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1. Introduction
This academic essay is related to a market analysis of the nursery furniture market (3-5 years old) for KM. And KM is one of UK’s leading educational and contract furniture manufacturers which want to expand the nursery market through a new range of furniture. The 40 years’ experience of supplying educational furniture could contribute to KM’s vertical growth to nursery market. Four aspects will be examined in this essay. First, PEST would be used to assess the external operating environment. Second, the customer profile and their purchase decision processes will be analyzed. Third, KM’s key competitors in the nursery furniture market will be evaluated. Finally, some recommendations will be put forward for KM Furniture Ltd’s new range of furniture competing in this market. 2. The External Operating Environment

The external environment in which the company operates generally has a significant impact on its operation, i.e. marketing strategies, tax policy’s influence on finance. The marketing environment is consisted of macro-environment and micro-environment. The macro-environment is about the influences from political, economic, ecological, social and technological. The microenvironment is about the people that related to the company’s operation, such as suppliers and customers. In general, the macro-environment would affect the micro-environment, which means the change of macro-environment is usually earlier than that of micro-environment. This essay will focus on the analysis of the macro-environment through the PEEST method. 2.1 PEEST analysis[1]

The following is a table for PEEST analysis.
|Political/Legal |Economy | |Government law could have an impact on company’s operation, |Inflation rate could be adjusted by monetary policy. | |i.e. environmental law, patent law. |Economy recession lead to unemployment and lower CPI. | |Tax policy could influence the price and the company’s |Cheap furniture from Far East. | |finance. | | |EU laws could limit company’s dominance and development | | |routes. | | |Social/cultural |Technological | |Demographic forces: increasing TFR |New range of products, i.e. multifunctional furniture. | |More dual-earner families lead to decreased price |CAD-2D&3D capability. | |sensitivity. |3D modeling & Virtual ‘walk through’ help planning space. | |Demand for environment-friendly furniture. |The company’s website could renew the categories and prices | | |gradually. | |Environmental | |Demand for non-toxic and harmless furniture for children. | |Demand for environment-friendly furniture. |

2.2 Implication
Through the PEST analysis table, social, technological and environmental factors would have a greater impact on KM. 1. Social:
• The population structure changed, for example, the increasing TFR would lead to more children so that the increasing demands for...
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