Responding to changes in the market environment
Curriculum Topics • Political factors • Economic factors • Social factors • Technological factors
Jessops has been a leader in the photographic business for over 75 years. The Jessops story began in 1935, when Frank Jessop opened a photography store in Leicester. Today, the company is the UK’s premier photographic retailer operating from over 200 stores around the UK. In addition it has an online shop and call centre. Jessops is the trading name of The Jessop Group Limited, which is a subsidiary of Snap Equity Limited. A key part of Jessops’ product portfolio is its photo and imaging business. Jessops operates in two main sectors of the photography market. Hardware Photographic equipment ranging from compact cameras to digital single lens reflex cameras Services Photo printing and imagery
is declining by around 30% year on year. This poses a challenge to the directors and managers at Jessops. To sustain and grow the business, they must develop ideas and plans to combat the changing market and stimulate new demand. This case study reviews the external factors that have had an impact on Jessops’ operations and strategy. It shows how managers study the company’s external environment through a PEST analysis. This involves identifying the political, economic, social and technological factors in the external environment that could impact on the business. This information is then used to assess the company’s current position within the market. The findings of the PEST analysis can be used by the board of directors to reassess business strategy and tactics. The board will decide what changes should be made to business operations to respond to external environmental changes. In this way, through carefully analysing the political, economic, social and technological changes in its external market, Jessops has been able to develop new business opportunities.
The modern photographic industry has changed radically. The business originally focused on producing prints from photographic film. Every shot of a reel of film was printed regardless of quality. Today, however, digital cameras allow consumers to choose which prints are produced. As a result, traditional film printing in the UK
Subsidiary: A business organisation that is owned completely or part owned by another business. Product portfolio: Range of goods and services that a company produces.
Strategy: A plan for making major changes in an organisation and its activities.
Tactics: Decisions driven by short-term objectives within a longer-term strategy.
Environmental changes: Changes that take place outside of a business organisation.
Jessops | Responding to changes in the market environment
Businesses can be affected by many aspects of government policy. In particular, all businesses must comply with the law. They must also consider the impact of any forthcoming legislation on their operations. This may require taking action before the legislation comes into effect. One issue that affects manufacturers and retailers of electronic goods is the disposal of these products at the end of their life. Recycling is high on the public agenda. There are government initiatives to promote more recycling. These initiatives are sometimes backed by legislation. For example, the Waste Electrical and Electronic Equipment (WEEE) regulations are designed to reduce the amount of electronic waste going to landfill sites. Businesses must obey these environmental laws. However, a company that goes further by taking other measures to minimise its environmental impact will be seen more favourably by consumers. Jessops responded to the WEEE regulations by contributing towards a national fund to assist local councils to develop collection facilities for electronic goods. The company is working to increase...