Since time we have witnessed evolution, which has led to new ways and methods bring evolved and has helped make the human life more or less simple. In the same way the modern day market consisting o producer and suppliers have also seen a lot of change, change that has been profitable for those who have been able to adapt to them and destructive for those who were not fortunate enough to adapt to it. At the end of the day what we see in front of our eyes is the very result of the adaptation of these changes. This happened with over a period of time and many new entrepreneurs have taken the advantage of these change. One such modern day entrepreneur Mr.Kishore Biyani has tapped a golden opportunity and taken the market by a surprise. A surprise that has been very a profitable venture for him and has allowed a lot of development to happen. He was able to indentify this changing nature of the market and the customers and at the end build a empire to rule. This empire of his is called Future Group, and he as a number of well known brand under his belt for example: - pantaloons, big bazaar to name a few. While retail forms the core business activity of Future Group, group subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, brand development, retail real estate development, retail media and logistics.
Get your grade
or your money back
using our Essay Writing Service!
The Future Group has diversified into a lot of new business fields which have proved to be challenging yet successful. Perhaps its most successful business venture is Pantaloons as it operates on 160 million square feet of retail space in 73 cities and towns and 65 rural locations across India. It has around 30,000 employees and is listed in the stock exchange market.
In the value segment Big Bazaar is the identity of Future Group which as of 2008 has 100 stores across India which has made it the fastest growing expansion in the hypermarket segment.
The Future Groups has also diversified in the finance sector, capital, insurance, leisure and entertainment, brand development, retail real estate development, retail media and logistics.
Each of the ventures they have done has a very dedicated and updated site that allows the customers to know about theses business and increases their potential customers.
Great mountains are not climbed in one day a lot struggle and planning takes place before the actual victory happens. In order to understand these hardships of that the Future Group faced it is important to see the PESTEL analysis of the business.
Pestel also throws a lot of light on the existing problems that a business faces and give a fair enough idea as to the problems they may face in the future. This also helps new business venture to understand the market that they are planning to enter and give them a rough idea as to what expect from the market and how to handle the business in order to maximise their profits.
PESTEL: - the proper way of understanding the market and its entire variables is called PESTEL analysis, it also tells shows how these variable factors can have a effect on the business and thus it becomes very important for the business to understand the process and variables of PESTEL. The term PESTEL stands for the following: -
P = political
E = economical
S = social
T = technological
E = environmental
L = legal
All the above factors play a key role in any business organization. Future group also is no different other business and has to work in lieu with all the variables that are covered in PESTEL. Therefore it is important to understand the PESTEL analysis of Future Group.
Political: - this looks into the very fact that how much does and can the government intervene in the business.
Tax policy: - the tax policy for any business is not easy in India and when it comes to Future Group there are all the more problems and reliefs at the same time. Since it is a company that has diversified into so many new branches of business. For example Future Groups has a lot of companies that it has established and for each new company that is has formed it has to follow a new tax policy. Therefore the overall tax policy of Future Group is not complex but if we take into account how many tax policy they follow then it seem that it is very complex indeed.
Always on Time
Marked to Standard
Laws for new venture: - every company has to follow a lot of environmental laws that concern its working and operations. In case of Future Group there are a number of venture that is has done and still a number of ventures that is will do in the future and all these venture have to be done keeping in mind the existing laws and regulations regarding the venture that they decided to enter. For example: - for a foreign company to enter the retail sector it needs to have a partnership deal with a existing Indian company. Similarly with the changing trend in the country almost every big Indian player has a alliance with a foreign company in order to sustain their thirst for getting a larger market share. Therefore Future Group also in the past has followed the rules for such cases in a proper manner and has to continue to do so.
SEBI rules: - since some of it brands are listed in the SEBI and have a potential to affect the share market, therefore Future Group has to follow and the SEBI rules in order to have a good market standing. And introduce a few more companies into the share market.
State wise rules: - each state has its own set of rules and regulations and at the end of the day it is highly important that all these rules and regulations are followed.
Conclusion: - the Future Group has keep a lot of variable in mind while they are dealing with the political part of PESTEL and all these have a potential to shut them down if they are not followed.
Economical: - the environmental factors include all the factors that a economy faces and has the potential to affect the business organization, for example: - exchange rate and interest rate and so just to name a few.
Exchange rate: - Future Group has a lot of it goods imported from other country and therefore it is very important that the level of imported good do not exceed beyond a particular point so as to keep the profit level high and at the same time also still continue its level of efficiency.
Growth rate: -the growth rate shows how much the economy has developed and it plays a very important role for the Future Group as it will know how much will the customers will be willing to pay for the products and services that are offered by them.
Standard of living: - standard of living shows how much a person is aware of the surroundings apart from the simple facts like how much is he earning and so on. Keeping this fact in mind the Future Group can cater certain products and services as they will know whether or not it will be accepted in the market or not and this directly plays a key role in deciding the level of efficiency of the company.
Cost o capital: - capital does not only mean finance it also means the machinery that are used by the business. In case of Future Group there are a lot of ventures that are operational therefore for them it is important that the capital should be there whenever needed and it should be more or less surplus in case of financial capital. Depending on the SLR or CRR it will be decided as to how much the capital will cost as there is a level of interest involved which the company has to pay back and thus it affects the working of the company.
Inflation and deflation: - in an economy the level of inflation and deflation both have a affect on the purchasing power of the customer as both these situations can increase or decrease the value for money.
Conclusion:- the economical factors have a potential to affect the blood line of Future Group that is its finances therefore a small change in it can cause a major change in the company.
Social: - in this aspect of PESTEL analysis the following aspects of are covered e cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates.
This Essay is
a Student's Work
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Examples of our work
Clothing trend: - for the Future Group it is important to look in to this aspect of society also as it caters the clothing industry through Pantaloons, and thus this segment becomes a very important aspect for them.
Career attitude: - every company needs employees to do its day to day routine activities and thus Future Group has to keep in mind what are the career options that are being followed as this will affect the level of people interested in working for them and at the end of the day this will directly affect their market standing.
Age segment: - the age segment plays a great role in the process of Future Group as it helps them realise what group of customers they are serving and what type of response they will have and whether or not there products and eservices will successful in the market.
Conclusion: - the social segment affect the Future Group by have a direct affect on the customers and the work group that they serve.
Technological: -in this part of PESTEL we get a fair idea how technology can affect the Future Group and its working.
Internet: - the way customers are evolving they are demanding that their demands should be fulfilled at their convenience therefore the producer had to come up with a new way of dealing with this change, thus e-marketing has come into picture. Future Group also thus has to evolve and, keeping this point in mind if the there is no advancement in this field then the business becomes backward.
Transport: - if the transport is not developed then it poses a big problem for the Future Group as then it will be able to control its supply chain and moreover it will be stranded as it has a very wide spread business.
Current level of technology: - the current level o technology means what is are the various techniques that are used in that state or nation. Future Group relies heavily on this as even the retail sector has started using a lot of new and modern techniques which help them monitor the sales and revenue.
Conclusion: - even though Future Group may be not be so depended on the technological font but at eh end of the day many of its venture use a lot of modern day technology, thus making it a factor that cannot be ignored all together.
Environmental: - this includes the factors like, weather, climate and climatic change which can affect a business. In case of Future Group this can affect them as they have quite a few ventures that are affected by this factor for example- Pantaloons and big bazaar.
Climate change: -when it comes to Future Group since they have venture in the retail group thus this factor can affect them as it plays a major role in the customer thinking, for example: - the customers will not buy sweaters in summers and thus it is important for them to understand this.
Mood affect:- the weather also plays key role in deciding the mood of the customers which again affect their buying behaviour.
Regional weather: - the regional weather differs from state to state thus they have to change their products and services as per the climatic conditions in order to have a good sales and god profit.
Conclusion: - the environmental factors even though less in number can affect the Future Group and if they do not change as per it then their survival becomes a big question.
Legal: - in this part of PESTEL we will study how a legal framework of the country does and the states that is operates in have a combined affect on Future Group.
License: - license is very important for any business to run as it makes that business legal. Future Group also or its own has a license under which it works and operates and for the various other subsidies or ventures it has the license was not taken by Future Group but by all these ventures independently as they have a separate legal identity.
Expansion rule: - since Future Group has been expanding it has to adhere to the various legality involved with the expansion procedure and as a result it must adhere to these rules and regulations.
Correct information: - the Future Group like any other company has to follow this rule and provide correct and truthful information to its customers and can hope that it is what the customers are looking for and provide them with wrong or unlawful information.
Conclusion: - the Future Group has to deal with a number of legal formalities since it has a very vast spread empire that operates, and apart from this it is important for it to follow all the stipulated rules and regulations in order to stay as a legal business in nature.
Future Group is a very gigantic business empire and thus it has a lot of variables that it must work with in order to carry on its business. In the PESTEL analysis that I did I found out that there are number of factors that it must work with and at the end of the day has to do it in a very successful way so as to have a profitable business. But there were some part of pestel that were more important than the others simply because all its various ventures that happen have a legal identity of their own and thus must be dealt with a separate manner.