SG4001 The perfume shop - Complete mandatory assignment PDF

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Complete mandatory assignment for SG4001...

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Introduction The Perfume Shop is a perfume retailer founded in 1992 in the United Kingdom. The main product line of the company is perfume, although they also have beauty and cosmetic products. A.S. Watson Group, the largest health and beauty retailer, acquired the company in 2005, therefore expanding the business, making them reach the second position of all U.K. perfume retailers (Sell, 2006). The basis of this report is to discover the nature in which this shop exists. To accomplish that, we will be looking at the PESTLE analysis, which is one of the techniques that organizations use to explore the political, economic, social, technological, legal and environmental aspects of the firm's environment. Thus, the PESTLE analysis will include all the elements to examine The Perfume Shop, and therefore, the macroenvironment, which according to Olagundoye, A., and Ambe, E. (2015), comprises a set of factors that can indirectly affect the company’s relationship with its varied stakeholders. PESTLE analysis of The Perfume Shop Environment The environment has numerous influences on the way The Perfume Shop operates. Over the years, the business industry has become more environmentally conscious. The company has gathered that ‘once the natural resources will be completely depleted, they will have no other resource to depend on for the needful things’ (Linter, 2009). Due to such influences and factors, they are now assure that the products sold are environmentally friendly before they create them. Considering this factor, they make relevant decisions based on their target market as if they are not capable of pleasing their customers’ needs and expectations; their selling rate will decrease. Furthermore, as times are rapidly changing the government has tried to make adjustments in reducing the emissions of the greenhouse gases, “Greenhouse gas emissions rise at the fastest rate for 30 years,” (The Guardian 2017). The result of this matter impacts the retailer as some of their perfumes contain carbon dioxide, which increases pollution. Therefore, The Perfume Shop have to consider this environmental factor as it can harm some consumer that have asthma. The Perfume Shop must meet the Reach regulation, enforced on ‘June 1, 2007 ‘(Kavaratzis, Warnaby, and Ashworth, n.d.) to protect consumers from the use of chemicals. Due to this law, perfumes have had fewer tests meaning that there has been less

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innovation in the fragrance industry affecting The Perfume Shop automatically. Social Growing popularity for premium and great value perfumes has meant an increase in demand for perfume, Global Industry Analyst (2016). As a result, the perfume industry and specifically The Perfume Shop has been capable of expanding. Furthermore, this is shown by The Perfume Shop increasing its stores by 12 since late 2015, Best companies (2016). Therefore this means that the company can hire more employees and follow the national trend in lowering the unemployment rate. See graph below for the level of unemployment from 1972 to late 2016.

Along with hiring more people, through employee feedback, it is evident to see that 75% of staff feel that their jobs are safe and 76% trust the leadership skills of their senior managers, Best companies (2016). Along with confidence and security, employees also gain profit from a benefits program that includes; discounts, bonuses, incentives and trips to inspire and excite. Resultantly, this evidence shows that The Perfume Shop is using the external social factors to their benefit to accomplish their mission and fulfill their vision "Mission: To exceed customer expectations in every market we operate. Vision: To be the world's leading health, beauty and lifestyle retailer.”, Best companies (2016). Technological Technology is a major element for business development and its advancements, allowing a more quick and methodological development of goods and services. It permits industries to design and produce the products more cost-effectively, apart

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from having other benefits. In that manner, the technological development has enabled The Perfume Shop to expand themselves without having to use a high level of printed advertisement, like newspapers or magazines. Hence, they use other methods instead, such as the Internet, including social media (Facebook, Twitter, and Instagram) and their website, apart from broadcast. However, the company has also developed a blog where they have bloggers which share their posts about the perfumes that the company offers, such as "Top 5 lucky perfumes", SCENTS (2016). Hence, this operates efficiently as the company uses technology to promote their goods in different ways, as this idea of creating a blog makes the customers relate to the organization in a different manner. Resultantly, this demonstrates how using methods to sell and advertise their products can have a positive impact on the business, in this case, The Perfume Shop. Proportionately, other methods have also resulted in a reduced costs for the company. Technology usage has enabled The Perfume Shop to use a sign-up procedure to target their audience and recognize their suitable product. There are also increased profits as online presence allows 24/7 worldwide purchases, as before they could only sell in at opening times in their shops at certain locations. Also, they use Shutl, allowing the customers to order and receive products on the same day. Therefore, having an online presence makes them increase their profit without having to increase their costs vastly. Furthermore, technology has made not only the selling experience and advertising easier, but also the hiring process through system analysis of the job candidates. Due to this, The Perfume Shop is now capable of hiring their employees quicker; apart from sharing their job vacancies easier through the Internet. At a result, this facilitates the company’s experience and allows them to avoid time wasting and concentrate in other departments.

Economic Since the United Kingdom holds a high GDP and rather a diverse economy, the UK holds a rather high position in the economy. According to the Financial Times, in recent years the employment rate has continuously increased throughout the last couple years following in the recession.

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(UK economy: GDP growth, interest rates and inflation statistics, 2017) Since the economy is slowly improving, this provides consumers with extra disposable income. As the UK's capital is London, one of the world's biggest business markets, a significant portion of the UK's population is quite wealthy. In that way, this puts The Perfume Shop in a real business standpoint because the perfume industry will thrive since due to the extra disposable income available to the middle and lower class who can spend the money on perfume. Since unemployment levels are going down, not only the wealthy, who were the primary consumers in this market, can buy perfume but also the lower and middle classes. With this in mind, The Perfume Shop can price their products based on their consumers' average incomes.

Legal and Political The Perfume Shop have to comply with National and European (“EU”) regulations. EU regulations are controlled by Chemical Inspection and Regulation Services ("CIRS"), and the National Law is in charge of the UK Governance. Accordingly, with the EU market rules, the cosmetics suppliers who would like to place cosmetics products have to comply with the following regulations: ● EU Cosmetics Directive 76/768/EEC (revised in January 2003); ● New EU Cosmetic Products Regulation (EC) No 1223/2009 (adopted on November 30, 2009); and ● Registration,

Evaluation

and

Authorization

of

Chemicals

(“REACH”)

Regulation (EC) No 1907/2006 (came into drive on 1 June 2007).

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This tree law intended to guarantee that all beauty care ingredients were looked into for security by SCCS (EU Scientific Committee on Consumer Products); all the cosmetic warning are institutionalized, clearing the substance and setup of thing prosperity evaluations and product information files ("PIF"). It additionally guarantees that all ingredients (either in beautifying agents definitions or completed items) have been enough enlisted. So The Perfume Shop must guarantee the EU regulation compliance. In addition to EU regulation, The Perfume Shop must ensure the UK legislation for the cosmetics industry. The UK national law has four main areas, namely: ● Safety assessment and product information pack; ● Restrictions in ingredients; ● Consumer laws; and ● Employment regulation. Summing up, both UK and EU requirements all the Perfume Shop cosmetics products must be: ● Assessed by a qualified professional (specified in toxicology) regarding the safety

of

the

cosmetics

products

prior the

release.

The

website

(www.ctpa.org.uk) for the Cosmetic Toiletry and Perfumery Association has a link to the Regulations and provide a list of safety assessors that follows a particular protocol; ● Have the product information pack, as established in the Cosmetic Products (Safety) Regulations 1996; ● Guarantee that the goods sell in are safe to be used by customers; ● According to the 1996 Safety Regulation of the Cosmetic Product, there is a label which is composed by the upcoming demands ● Who the manufacturer or supplier is, and the nationality, which has to be of the EEA (European Economic Area). On the other side, if the individual is from a country outside the EU, it needs to be included; ● Minimum durability indication, which the capacity directions ought to be given to empower the purchaser to keep the item as its best up until this date; ● Cautioning and prudent explanations; ● Group number or part code will help maker to review a clump of the issues if required;

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● Weight marking (required under the Weight and Measures Act 1985). 5.

Guarantee the consumer law, regarding: the sale of goods, the consumer

protection and the consumer credit act. First, ensure the right quality of a product. Second, has the consumer protection regulation, which includes the rights regarding purchases via the Internet. Finally, has control for consumer credit acts (especially luxury goods buying's). So this power will deal with the clients who purchase products on layaway. As it is stated, it specifies how credit contract ought to be, which incorporates data on the customer agreed quantity, installment strategies and data and credit charges (according to the Consumer Law, 2010); 7.

Guarantee the employment regulation (wages and working time regulation).

Waves must be aligned according to The National Minimum wage rates, 2016. (UK economy: GDP growth, interest rates and inflation statistics, 2017)The current national minimum wage rates are £7.20 for workers aged 25 and over; £6.95 for the workers aged between 21 to 24; £5.55 for the workers aged between 18 to 20; £4.00 for the worker aged under 18; £3.40 for the apprentices. Regarding, working time regulation (or working time directive) employees with more than 18 years, cannot work over 48 hours seven days average, generally averaged over 17 weeks, but if the employee is under age, cannot work more than 8 hours a day or 40 hours a week.

In closing, this report has examined how The Perfume Shop takes great pride in making sure that all the PESTLE analysis are met at a high standard to avoid any issues raised within the department. All the elements of the analysis were researched as The Perfume Shop considers all the multiple factors before carrying out their product into the market, which is perceived as a positive impact for the company. Among them, they appraise on the environment, considering the impact of carbon dioxide perfumes, apart from using technology to design and make products, communicate with customers and sale processing. Furthermore, The Perfume Shop, must comply with national and European regulations to ensure that all cosmetic ingredients have been reviewed and that products traded are safe, certified and reliable. Besides, evidence above proves that the company is playing a key role in helping reduce unemployment in the UK; which will help the economy continue through its expansion stage and proceed into a boom.

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References CIRS (2012), “EU Cosmetics Regulations and Registration”. Available at: http://www.cirsreach.com/Cosmetics_Registration/eu_cosmetics_directive_cosmetics_regi stration.html, (Accessed: 14 Jan. 2017). Companies, B. (2017). The Perfume Shop in Sunday Times List 2015. [online] B.co.uk. Available at: http://www.b.co.uk/Company/Profile/343802 [Accessed 14 Jan. 2017]. Global Industry Analyst (2016). Growing Popularity of Premium, NIche & Innovative Fragrances and Perfumes to Outline Growth in the Global

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Fragrances and Perfumes Market. Available at: http://www.strategyr.com/MarketResearch/Fragrances_and_Perfumes_Mark et_Trends.asp (Accessed: 26 December 2016). Government (2016), “Maximum weekly working hours”. Available at: https://www.gov.uk/maximum-weekly-working-hours/overview, (Accessed: 13 Jan.2017). Government (2017) “National Minimum Wage and National Living Wage rates” Available at: https://www.gov.uk/national-minimum-wage-rates, (Accessed: 10 Jan. 2017). Kavaratzis, M., Warnaby, G. and Ashworth, G. (n.d.). Rethinking Place Branding.

Lintner, K. (2009). Global regulatory issues for the cosmetics industry. Norwich, N.Y.: William Andrew.

Olagundoye, A. and Ambe, E. (2015) The Business and Financial Environment. United States: McGraw Hill-Education. Onrec.com. (2017). The sweet scent of recruitment success for Kaonix and The Perfume Shop | Onrec. [online] Available at: http://www.onrec.com/news/news-archive/the-sweet-scent-of-recruitmentsuccess-for-kaonix-and-the-perfume-shop [Accessed 14 Jan. 2017].

SCENTS (2017) Available at: http://blog.theperfumeshop.com/ (Accessed: 6 January 2017).

Sell, C. (2006). The chemistry of fragrances. Cambridge, UK: RSC Publishing.

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The Guardian. (2017). Greenhouse gas emissions rise at fastest rate for 30 years. [online] Available at: https://www.theguardian.com/environment/2014/sep/09/carbon-dioxideemissions-greenhouse-gases [Accessed 16 Jan. 2017].

The River Group (2017) Case Study: The Perfume Shop. Available at: http://www.therivergroup.co.uk/what-we-do/the-perfume-shop/ (Accessed: 2 January 2017). UK economy: GDP growth, interest rates and inflation statistics. (2017). 44 charts that explain the UK economy. [online] Available at: https://ig.ft.com/sites/numbers/economies/uk (Accessed 13 Jan. 2017).

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