Debenhams

Debenhams
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Table of Contents TOC \o "1-3" \h \z \u Organization Overview PAGEREF _Toc310158854 \h 2Rich Picture PAGEREF _Toc310158855 \h 4STEEPLE Analysis PAGEREF _Toc310158856 \h 6Social PAGEREF _Toc310158857 \h 6Technological PAGEREF _Toc310158858 \h 7Economic PAGEREF _Toc310158859 \h 7Environmental PAGEREF _Toc310158860 \h 8Political PAGEREF _Toc310158861 \h 8Legal PAGEREF _Toc310158862 \h 8Ethical PAGEREF _Toc310158863 \h 9SWOT Analysis PAGEREF _Toc310158864 \h 9Strengths PAGEREF _Toc310158865 \h 10Weaknesses PAGEREF _Toc310158866 \h 11Opportunities PAGEREF _Toc310158867 \h 12Threats PAGEREF _Toc310158868 \h 13Balanced Scorecard PAGEREF _Toc310158869 \h 13References PAGEREF _Toc310158870 \h 15
Debenhams
The following paper is regarding the analysis of Debenhams plc using a number of analytical models. The analysis would include the internal analysis of the company and the external analysis of the company with regard to the environment in which the organization operates. Internal analysis of an organization relates the internal operations of the company regardless of the external environment of the organization. Internal analysis considers the factors like the strengths and weaknesses of the organization and the resources held by the organization that can be utilized as the competitive advantage of the organization. On the other hand, external analysis of an organization deals with the external environment of the organization. External analysis is the evaluation of the environment in which an organization operates. It considers the threats faced by the organization from its environment, the opportunities that are available to the organization due to its environment, level of competition in the industry in which the organization operates and a number of other factors. There are a number of aspects of Debenhams plc that would be explored using the analytical models. The models that would be used in the analysis are; rich picture, steeple analysis, SWOT analysis and balanced scorecard.
Organization Overview
Debenhams plc is a retailer company which operates under the format of departmental stores in the UK, Denmark and Ireland. The company is based in the UK and it is listed on the London Stock Exchange and it is also a constituent of the FTSE 250 Index. The company is headquartered in London. The company is listed in the UK but its operations are extended in a number of other countries. The company runs franchise stores in locations other than the UK, Ireland and Denmark. The business was originally founded in 1778 with one store and it has grown to be one of the biggest retail organizations with around 160 stores in the UK, Ireland and Denmark now. The company has around 40 franchise stores operating in other 24 countries including; India, Kuwait, Malaysia, Philippines, Turkey, Saudi Arabia and United Arab Emirates.
The stores run by the organization offer a wide range of products and the spectrum includes womenswear, menswear, accessories, home ware, children ware and gifts. The company retails some of the biggest brands in the world including; Chanel, Levi Strauss, and Denby. The retail stores operated by the company are also very spacious and they are considered to be lavish places to shop (Debenhamsplc.com).
The company is also very strong from the financial aspect. The financial position of the company is stable and it can be said that the company is a profitable company. For the year 2010, the company earned very high revenue of £2,119.9 million. The operating income of the company was £189.7 million and the net income of the company was £97 million. From these figures, it can be inferred that the financial position of the company is strong and it is capable of providing profitable returns to the shareholders of the company. The high revenue earned by the company indicates the fact that the operations of the company are highly successful. The company earns direct income from its stores in the UK, Ireland and Denmark however it earns royalty income from its franchise stores in other countries. Thus, the global operations of the company help the company in generating very high revenues. The operating income of the company also indicates that the company earns high profits from its operations. After deducting the costs, the company earns significant amounts of operating profit. The net income of the company is also significant therefore the company is capable to grow its business even further by making capital investment from its distributable profits and the company can also pay high dividends to its shareholders.
Rich Picture
Rich picture is used to help an analyst understand the problem in an organization in its entirety. Rich picture includes all the factors that may influence the problem under consideration directly or indirectly and the analyst includes or removes such factors from the picture in order to determine the main cause of the problem to develop a solution. As it is understood in Soft Systems Methodology (SSM), rich pictures are utilized as a means to represent a situation within an organization and it includes all the hard or soft facts that influence the situation. Rich pictures are a rough method to develop solutions for a problem and to find out the main cause behind the problem. This is said to be an effective model because it is cost effective and it brings out such facts which cannot be picked up using more formal methods. Therefore, rich pictures model is used in organization to develop a rough idea for the central point of a situation (Darzentas, Darzentas & Spyrou, 1994).
The Rich Picture can also be used when an organization decides to add a new feature in its overall system. The Rich Picture depicts; the functions of the new feature and they integrate with the existing system of the organization, basic elements of the process flow, the factors external to the organization that influence the process flow of the organization, hard or soft information relevant to the project, the types of requirements that the management will need to develop and the primary tasks involved in understanding the requirements types. Rich pictures can be presented using the soft systems approach or the hard systems approach (Mullins, 2009). Soft systems approach considers qualitative data, while on the other hand; hard systems approach considers conclusive and well defined data.
Following is a roughly made rich picture with soft systems approach, of a problematic scenario with the company, i.e. change in the market demand and the introduction of a new technology in the industry of the company.
A number of other factors can be inserted in the picture that may indicate other problems in the scenario and then other factors may be added to resolve the problem as well. Thus, rich picture is a very useful tool in organizational analysis.
STEEPLE Analysis
STEEPLE analysis is used to evaluate the environment of the industry in which an organization operates. It is a technique that is used to identify the changes that are taking place in the external environment of the organization so that the organization may be able to acclimatize its operations in accordance with the changes taking place in the environment (Griffin, 2011). The external changes may also pose threats to the viability of a business therefore identification of the changes beforehand is highly important. The factors that are considered in STEEPLE analysis are; Social, Technological, Economic, Environmental, Political, Legal and Ethical (Brown, 2005).
Social
Social factors that can influence the business of Debenhams plc may be; change in the fashion trends, change in the demographics, advertising and publicity, or change in the preferences of the customers. All these changes may affect the overall sales of the company. Therefore, a change in any of such factors would require the company to adjust its operations accordingly.
Technological
Technological factors may be; introduction of a new technology in the industry or the rate at which the technology develops. Technological changes are highly important because a company cannot survive in a competitive environment unless it adopts the technological advancements. Any technological changes in the industry would require the company to adjust its current technology accordingly. Therefore, it can be said that technological factors are highly important for Debenhams.
Economic
Economic factors that may influence the operations of Debenhams are; change in the rate of inflation, change in the rates of exchange, rate of unemployment, or any change in the interest rates. All these economic changes may influence the business of Debenhams because if the inflation rate rises, the prices will also rise and the customers would be reluctant to spend their money. If the exchange rates change, the company may find it difficult to import the products which have high local demand. Thus, it can be said that any change in economic factors is also important for the company.
Environmental
Environmental changes may be; change in the laws and regulations regarding environment conservation, ecological changes like an unexpected change in weather or a natural disaster. Such factors can also have a huge impact on the business of the company. A sudden change in weather may change the preference of the customers regarding clothing products and the company may witness slow moving stock due to such changes. A natural disaster may have an even bigger impact on the business of the company.
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