Profiling The Business Of Victoria Plc Commerce Essay

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Victoria PLC is an international manufacturer and distributor of carpets, floor coverings and carpet yarns of mid to high quality. The Company is structured into four operating divisions according to the geographical areas: UK, Ireland, Australia and the Canadian. Victoria Carpets (UK) designs, manufactures and distributes floor coverings both within the United Kingdom and to over 40 export markets worldwide. Victoria Carpets in Australia manufactures and distributes a range of tufted carpets for the residential and commercial markets in Australia, New Zealand and North America. Munster Carpets supplies woven Wilton broadloom carpet and carpet tiles in Ireland. Navan Carpets distributes Axminster carpets to the hospitality and leisure markets, and Wilton and Tufted carpets to the residential and contract sectors. Colin Campbell is a trade only designer showroom catering to the architect and design community in Western Canada.



Victoria plc is a multinational company having its operations in Australia, Ireland, Canada or the UK. So they are subjected to all rules and regulations in any country within which they are operating. Victoria plc has main office in UK so they have to follow both UK and European laws. Decisions which affect organisations are made at governmental levels. For example, competition policy in the United Kingdom is determined by the European Commission and national government but is also monitored by local authorities through trading standards departments - and all this takes place against a background of global trading rules set by the World Trade Organisation. Organisations will perceive political change differently; some may feel threatened, others may see the changes as offering business opportunities. It is evident that decisions and actions made at the higher geo-political scales can have an impact on organisations, both large and small (Weatherston and Wilkinson, 2004). In the UK, planned investment in both people and products for the development of new business channels produced encouraging results.  The recruitment of key personnel in the Contract Commercial division delivered sales growth of 62% albeit from a low base, which helped buffer the decline in domestic sales to the residential market.  Other key appointments in both the UK Export division and the Irish operation pave the way for future growth and profitability in these areas.  Similarly, the recent appointment of Vice President Finance and General Manager to the Canadian joint venture will further strengthen that business. Furthermore, the government cut the corporation tax from 30% to 28% will help firms like Victoria plc with the recession and also maintain jobs.


This is the national and international economic situation in which business as a whole operates. Business in general will fare much better if the economy is growing than if it is in recession (Sloman and john, 2005). The recession has limited the success of this move in the current year. In the UK, the carpet market was estimated to be down by in excess of 20%, whereas Victoria's carpet sales were only down 9.2% from £24.86m to £22.57m (annual report,2009). Gross domestic product (GDP) in the UK grew at healthy rates across the review period. This is reflected in the flooring market in the UK, which has generally mirrored economic conditions. (Carpet & floor coverings, 2009 key note). The Group believes that it has continued to gain market share despite these very difficult conditions, which is a testament to its products, service and people. Victoria's carpet sales into the UK residential market through its targeted independent retailers were down by 17.5% in the year as the impact of the financial crisis, housing market collapse and worldwide recession affected consumer discretionary spending (Annual reports, 2009). The demand for use of synthetic yarns in carpets has continued to grow in the Australian market and has been an important factor in the company's continued growth. Whilst the global economic downturn has affected the Victoria's performance in the financial year, with profit before taxation for the year decreasing by 58.3% to £1.46m, all Group companies achieved a pre-tax profit and the Group remains cash generative from its operating activities. However, the Victoria plc remains confident that the benefits of this brand will be realised as the economy improve. UK exporters, however, have welcomed the weaker pound as it makes their goods cheaper to foreign markets (


People are important in the economy as both producers and consumers of goods and services (Ian Worthington, 2006). For any company to sustain and attain growth social factors play an important role, so it is the duty of the organization to give something back to the society also. Victoria has strong links with the local communities where they operate and often employed many generations of the same families within their operation. Victoria supports their employees to raise charities and organizations within the communities in which their staff resides and work. In UK, Victoria is very much involved in the organization of the annual carpet trade's charity golf tournament. Victoria has its own cricket club, sponsor local cricket team and provide chances to local student to gain work experience.  Victoria promotes a "Give as You Earn scheme" whereby employees can make a regular donation through the payroll to a registered charity (Furnishing Trades Benevolent Fund). Last year's proceeds of £21,000 were shared between the Furnishing Trades Benevolent Fund and the Macmillan Cancer Relief.


New technology creates new products. There is a great impact of technology in industrial environment. Technologies improve quality, can reduce costs, save time and lead to innovation. In last ten year there is exclusive change in technology. Victoria is very open to accept new technologies, Video and telephone conferencing facility has been installed in every office to reduce the travel and save time. For example, the internet and the television provided the best and easy way to interact with customers by providing executable information. Hence technology saves their time, money and grant admittance to quality content of value. These facilities can benefit customers as well as the organizations providing the products. Innovation in technology and new machinery Victoria increases capacity and capabilities, improvement in designing, finishing and quality of the products. Making innovation is a great idea for companies because people likes changes and prefer changing things. Therefore, company should use new idea to fulfill the customers need and requirements. The introduction of new technology in the form of thermal splicing in the UK's yarn spinning division is delivering carpet yarns of a higher quality to Victoria's tufting division. This has significantly improved the tufted carpet productivity and has reduced the costs of manufacturing tufted carpets.


Environmental factors that affect the carpet manufacturing industry in which they operate. Hazardous substances that are likely to cause environmental changes will be regulated by law because of their toxicity, persistence and tendency to bio-accumulate. It is very difficult to get rid of them once they are in the environment, or in animals or humans. Victoria's contribution towards environment is that they manufacture a range of products which are all biodegradable and of low toxicity. All products made by Victoria meet the high standards demanded by the environmental movement and by individuals with sensitivity to chemical toxins. To overcome from air and noise pollution all the vehicles and machinery used in manufacturing unit in Victoria are carefully selected to ensure greatest efficiency and environmental friendly. To carry full loads from manufacturing unit they ensure maintenance check up and servicing at regular intervals. Victoria is keen to reduce wastage and sent all waste for recycling to government certified company. For water recycle Victoria has its own water recycling plant


Governments create the legal framework within which companies operate, most obviously in areas like health and safety, employment and monopolies legislation (Boddy and David, 2005). Legal factors also affect the textile manufacturing industry in which the industry operate. In recent years in the UK there have been many significant legal changes that have affected firms' behavior. To comply with the current legislation Victoria is continually striving to achieve a high level of Occupational Health & Safety performance. Victoria plc beside with The Carpet Foundation and other manufacturers and retailers throughout the UK, have pioneered a Health & Safety Forum that meets regularly to share management initiatives and best practices.

Businesses operate within a framework of law which has a significant impact on various aspects of their existence. Laws usually govern, among other things, the status of the organisation. This legal environment not only constrains and regulates a firm's operations, but also provides an enabling mechanism through which it is able to pursue its objectives, particularly the achievement of profits through entrepreneurial activity (Lan and Worthington,2006).

Within the carpet industry, practices are self-regulated. The carpet Foundation has its own code of practice, approved by the Office of Fair Trading, which regulates selling issues such as guarantees, cancellation of orders, conciliation and arbitration in disputes. The Foundation also regulates quality through the use of a Quality Mark, which uses the results from British Standard product tests. (


There are numbers of variables that help determine how attractive an industry is and which shape the larger term profitability for different companies that make up the industry (baines and fill, 2008). According to (porter, 1980) the intensity of competition in an industry is neither a matter of coincidence nor bad luck. Rather, competition in an industry is rooted in underlying economic structure and goes well beyond the behavior of current competitors. The race of competition in an industry depends on five basic competitive forces. By the relative power of each of the forces, an organization can identify how to position itself to take advantage of opportunities and get over from circumvent threats. The forces are the threat of new entrance, the supplier and buyer power, the threat of substitute products and competitive rivalry, understand the nature of each of these forces gives organizations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market (Thurlby, 1998).


The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need. There are few substitute Laminate flooring, Engineered Wood, flooring Solid Wood, Flooring Cork flooring and tiles flooring for Victoria. The threat of substitution is also affected by switching costs- that is, the costs in areas such as retraining, retooling and redesigning that are incurred when a customer switches to a different type of product or service.


The threat of new entry of new entrants into an industry depends on the barriers to entry that are present, coupled with the reaction from existing competitors that the entrant can expect. They can take diverse forms and are used to prevent an influx of firms into industry whenever profits, adjusted for the cost of capital, rise above zero. On other hand it is difficult to enter into a market when economically you are not sound enough to challenge the market leader and in such scenario the company really has to prepare itself for bearing high cost in marketing and advertising in order to enter into the market. The entry costs are high because heavy investment is required in marketing or equipment. The existing firms may react aggressively to any new entrant with a price


The UK carpet industry is facing tough competition from the Indian, Bangladeshi and Chinese textile industries. The cost of carpet manufacturing in UK is high as compared other countries. Buyers are watching the global supply position & if UK Entrepreneurs are not willing to change, the buyers will shift to India, Bangladesh and China which has developed a large supply base for Textile Products. Competitive rivals are organization with similar products and services aimed at the same customer at same time.


Kipenbergerger (1998) states that it is often useful to distinguish potential buyer power from the buyer's willingness or incentive to use that power, willingness that drives mainly from the "risk of failure" associated with a product's. buyers have got a high bargaining power as they are aware of the prices charged by other suppliers in the market and so high prices charged by suppliers will affect the volumes they sale and revenue.

This force is relatively high where there a few big players in the domestics as well as overseas. Strong customers/buyers can force a decrease in costs or increase in quality. Victoria main buyers are the residential market, high value, good margin sectors, government institutions and major retail groups. The John Lewis Partnership is the Company's largest customer and Victoria is the largest supplier of carpet to John Lewis. Victoria is continually seeking long-term relationships with its customers and focusing its efforts in establishing itself as 'the supplier of choice' whilst also constantly striving to deliver added-value and higher levels of service. Also in 2006/2007, Victoria carpets wins supplier of the year and best product.' 


The bargaining power of suppliers is huge in any carpet industry, almost all the raw materials which are needed for making carpet are coming from various parts of the country, these supplies and labors sometimes demand high price or refuse to work for many reasons like recession and stagnation, Labor unions have sufficient powers to make alterations, factors like job cuts and lay-offs also act as power of suppliers and the agencies demand more commissions for supplying these goods to and from companies. The bargaining can also come from employees regarding their salary packages. The bargaining also comes from the difference in price quotes from suppliers


Stakeholders are any group or individual who can affect or is affected by the achievement of the organization (Friedman and Miles, 2006). Stakeholders are any individual or a collection of individuals with an interest in an organisation. Some stakeholders will be internal to an organisation and others will be external. The main internal stakeholders of Victoria are employees, managers, directors, trade unions and shareholders. The external stakeholders are suppliers, customers, competitors, financiers, government and the general public. Various categories of stakeholder will affect or be affected by the organisation in diverse ways; hence stakeholders have different interests or stakes in the organisation (Capon, Claire, 2004). The interests of different stakeholder will vary and may even clash with each other. Employees may seek high wages and above-inflation pay rises, while customers would prefer lower prices and lower costs, which are not possible if labour costs are high. Stakeholders differ in terms of the power that they hold and the degree to which they are enthusiastically interacted in the strategies that an organization is pursuing. Victoria values their employs and committed to achieving equality in employs policies, procedures and practices. Victoria strives family-friendly employment policy for their employ.

Corporate social responsibility (CSR) is a well used business and management term which often associated with the phrase 'enlightened self-interest'. How organisations plan and manage their relationship with key holders. Corporate social responsibility is a responsibility of organization to its societies and stakeholders (Tench and Ralph, 2006).

Victoria is very careful to fulfil the social and environmental responsibilities so that it does not affect the local community. It complies with the national laws and regulations and with international concerning protection of the environment, working conditions and child labour. According to (Rose and Adam, 2008) Businesses that take a hard look at their internal operations will notice opportunities for the development of effective environmental management systems. Those systems not only reduce liabilities and risks, because less pollution is produced, but they also increase profits because all resources are used more efficiently and effectively, making informed consumers more likely to buy the product or service even at higher per unit prices.

Victoria manager arranges a regular meeting with their major stakeholder and partner to discuss on various type of issue and to get advice from them. For their minor stakeholder Victoria arrange an annual meeting. By working together with company trade union and organization, the managers able to learn, share experiences and accomplish more than it could have done working on its own. Managers who do not devote time and resources to with stakeholders for an extended period may have reason to find that their commitment is in doubt. Victoria managers are the stakeholders that have the power to control the organisation.

The employee can rely to carry on Victoria's operation because they are primary stakeholder group. This group is interested in the security of their employment and their benefits. Shareholders are the owners of the company due to which they have seriously concern with the profitability and the running of the business. As per the performance chart of Victoria plc it shows increasing trend throughout the time period of three year which reflect the financial strength of the company.