Business management & Development assignment essay help On: Menarys Department store

INTRODUCTION

Menarys is department store based in Northern Ireland. There are twenty stores operated under the name Menarys and eleven stores are operated under “Tempest” name. Also there is an online store named Menarys.com which was launched in 2010. Menarys was founded in 1923 by Alexander in Dungannon. Currently there are more than 2000 employees in the company and is run by the Alexander family (CITU 2013). There are many business environmental challenges faced by the company. A description of the threats and opportunities available for the retail company in Ireland’s market is provided in the report. Also Michael E. Porter’s five forces model has been used to analyze the competition in retail industry. Since Menarys is now present in both Northern Ireland and Republic of Ireland hence an economic overview of the company is given in both the countries. Based on the analysis of business environment and competition in the industry some recommendations are provided at the end of the report.

BUSINESS ENVIRONMENT OF MENARYS RETAIL LIMITED

Retail in Ireland is a pillar for economic development of the country as contribution of the retail sector to gross domestic product of Ireland is 10%. Also retail industry is the largest employer of Ireland. Total number of employment given by retail is 250, 000 which account for 14.5% of the total workforce. If we look at the Ireland’s retail sector we find that there are many small, indigenous companies which have made the entire industry. Structure of the industry is very simple as approximately 44000 wholesale and retail enterprises are there in Ireland. More than 80% of the retailers have less than ten employees and 86% are owned by Irish people.

Considering the above factor we find that there are ample opportunities available for Menarys in Ireland. First of all there are no big companies in the country and hence Menarys has opportunities to go for big. It can develop it business all over the Ireland using its organizational resources and appropriate strategies. Secondly, country is able to provide low cost labor as retail industry employs maximum workforce in Ireland. Since there are many small enterprises running in the country therefore Menarys has opportunity to acquire these small retailers and run them under the name of Menarys to expand its business (IBEC 2013).

Apart from above opportunities there are many threats also available for Menarys. First of all entire European Union has suffered from debt crisis which has affected the retail business of the country and country is still under the affect of the economic crisis. Biggest threat for Menarys is struggling economy of Ireland. Although the country has shown a sign of recovery after the help of IMF and EU but still the poor economic conditions are big concern for Menarys. Also poor economic condition of the country has changed taste and preferences of Irish people they are now preferring cheap products rather than costly. Menarys cannot go for luxury items as luxury is at declining stage in Ireland. And another threat for the company is that the Irish economy will continue to struggle for some time (Euro monitor 2012).

COMPETITION IN IRELAND RETAIL MARKET

Competition in the Ireland retail market can be analyzed through Michael E Porter’s five forces model which include bargaining power of buyer, bargaining power of supplier, threat of substitutes, threats of new entrants, and rivalry among the industry.

Bargaining power of buyers:

Buyers of Menarys are the people of Ireland as well as small retailers who directly sell to consumers. As we discussed above that the economy of Ireland has gone through a rough phase and this has changed the choices of buyers of Ireland and now they are bargaining for lower prices.

Bargaining power of Supplier:

Supplier for Menarys would be the companies of the products which it sales. They have high bargaining power as they can sell their product directly as well and if their terms and conditions are not accepted, they can go to other retailers too. Also the raw material suppliers affect business of Menrays as they can bargain due to increasing cost of fuel and production (Murray n.d.).

Threat of substitute:

Since Menarys is in retail products therefore it can face the substitutes easily. A retail store generally fulfills the basic requirements of its consumers and in any situation people of Irlenad would be required to purchase basic things. The only requirement is to make a strong brand image and reach to consumers.

Threat of new entrants:

New entrants in Ireland can affect its business highly as the industry has few big retailers. Companies like Tesco Ireland, Dunnes Stores are already present in the country. If the economic situation of the country improves later then other big companies like Wal-Mart and others will try to enter into the country which would be a big threat for Menarys.

Rivalry among industry:

Retail industry is highly competitive in Ireland as there are more than 40000 small and big retail enterprises in Ireland. Not only small retailers are sharing the market share of Menarys but also there are big competitors of it such as Tesco Ireland, Dunnes Store, Superquinn, and Marks and Spencer (Richards 2013).

ECONOMIES OF NORTHERN IRELAND AND REPUBLIC OF IRELAND FOR MENARYS

While looking at the economic context of Ireland we found that the economic situation of the country is not in the situation of favoring the retail business. Data shows that retail business declined by 1.5% in April 2012 and annual decline was 2.7% in 2012. Reason behind the decline is obviously the economic slowdown, unemployment and other critical financial situation of the country (Finfacts 2012). Figure provided below clearly represents the economic impact on retail sector of Ireland.

Situation is not very favorable for retail in republic of Ireland too. Debt crisis had an impact on it as well and due to that economy of the country is continued to shrink. In the year 2011 economy of republic of Ireland declined by 2%. The austerity policies applied by both the countries have affected the spending power and confidence of consumers badly (BBC News 2011). In 1980’s Ireland was among poorest countries of Europe but in 90’s till 2001 country saw boom phase and Ireland became most successful economy of the European Union. But debt crisis in last decade has affected the country badly and it is still struggling (Smith 2010). These poor economic situation of both the countries are affecting the performance of retail sector and hence of Menarys.

CONCLUSION AND RECOMMENDATION

Concluding the report we can say that Menarys has many opportunities available to develop but company will have to face many challenges as well. Since there are no big retailers in Ireland therefore Menarys can represent itself at national level but it would be required to compete with Tesco Ireland and Dunnes with strong competitive strategies. Also the poor economic situation of these two countries is a big threat for Menarys. There are following points on which Menarys need to focus:First of all Menarys is required to deal with the bad economic situation of the country. It is required to understand the preferences of consumers in declining Irish market.

• People prefer cheaper products in the age of unemployment and Menarys should take the advantage of it by producing products according to the taste and preferences of the consumers.
• Also increasing fuel cost and other raw material prices are big challenge for Menarys and to deal with this situation company can apply cost leadership strategy by cutting the cost of production and distribution.
• To expand its business in entire Ireland Menarys can go for acquisition of some small retailers but at right time.

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