected organization
The competition that Debenhams Plc faces affects the organization in diverse ways, which eventually affects the manner in which the firm undertakes it operations. One of the chief competitors of the Debenhams Plc is the Marks and Spenser Group plc, which reduces the number of customers purchasing products from the organization (Mennen, 2010, p. 63). The competition arises in the sense that the two firms produce similar commodities and present to the same marketplaces. Competition in the marketplaces is dangerous since in one way or another it curbs the number of the customers willing to purchase products from Debenhams Plc.
Since the customers that purchase the products converge in the same markets, it makes it almost difficult for the Debenhams Plc to purchase its products within the limited target. However, the introduction of the competition has contributed to the firm introducing other products apart from the dependency on the fashion industry (Robbins, 2009, p. 147). Other regulatory mechanism that affects Debenhams comprises of the increment in the govern taxation, increase in the interest rate affecting the purchase in the marketplaces and decrease in the money supply.
TASK 5-SHORT REPORT
The entire United Kingdom economy faced a downturn in the economy since the year 2008, which affected the manner in which the businesses are conducted. The downturn of the economy in UK changed the economy into negative hence making the entire nation experience a movement from expansion to recession. Most of the business incurred the changes impacted from the downturn, which made it almost impossible for the organization to receive any given profit. The decrease in 0.3% of the entire economy of the UK nation decreased the availability of capital in the entire nation (Irvin, 2008, p. 39). This made it difficult for the customers to purchase commodities in the marketplaces because of lack of funds.
Most of the companies, such as Debenhams Plc that depend on the customers response in the marketplaces to influence the production rate faced challenges coping up with the situation. The downturn in the recession of the UK economy affected almost all the organization even forcing some other companies to collapse (Rusmich & Sachs, 2004, p. 206). Since most of the organizations were used to the stable economy in UK, fewer companies saved capital for the purpose of future constraints that might face the organization. Lack of awareness that problems such as downturn of the economy to the management of most organization contributed to the huge losses incurred.
The occurrence of the recession in UK also affected the salary income of most of the citizens located in the nation. Most of the customers targeted by the Debenhams Plc are the working class, which have the available funds and willing to spend on fashionable design. This means that any aspect that affects the economy also affects the working class employees who at the same time are the chief target market for the Debenhams Plc. The Debenhams Plc lacked purchases in the marketplaces since the amount of commodity produced was less compared to the willing buyers in the marketplaces (Piercy, 2012, p. 162). The distribution of the fashionable commodities and the household products obtained from Debenhams lacked markets with the ability of customers that would purchase the products.
In response to the incidence of the downturn in the UK economy in 2008 and the double dip recession, the Debenhams Plc has placed diverse measures to ensure that its products are still purchased by the customers in the marketplaces. One of the aspects that Debenhams Plc has undertaken to improve on the purchase of its commodities is targeting the untapped customers in the other nations. Most of the people in the entire world love to purchase fashionable products especially the clothe wear, however, lack of suppliers and distributors of such products are minimal. The Debenhams Plc took the advantage and introduced its products to other continents such as Asia and Africa to increase the customers (GorgenläNder, 2010, p. 94). Currently, the margin into the new market has contributed to sales of the Debenhams Plc. The Debenhams Plc has also merged into other markets and investments with diverse products such as purchase of cell phone products to assist in sustaining the progress of the company.
TASK 5- ESSAY
The changes of both the UK fiscal and monetary policy will affect the Debenhams Plc in diverse ways. The changes in the UK fiscal policy that refers to the UK government collection of revenue taxation and spending the revenue affects the Debenhams Plc in the sense that when collecting the taxation, the prices of the commodity offered by Debenhams will increase. Increase in the price will definitely affect the number of the customers willing to purchase the products from Debenhams Plc (Allen, 2005, p. 188). Most of the customers since prefer purchase of products from a cheaper price, increasing the taxation rates through the fiscal policy will decrease the willing clients capable of purchasing the products. This definitely means that Debenhams Plc will incur huge losses since most of its product will not be purchased in the marketplaces.
However, when the time the government will be spending the revenue, the rate of taxation will decrease hence the price of the products from Debenhams Plc will be customer friendly. This means that the customers will afford the commodities. This will increase the demand of the commodities and services provided by the Debenhams Plc in the marketplaces hence contributing to increment in revenue returns (England Ricci & Volkmann, 2002, p. 141). In the case of the monetary policies, the Federal Reserve System influences the manner in which the money is circulated in the UK nation hence affecting the interest rates of the Debenhams Plc.
The central bank when it reduces the supply of funds to the people, the customer will automatically lack money to purchase the products of Debenhams Plc. This means that the demand will drop hence affecting the production. The increase in the interest rate also negatively influences the Debenhams Plc since the prices will increase which will discourage the customers in the marketplaces from purchasing the products (Rusmich & Sachs, 2004, p. 191). The changes in the international market also affect the Debenhams Plc especially when the government policies of most nations enact government policies that encourage high taxation rate. The Debenhams Plc receive minimal returns since most of the income from the product will compensate for the high taxation rates in the diverse nations (Mennen, 2010, p. 196).
In relation to the changes in the fiscal, monetary policies and the international changes in the environment, Debenhams Plc would way out the situation and produce minimal products when the demand in the marketplaces goes down. In the case of the international trade whereby increment in taxation on the products sold to foreign nations, the Debenhams Plc might decide to purchase the products in euro to gain profit from other nations weak currency (GorgenläNder, 2010, p. 88). The Debenhams Plc would also use the currently of the respective government and increase the prices in accordance to the taxation policy.
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