Introduction: The Internal And External Factors Which Impact Harrods
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- Harrods is the most famous department store which is operated in London. In the year 1849 the company has opened its first store on Brompton, which is a departmental store.
- The department's store offers a wide range of innovative products and services to its customers.
- Their vision is to design luxury and unique experiences for their customers (Harrods, 2022).
- The presentation will state the internal as well as external environmental factors affecting Harrods in the global market.
- The company needs to adopt a suitable strategy in their business to expand and grow in large markets (Pantano. and Dennis, 2019).
- Harrods in a luxuriousshopping destination is known around the globe for its brand's , beautiful exterior, and premium services to its customers
Note: The presentation will highlight micro factors which affect business operations in large markets and increase their market value and revenue (Pantano. and Dennis, 2019). It will also highlight economic factors' impact on business sales and profit.
One internal and one external environmental factor affecting Harrods
Internal factors
- The Luxury department store is growing rapidly and consumers are well aware of luxury brands.
- The income of the consumer plays a very important role in the luxury retail market. When there is a rise in the income of customers, it gives huge benefits to departmental stores (Nash, 2018).
- There is an increase in market visibility both in retail business through advertising and exposure to consumers.
- The variables like lifestyle, fashion, open-minded attitude, perceived emotional value, and apparent economic value appreciably persuade the willingness of customers to pay for luxury style brands (Putra, 2019).
- Young women mainly treasure in luxury fashion but they do research before the purchase of luxury products.
- For Harrods to stay a global leader, the firm needs to continually make changes to align with the perceptive need and expectations of its customers.
- Harrods should bring in the latest fashion and branded products to please the customers.
- Technological innovation is occurring in all industries today. The company needs to go digital in this internet world (Hon, al. 2020).
- The company is investing in artificial intelligence and mobile technology to get germane data for better consumer reach.
- The company is focusing on product modernization for creating best in better quality product with safety standards.
- Harrods is also working on innovation and technology which set an Omni-channel strategy for dynamic sales and marketing of its products.
- Customers of Harrods like their shopping experience by visiting stores, the latest trend, and by showing off their luxury style.
Note: The company is working with the wider industry, partners, and brands to bring in business models and develop a new concept that strengthens sustainability across the retail business (Nash, 2018). The consumer is shifting their preference and lifestyles correspond to opportunities for business in the new market (Hon, et. al. 2020). Internet shopping is a major development for the retailing industry that directly influences the sales approach, the company needs to adopt these changes to expand its business in the global market (Putra, 2019). Paperless processes, the administration, and management of Harrods are carried exposed on IT systems, which are admittance through a safe server and make accessible elasticity in the procedure of the business.
External factor
- The entire UK economy is in front of recession and an extremely responsive to make changes in interest rates.
- Unbending competition surrounding every industry of the retail departmental store has led to businesses give a lot of incentives to the customer.
- This has influenced Harrods as the price has been drive down most of the There was a change in consumer spending because of increasing economic fluctuations.
- increasing inflation, duties and taxes, and recession impact the performance, productivity, and profitability of Harrods.
- Pre-covid, luxury department store was emerging as a big part of the revenue of global economies.
- Consumers being more aware of their health, luxury lifestyle, and spending extra income for better services prove to be a highly demanding factor (Ko and Rhee, 2014).
- During the COVID-19 stage, the company got overloaded with closing down stores and decline in revenue and sales.
- A huge number of people are spending the extra money to put into luxury fashion and fashion accessories lifestyle.
- As macroeconomic conditions stabilize, customer expenditure increases and this lead to more profits and sales for Harrods.
Recession: In the UK economy, it is an impermanent era of decline of the economy; throughout this period, trade, and business activity go down, and it is calculated by a drop in GDP in 2 successive quarters.
Inflation: is a temporary period during which, the prices of good and service go up and the value of money decreases, and living costs increase.
National Economic Policy: refers to the law and rule made to order the business industry. These rule and law are strict, the duty is very high, and then the prices of the luxurious department will be high, which is not affordable for the middle income group.
High Economic Growth Rate: a country’s financial system is thriving and b, in such a state, the luxury fashion industry grows.
Note: The growing contribution of luxury department stores to the nation and global economy has become an index to measure the economy of an individual nation. The demand for products like beauty products, expensive skincare, clothing for men and women, grooming services, and utility products was increasing due to the increasing incomes of consumers (Ko and Rhee, 2014). The company is maintaining high fashion and the country is developing by economic growth is stabilized and contributing to the economy (Dixit, et. al. 2019). But now with the situation improving, this corporation needs to shift its strategy and attract more customers through diverse promotional tactics.
Conclusion
- A company to be successful must find suitable segment customers for its The presentation has highlighted the micro and macro factors of Harrods which is a luxurious departmental store located in the UK.
- The customers compose the most important factor in the microenvironment of business. Product sales mainly depend on the income and spending habits of consumer satisfaction.
- Economic factor plays a significant role in UK's economy, which include the Harrods department store to run their business activities smoothly and efficiently.
Note: The presentation has concluded internal as well as external factors that influence and affect the business operations of Harrods.
References
- Hon, C., Chen, X., Tang, Y., Feng, Y. and Chen, Z., 2020. Digital Transformation at Harrods. Frontiers in Economics and Management, 1(9), pp.44-51.
- Pantano, E. and Dennis, C., 2019. Store buildings as tourist attractions: Mining retail meaning of store building pictures through a machine learning approach. Journal of Retailing and Consumer Services, 51, pp.304-310.
- Nash, J., 2018. Exploring how social media platforms influence fashion consumer decisions in the UK retail sector. Journal of Fashion Marketing and Management: An International Journal.
- Ko, S.H. and Rhee, Y.S., 2014. A Study on Department Store Environmental Factors to Improve Consumer Commitment-Focusing on a Comparison of Department Stores. Journal of the Korean Society of Clothing and Textiles, 38(2), pp.147-160.
- Putra, Y.M., 2019. Analysis of factors affecting the interests of SMEs using accounting applications. Journal of Economics and Business, 2(3).
- Dixit, A., Clouse, C. and Turken, N., 2019. Strategic business location decisions: Importance of economic factors and place image. Rutgers Business Review, 4(1).
