This work is a market research paper that is based on the London Spitalfields Saturday Style Market. The market research is conducted through Political, Economic, Ecological, Social and Technological (PEEST) analysis. The paper begins by defining the environment of the market before identifying the political factors in the United Kingdom, which affect the market potential of the business. The next section considers the economic environment of the business and gives a recommendation strategy of the market, which can expand despite the economic challenges. The paper also evaluates the emerging ecological, social and technological issues in the market and gives a number of suggestions on how the business can cope with them in order to meet the needs of the people more effectively.
Old Spitalfields Market is one of the greatest business institutions in London. The market is situated in a large Victorian building with a metal and a glass roof. The market is surrounded by many fashionable and unique shops and restaurants, as well as several traditional market stalls and numerous eclectic independent dealers of the finest wares. London Spitalfields took its name from the ancient hospital and priory of St Mary’s Spittel, which was officially founded in 1197 (Jones, 2002). The Spitalfields Market thrived from a very humble market where ordinary goods, such as fowl and roots, were sold since the 17th century. Since then, its stalls have been undergoing relevant transformation in order to meet the needs of the growing London’s population, and numerous traders started to work in a variety of shops. These advancements have made Spitalfields Market a major commercial center that offers fresh products and operates seven days a week. Spitalfields Saturday Style Market is part of this shopping complex, which sells original clothes, accessories and homeware made by various designers (Jones, 2002).
Application of PEEST Analysis on London Spitalfields Saturday Style Market
The concept of PEEST analysis refers to a critical evaluation of all political, economic, ecological, social and technological factors that form a macro-environmental force, which affects a business institution (Xu, 2005). The main aim of conducting this analysis is to explore external factors that affect the business as well as the market trends that may change in the future, and to define how the business can cope with those shifts (Griffin, 2010). Furthermore, the goal of this paper is to help the business in exploring opportunities and enhancing defense mechanisms against threats, hence making it remain better choice market than its competitors. The scope of analysis may also consider legal, environmental, demographic and ethical forces.
In the current European societies and other foreign markets, several political, economic and social trends influence the way in which businesses should be run. As a result of this, London Spitalfields Saturday Style Market needs to make necessary marketing strategies that will manage these contemporary societal challenges. This will enable the business to maintain its market, expand its potential and meet the needs of the customers in a more appropriate manner.
Political Factors and Environment
Several political factors have emerged in Britain affecting trade from different dimensions. These factors include declining statutory funding, declining confidence in political systems, evolution of European Union influence, increased privatization, and local strategic partnership. To begin with, the recent crunch and failure of main banks that have been witnessed are likely to lead to massive government bailouts and budget deficits which may stretch out to the future. Even before the reign of the coalition government, which brought to board the 2010 Comprehensive Spending Review, it was clear that the government had a plan to reduce expenditures on privately owned enterprises as well as the charity organizations. Consequently, London Spitalfields Saturday Style Market, just like other markets, can experience increased revenues paid to local and other government authorities. Pricing should therefore be revised in order to accommodate the increased expenditures (Frain, 2011).
In addition to this, British generally experience decline in confidence of the political structures. This is marked by popular disillusionment with formal politics, political apathy and drop in political party membership. Hence, there is a growing cynicism, which also affects the ability of politicians to organize their parties and influence general changes. This has created a general view that the country’s political institutions and politicians are untrustworthy since they often fail being disconnected from the masses (Frain, 2011).
However, market analysis proves that this weakening of political system is not a serious threat to established businesses. This can be explained by the fact that the United Kingdom is occupied by high profile charity organizations, non-governmental organizations, and civil society organizations that can still utilize the political vacuum. The traditional politics is not the only way through which businesses’ rights are monitored. Spitalfields Saturday Style Market, therefore, still has a great contemporary opportunity to arise and expand despite this increasing democratic deficit (World Economic Forum, 2008).
The evolution of European Union is another political factor that affects all forms of businesses in the United Kingdom. Since its inception, the union has remained influential in matters of trade, national legislations, travel, and work regulations. It provides an external authority that governs the freedoms and rights of business enterprises even beyond their national boundaries (World Economic Forum, 2008).
In relation to this, London Spitalfields Saturday Style Market has higher potential to explore the European market beyond its local operations. Furthermore, professional staff can be hired from anywhere throughout the European Union without too much diplomatic regulations and limitations. Even when the business is phased by a legal challenge in its pursuit to engage in regional expansion, the European Court of Justice functions in order to grant business rights. With regard to taxation policies, the European Union has also set favorable standards that advocate for good governance in taxation, transparency and information exchange (World Economic Forum, 2008). In a related move, the London Spitalfields Saturday Style Market has fair grounds for competition with other similar dealers without unjustified oppressive taxation policies.
Furthermore, the United Kingdom continues to occupy a special place among the other states that constitute the European Union. This implies that products that emanate from the United Kingdom have an upper hand in the market that makes it more requested than other European products. The perceived special position of the United Kingdom is not only considered from political point of view, but also has economic benefits for diverse business institutions (Crane and Matten, 2007).
Economic Factors and Environment
In a general business environment, numerous economic aspects determine the success of business enterprises. These include income, inflation, recession, interest rate and exchange rate. It follows that business cycles, economic growth, employment and unemployment are all determined and influenced by these factors (Crane and Matten, 2007). Any change in a wider economy has an impact on whether large scale or small scale business. In the period between 2008 and 2009, the United Kingdom’s economy went into recession, leading to negative impact on the retail industry. Economic analysis indicates that at the peak of the recession, the GDP fell by 2.6 percent in a single quarter. This was a very negative observation based on the fact that the economy had grown by the same percentage nearly in all the quarters of the year 2007. This was the most serious recession since the quarterly data began to be published in 1949 (Frain, 2011).
As a result of the downturn, the consumers had less income that reduced their purchasing power. This had a direct impact on the London Spitalfields Saturday Style Market, especially reflected by the perception that most of their products were viewed as luxurious goods. Furthermore, the unemployment rate was increasing while some employers went ahead to cut down the wages of their employees whereas others were forced to scale up wages at the very minimum rates. These challenges affected Spitalfields Saturday Style Market together with other retail shops. Therefore, an economic forecast is necessary to spearhead a projection and strategies for the survival of the business (Frain, 2011).
Although the recession was very deep and long, the United Kingdom’s economy seems less likely to suffer from a similar loss. It is clear that the government borrowing is still high and a considerable percentage of the population remains unemployed since the rates are still lower as compared to the previous forecasts. Furthermore, the housing market has been showing recognizable increase in strength (Frain, 2011). For that reason, London Spitalfields Saturday Style Market has a positive prospect in the market within the United Kingdom as the government makes all attempts to curb reoccurrence of recession.
The ecological factors that affect business are based on the principle of corporate social responsibility as well as healthy competitiveness (Griffin, 2010). This principle demands that businesses have to integrate both social and environmental concerns in all their business operations and interactions with relevant stakeholders. Although business enterprises are expected to observe this on a voluntary basis, various governmental and international agencies have established rules to ensure that businesses engage in their activities in a manner that enhances sustainability of the environment (Sander & Premus, 2005).
According to the provisions of the European Commission on Competitiveness of 2001, environmental sustainability must be observed at all levels of business operation, ranging from internal, national, regional or international. All stages of production, ranging from extraction of raw materials, manufacturing, distribution, consumption and disposal of waste materials, must also be taken into account. In the entire process, all forms of nature including atmosphere, natural space, water, plants, animals, and biodiversity have to be safeguarded within an institutional business policy (Sander & Premus, 2005).
Viewing the products of the London Spitalfields Saturday Style Market, the progress of the business indicates that it cannot be conducted in isolation from the global environmental ecological policy. For instance, the claim of originality of the products depicts that most of the commodities like clothing are made from natural resources. This fact means that ecological consciousness should help the producers not to deplete the natural resources, but to exercise responsible recycling. Packaging of goods bought and disposal of used products should also limit pollution of the environment. If ecological policy is effectively enhanced, the products will grow in popularity not only within the United Kingdom, but in other states like Canada, Spain and Germany whose environmental policies are very firm.
A number of social drivers often affect the acceptability of a product in the market. Such factors include the age of the targeted clients, general attitude towards the product, lifestyle of the people, cultures and subcultures within which the product is sold. This also embraces all the groups that are involved, ranging from employees and producers to consumers and other stakeholders in the society. Generally, a product is viewed as socially viable if it creates a strong sense of acceptability, pride, morale, comfort and positive relationship with the external stakeholders (Crane & Matten, 2007).
Since the Industrial Revolution in Europe, the concept of modernism has emerged as a social factor that affects all dynamics of society including business. For this reason, people tend to reject the traditional lifestyles and ideologies in order to incorporate new forms of creativity. This is witnessed in all forms of designs, art, diet, music and even religion. However, the trend is more common among the young generation as compared to the old who, in many cases, still wish to associate with traditional norms and lifestyle (Jones, 2002). It is obvious that Spitalfields Saturday Style Market needs to continually and periodically review its products with the purpose to serve the needs of the modern and post-modern generation. However, a balance should also be created so as to maintain traditional products that are still appealing to the existing older generation.
The fact that Europe is known as a knowledge-based society has created a demand for institutions and business firms to generate new imperatives in order to compete with the technological competitiveness. Firms have a general perception that newer and better knowledge is essential to the success. This results into the competition caused by the need to transform the older economy into a new economy (Sanders & Premus, 2005). In addition, the current use of modern ICT in business has turned the world into one global market where goods compete with others from across the globe. Consumers are also exposed to a variety of choices as the information is readily transmitted to them even in their homestead. In evaluating the market products, the use of indexes replaced the manual evaluation and eased comparison of products. The business can effectively utilize this advanced technological progress to improve its products, conduct global-based marketing and evaluate the people’s response concerning their goods. This will fulfill the dream of a sophisticated, but innovation-driven business networks across the European market and beyond (Sanders & Premus, 2005).
In summary, the PEEST analysis is the most successful instrument of conducting market research related to a certain business. This is affirmed by the fact that it does not only consider the domestic market variable, but also the political, economic, ecological, social and technological factors. Meticulous investigation of London Spitalfields Saturday Style Market reveals that Europe is currently marked by certain political, social, and environmental factors that the business has to cope with in order to maintain and expand its market potential.
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