PESTEL: 1. Political: “issues affecting our international vendors could materially adversely affect our business and financial performance.”(Page 8.) Big Lots, INC. is currently a discount retailer in the US. Though, the company is not international, they are however, impacted by international political risks. Some of these risks include: loss of most favored nation trading status, political unrest, war, trade restrictions, more restrictive quotas, political instability, and increased import duties. Due to the fact that 24% of their merchandise is purchased from overseas vendors and a significant amount of the merchandise purchased domestically is manufactured abroad, their company can be greatly impacted. This could potentially affect their business and financial performance. 2. Economic: “Our business and financial performance may be adversely impacted by current and future economic conditions” (Page 10.) Big Lots, INC. can be directly impacted by the health of the economy. For example, declines in general economic conditions, disposable income levels, and other conditions could lead to reduced consumer demand for the company’s merchandise, thus affecting their revenues and gross margin. Other Current and future economic conditions that can affect the industry are consumer financing, unemployment levels, interest rates, recession, and inflation. Specifically, when disposable income is negatively impacted, the Soft Home, Hard Home, Home Décor & Furniture, and Seasonal
Political: this inturns the legislation and government rules of the country that may influence and pose as a threat to the business,
Best Buy Co., Inc. is a multinational company in the United States and it deals, with consumer electronics, and accounts 19% of the business. The company also operates in Mexico, Puerto Rico, China, and Canada. Some of the subsidiaries of the company include CinemaNow, Geek Squad, Pacific Sales, and Magnolia Audio Video and operates in both Future Shop label, and Best Buy in Canada. Best Buy Co. Inc and its subsidiaries operate more than 1,150 stores internationally and domestically. The company also operates more than 100 “ZoomShops” or Buy Express Automated retail Stores, operated by the Zoom Systems, in both malls and airports in the entire country of the U.S. The company is headquartered in Richfield, Minnesota, U.S (Scott,
Political –how changes in government policy might affect the business, like a decision to subscribe building new houses in an area could be good for a local brick works.
Strategic planning is essential prior to any individual or company deciding to engage in international business whether as direct/indirect investment or through trade. An evaluation of risks should be considered and strategies developed accordingly prior to any potential investment in a foreign country. One such risk which requires consideration is political risk i.e. "governmental or societal actions and policies, originating either within or outside the host country, and negatively affecting either a select group of, or the majority of, foreign business operations and investments."
Item 7.| |MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS| | |25| |
(iii) Decreasing financial rate. The financial rate is less and less year after year. It is a problem for the company. (iv)Too many fields Dobbies refers to. There are many fields Dobbies has its business on. Dobbies' main activity is horticulture, but it also stretch to foods, restaurant, ect. It will bring the company more risks.
Future profitability of the company cannot be ensured because the business is highly dependent on economic conditions
By basing their sales on closeout or discounted prices, Big Lots, Inc. has several competitors. Big Lots competitors are basically any discount store that advertises their products at a low or discounted price. Some of their main competition comes from retail stores, such as Dollar General, Family Dollar, Fred’s Dollar Store and Ollie’s. Although Big Lots’s main competition may come from companies that sale general merchandise at a discount price, they also have to compete with stores that sale food products, arts and crafts and furniture items, such as Target and Wal-Mart as well (Form 10-K,
One of the largest examples of a technological privacy violation in history was the Target data breach of 2013. The Target Corporation is one of the leading innovators of the retail industry. They introduced the concept of designer partnerships, making them one of the leading clothing stores in the country (Corporate Target 1). Unfortunately, the company was targeted by Russian hackers shortly before the Christmas of 2013. In this hack, personal information, including customer names, mailing addresses, phone numbers, email addresses and credit card information, of seventy million people was stolen and used for fraud (Forbes 1). This has raised concerns over how well the company can ensure that their consumer’s privacy is protected.
P1 – Explain the effects of changes in the economic environment on a selected business.
For this research assignment, I chose Big Lots. The reason I decided on Big Lots is primarily, because I am very interested in home decorating and in High School I lived very close to a Big Lots store, so I shopped there often. While in college, I moved from campus to my apartment and I visited them quite a bit. In this paper I’ve described the history, retail strategy, and competitive advantage of the Big Lots store I researched.
Big Lots is a company known for its ability to bring big closeout deals to its customers. Over the course of thirty years, they have helped shape the discount retail industry. Due to their constant and massive growth, there are many Big Lots jobs available.
Best Buy, a familiar retailer in the technology world, is struggling to stay on top. Online and mass stores have cornered the market in terms of convenience, customer service and price matching. The recent closing of over two hundred stores alongside falling sales has experts predicting that the giant won’t be in business long. Using a results-only work environment (ROWE), Best Buy has removed the customer from the equation and forced many employees out. A marketing disaster, Best Buy must change its marketing strategy from sales-based to a customer-based to stay afloat.
"That could require us to change our pricing, advertising or promotional strategies, which could materially and adversely affect our results of operations or the brand identity that we have tried to create."
1. Political risk and country risk are challenges that must be strategically considered by multinational firms. What is one real-world firm that deals with political and country risk?