Assessing the opportunities for starting business

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

In this essay we are going to assess the opportunities for starting the business during the difficult time of economic condition. This essay shows how the business faces different problems during the economic downturn and how to deal with these problems while starting a business. From the business point of view it is necessary to prepare the realistic plan also stating the objectives, its strategies and financial requirements in the future. In an organization, the macro environment is generally considered to be the surrounding environment external to the business. Beyond the impact of organizations, it applies a vital influence on the way the business is run (Campbell et al, 2002).It consists but not limited to the social, economical, political and technological factors, the macro environment is significant for the management and it requires understanding as well as maintaining awareness. It has the ability to influence the decision making which may create problems in the future (Campbell et al, 2002).To achieve the goals and objectives of any organization, the strategy is the best method for collecting the resources and there are some possible obstacles and barriers which may come in its way. However, not only the action that strategy consists of but also the consideration of environment within which the business is operating in. When starting a business, it should focus on significant areas like to minimise cost and to maximise the profit, to maintain the cash flow in the business, to find out the risks which business is going to face, also to make survival strategy during difficult time, to access the sources which support the business.


Now, we will discuss the PESTEL Analysis, it stands for Political environment, economic, social, technological, environmental factors, legal factors. These all are external factors and can affect the organization.

There is no business which operates in the blankness. The business operates in an interactive environment where mostly the influence is double. In the business, the external factors of the environment over which the company has no control on it that affects the way it operates but in turn it affects the operations of the business.


The changes in ruling government will ultimately affect the business. The new government will form new rules and objectives also they may passed new policies and strategies which may difficult to implement for all the companies.

The company has to ensure that it adheres to all the legalities and regulations enforced by the government. It has to reassure that it maintains a good position in the political eye where it operates as well as to keep itself in a positive frame in front of the customers. At the same time, it required to participate in a good cause and to do the charities as well to maintain its reputation in the market.

Whenever, the organization wants to build the new store or to make any renovations to the existing stores, it has to obtain the permissions from the local council before it takes any steps. There is various legislation which deals with employment of employees like the minimum wage which rose to £ 5.80 from October 2009 or those who deal with the safety of the employees at work places. The company has to meet the government standards for the health, safety and environment.

In one of the research in UK reveals that the consumer goes through 13,000 shopping bags in their life time. The government body and environmental parties create pressures on the companies and on the consumers to avoid baggage wastage. If we take the example of J Sainsbury's Plc had launched campaign of reusable bag which can reduce the baggage wastage. The goal was to get the customers to continue to reuse those bags, saving up to millions of bags in a week. It allows customers to purchase bags costing just 10p and getting nectar points on by reusing those bags. The bag contains message about the environment, serving as an effective communication tools between the stores and consumers. To keep the organizations into the regulations is also important as well as to comply with the monopoly legislation is essential for the company.


Any company can be affected by the recession because it affects the economy. Very few companies can go forward and spend money; the company can reduced its prices and offering more discounts on their products.

These offers can help the company to increase their customers by providing quality products at reasonable prices, which helped them to increase their profits and matching their expectations of sales and performance.

Since the government has decreased the interest rates, the loans had been made much easier to get. This was also done to encourage more spending by customers, since lower interest rates apply.

One of the factors that may affect the company's operations is inflation. The prices of crude oil have been raised than it was earlier while the prices of rice have been doubled than before.


The social factors are related to behaviour and life styles of human beings. An organization can be influenced by its culture and the demographics of the area it operates in. To meet the busy life styles of the customers, the company has to bring forward their working hours and likely to offer more night shifts.

The life span of customers is increased due to advancements in medicine so the elderly population segment is increasing. The company can adopt several policies for providing extra services and goods to this market segmentation.

The company can put forward several goods and services to the consumers who belong to multi culture. The consumers in the multi culture are rising day by day to meet their requirements is very essential.

The consumers are become price conscious than before, not only lower income group people spend money but also young people do as well. The management can take necessary steps to understand the need of the young people who are more attracted towards the quality and price being offered by the company. They plan to continue to offer the quality of goods on display at far more affordable prices and offer discounts on the several products.


The organization is largely influenced by its technology that is available to the business and the level of it used in the business and its operations. If the technological factors are not considered at the time of marketing strategy then it will affect the business (Campbell et al, 2002).

Tesco, a competitor of Sainsbury's has move towards the internet technology and online shopping, which caught the customers quickly and got the popularity as well. Sainsbury's has also moved in the same direction also it has increased its online customers up to 20%.

If the proper technology is used in the organization then the company can gain more benefits and it can explore its business to worldwide. With the help of technology, the organization will be less dependent on its staff. It is easier for the consumers to purchase the product online by doing this they can save their precious time.

By using the advance technology, it becomes easier for both the organization as well for the consumers to interact with each other. Using technologies like internet and intranet is cheaper, convenient and reliable for both of them.

The internet has opened the several doors for the organization like advertisement can be done easily by using these facilities. It increases the consumer awareness as well as opportunities for the companies to sale their products easily.

Now a day, new technology has been adopted in all the service departments of the Sainsbury's which has improved their service efficiencies and internal check can be easily maintained. These technologies are faster and more convenient than ever before, it can be operated easily by the trained staff for day to day business operations.


To protect the environment has a vast impact on many companies such as travel and transportation companies. For example of air travel and the move towards more environmentally friendly products and processes that affects it patterns and creates more opportunities.

If we think about these factors that can affect the business due to heavy rains and floods. The steps can be taken to avoid the damages that can incur by the company by preparing plans and to be aware of the situation that how to deal with it. One of the factor that can affect is earthquake or many other unexpected events which takes places anytime and can affect the company a lot.


The business should operate within the law made by the government. Additionally, the legal factors are considered vital for the company's point of view. The Sainsbury's has to implement the law which is made to prevent the customer's exploitation.

There are some laws which are designed to protect even the employees, staff or member of the organization. The laws like employment act 1980, 1982, 1989; the Minimum wages act 1998 has to be followed by the Sainsbury's to avoid any legal obstacles and barriers for their company.

The laws like consumer protection act designed to protect the consumers from the exploitation of the companies. The Sainsbury's has to give priority to food safety, weights and measures, food labelling, supply of goods and consumer safety.



The SWOT analysis is very important for understanding the situations and to take decisions for all the kinds in business and company. Generally, SWOT stands for strength, weaknesses, opportunities and threats. It can be used for the business planning, for proper strategy, the position and the direction of the company or any other business proposition. The SWOT analysis can be used to consider the company's position in the market, method of sales distribution, product and brand, a new innovative idea, a strategic planning like entering in a new market or launching the new product, may look for partnership and do the acquisition, to recognize the investment opportunities in the business.

Figure of SWOT

The ultimate aim of SWOT Analysis is to identify the main internal and external factors which are vital for achieving the goal of the company. It can be come from the company's unique value chain. The SWOT Analysis can be classified into the two main factors they are internal factors which includes the strengths and weaknesses of the business and another is external factors which includes opportunities and threats of the company.

The internal factors can be taken as strength and weaknesses depending upon their impact on the business objectives. It may be possible that the thing which represents strength with respect to one objective may be considered as weaknesses for another one. The factors may have all the 4p's including personnel, finance and so on. The external factors may include technological changes, social changes, changes in legislation as well as changes in the marketplace. Generally, its results are mostly presented in a matrix form.

The SWOT Analysis is not only useful to profit seeking companies but also it's useful in decision making situation when the objectives are defined properly. The examples can be nonprofit organizations, governmental units. Its plays a significant role in pre crisis planning and preventive economic downturns during the tough times of business.

The company can consider its strength by having specialist marketing expertise, by creating new innovative ideas, providing good services or innovative product, also considers the location of business, its quality processes and methods and other source which adds value to the product or the services. It can considers its weaknesses like lack of marketing expertise, undifferentiated products or services, by providing bad services to its customers, by having damaged reputation.

If we look the external factors such as opportunities of the business which includes developing market such as the internet, by doing mergers, joint ventures or strategic alliances, entering into new market segments that can give more profits to the business also international market and the vacant market by an ineffective competitor. A threat for the business can be a new competitor in their home market, price wars, their competitor have a new innovative product or service, the competitors having the good channel of distribution of goods, it may possible that taxation is introduced on the business product.

If we take the example of J Sainsbury's plc company's SWOT analysis which is given below,

It is worth pointing out that SWOT analysis can be very subjective - two people rarely come-up with the same version of a SWOT analysis even when given the same information about the same business and its environment. Accordingly, SWOT analysis is best used as a guide and not a prescription. Adding and weighting criteria to each factor increases the validity of the analysis.

In many competitor analyses, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of vertical integration, historical responses to industry developments, and other factors.

Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. Accordingly, management often conducts market research (alternately marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common includes qualitative marketing research, such as focus groups, quantitative marketing research, such as statistical surveys, experimental techniques such as test markets, observational techniques such as ethnographic (on-site) observation, marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company's marketing analysis.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.

We are required to follow some rules for successful SWOT analysis; they are realistic about the strengths and weaknesses of your organization when conducting SWOT analysis, SWOT analysis should distinguish between where your organization is today, and where it could be in the future, SWOT should always be specific and avoid grey areas, always apply SWOT in relation to your competition i.e. better than or worse than your competition, keep your SWOT short and simple also avoid complexity and over analysis, SWOT is subjective.


The first step for the entrepreneur is to develop an innovative and original business idea. Many people are inspired by existing businesses. Others develop a hobby or spot a gap in the market. Before setting up, market research is necessary to analyse the intended market. Research looks at questions of who, what, where, when and how. For example:

Who is the competitor?

What is the target market?

Where are customers based?

When do they want the product?

How can we reach them?

These questions can usually be answered from secondary research sources. The answers help the business to develop an effective marketing strategy

Many new businesses fail because the owner does not have enough cash to last them through the first few months of trading, while their sales revenues start to come in.

Before you begin trading, you need to make sure you have enough money to set the business up and to cover your initial running costs. If you or your business partners don't have enough money yourselves, you will need to approach other sources of finance.

This factsheet outlines some of the options available for sourcing external cash to help you get started in business. There are various sources of finance available, but for new businesses the most likely options will be personal savings and informal loans from family or friends, banks, private equity investors, government sources of funding, Regional Development Agencies, local authorities, business support organisations, commercial services.


There are unique benefits and opportunities to starting a business in a tough economy. If you do your preplanning, think strategically and take advantage of every opportunity to minimize costs while maximizing the value you add for customers, you can build a foundation for long-lasting business success.

None of the organization can operate within a vacuum but instead to do so in an interactive environment. It is significant to do a macro and micro environment analysis in order to know about the external factors that may affect the management aims, objectives and strategies. The PESTEL Analysis and the SWOT Analysis has the ability to have the impact on the business.