Business Environment

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INTRODUCTION

Business is an economic system in which provided goods and services are purchased and sold in attempt to make a profit. Businesses have objectives, and in order to meet these objectives they need to identify the internal and external influences on their stakeholders.

Mothercare plc is a specialist retailer of mothers and children’s products under the Mothercare and Early Learning Centre brands. It was first listed on the London Stock Exchange in 1972. The company operates in high streets as well as online, and also worldwide, through franchises in Africa, Europe, Far East and the Middle East, under ‘Mothercare’ brand name.

Mothercare has been transformed over the years, from a predominantly UK retailer into a global company. However, the company is aware of the big opportunities as well as the risks of global economy.

1. MISSION, VALUES, OBJECTIVES AND RESPONSIBILITIES OF AN ORGANISATION

1.1. MISSION, VALUES, OBJECTIVES AND STAKEHOLDER INFLUENCE ON MOTHERCARE

It is known that every organisation has its mission, which helps the organisation to meet its business objectives. Mothercare’s mission is to meet the needs and aspirations of parents for their children, worldwide. The group’s objectives are:

-to sustain high level of consumer satisfaction
-to make Mothercare group become the world’s leading specialist retailer of children’s products -to increase growth
-to increase sales

Stakeholders have different interests in an organisation. Some stakeholders’ interests are in common with other stakeholders, and some others are in conflict. For example employees and shareholders’ share interest is to see the organisation succeed. On the other hand, managers have interest in organisation’s growth, but this might be at expense of short term profit. However, current and future strategies of the organisation are affected by the external pressure (competitors, shareholders, customers, pressure groups, government), and the internal pressure (employees, managers, the organisation’s commitments).

1.2. ACHIEVEMENT OF STAKEHOLDERS’ OBJECTIVES IN MOTHERCARE

An organisation tries hard and builds up strategies to meet the objectives. The key step for Mothercare in development to achieving their goals was the acquisition of the Early Learning Centre in 2007.

According to Mothercare, the group’s aims will be achieved by

-the best specialism of their staff (employees and management) -developing original own-brand products (Mothercare and ELC brands); and last but not least -their growth strategy

Since their acquisition of the ELC, the group’s products have improved and the number has increased. Mothercare also operates online, worldwide, to meet all the customers’ needs, and also to maximize the company’s profit. Regarding the products, both Mothercare and ELC source products from around the world. There are three main sourcing offices, in Shanghai, in Hong Kong and in Bangalore, through which Mothercare co-ordinates the sourcing of its products. Furthermore, there is their growth strategy, operating through four channels:

- UK retailing
-Direct
-Wholesale
-International franchise

UK retailing:
The group’s target since 2008 has been to increase the number of parenting centres in the UK to 120. To meet this target the group had to go through three phases, which involved closing more in-town lower profits stores, and opening more out-of-town parenting centres. They achieved this in 2009/2010.

Direct:
Direct has had a rapid growth in the year. The development of online shopping in the UK has had an impact in the transformation of Mothercare retail.

Wholesale:
Wholesale is still small, according to Mothercare, but it also represents growth opportunity in the UK and globally. In February, Mothercare made a partnership with Boots, so they will supply childrenswear to Boots UK on a wholesale basis.

International franchise:
Mothercare holds two joint...
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