PESTLE Analysis For Dunnes Stores In Ireland

Economic factors affecting Dunne’s store in Ireland

Strategic management involves the setting up major and clear organizational goals so as to increase efficiency in the firm (Dudin, Prokofev, Fedorova, and Frygin, 2014, pp34). Strategic planning aims at evaluating business goals, objectives and plans so as to focus on the company’s success and efficiency. To achieve this, there are a series of steps or guidelines to follow. These are management processes which involves defining the organizations strategy where managers make a choice and determine what strategies to put into place.

PESTEL analysis is an acronym used to output the external factors affecting a company. The individual letters in the word stand for the following; Political, Economic, Social, Technological, Environmental and finally Legal. Pestle analysis is used by dealers to analyses and monitor the exterior environmental issues affecting an organization which are used to detect coercions and feebleness to be used in Swot analysis.

Dunne’s stores is an international trade chain that mainly sells a combination of various things including foods, clothes and households’ wares and is based in Ireland. The store has various branches in other countries such as England, Spain and it was also in Scotland. The main commodities sold in the store are mostly groceries, clothing and textiles.  The groceries serve as the main commodity sold in internal regions of Ireland although few samples can be found in other branches such as in Spain. In some stores, only textiles are the main commodity while in others it may contain a supermarket.

The stores were originally started in 1940s as a small-scale shop. The owner who was ben Dunne felt that he needed to start his own store. Initially, Dunne’s shops, originally called Dunne’s company, dealt with clothes and fabric materials. Dunne discovered that he could introduce apples and oranges to inspire buyers who would come for them during lunch breaks (Lai et al 2015 pp 840). The addition of food commodities eventually resulted to the business extending its stores where they fully operated as grocery stores. Dunne’s Stores focused on escalating and increasing its territory

Economic factors affecting Dunne’s store in Ireland

Interest rates such as the discount given in Dunne’s stores played a major role in the rise of Dunne’s stores as people felt motivated and stayed loyal to Dunne’s stores (Raupeliene and Luke, 2017, pp. 1297). It is seen that these discounts made Dunne’s stores thrive as he was able to remain at peak level all through to the 1980s.

Quality management is an economic factor that saw the rise of Dunne’s stores (Hitt. and Duane Ireland 2017, pp 6). The owner who managed his business at all times was a good manager. A skill that led him to even open new branches countrywide and even to the outside countries. It is seen that even after his death, the children were also good managers and were able to maintain the at the top percent businesses in Ireland.

A diversity of ideas it is seen that Dunne’s one person who had a great business mind. He figured out how he would maintain his customers and what products he had to add so as to attract more customers. It seen that new products attracted customers and this led to high consumer rates (Kamunge, Njeru and Tirimba, 2014 pp 1).

Quality management

 A proper strategic planning oh how to expand and maintain his business. During the expansion, it is seen that Dunne was not greedy in expanding his stores but he did it at a pace he could afford to maintain without making any losses.

In the early years, it is seen that Dunne’s stores played an important role in Irelands economy as it was the leading business in Ireland. In recent study, it is seen that Dunne’s stores commands about 22.5% of the total market and is the leading supermarket in Ireland.

Table to explain the economic part.

Government policies is also another factor that affected Dunne’s stores in Ireland where the government began investigation what operations were being carried out in the business and whether the business was paying the tax.

Political events like the kidnapping of Dunne which led to his death. The family encountered a major blow which saw them change the management (Bouazza, Ardjouman and Abada 2015 pp 101). Also, the events like the consecutive death of two sisters in the Dunne family had huge implications. It is also noted that Dunne’s son had been arrested claiming that he had cocaine (Robson 2015 pp 9). The family had to give a hefty fee to see their brother out which also had huge implications in the business. Politicians also started coming. There were also unusual operations in Ben Dunne’s business practices, such as channeling of Dunne’s business funds into the outside bank accounts of several Ireland’s politicians, led to decline in the business. This led to the government appointing officers to investigate the operations of the business.

Table to explain the political part.

After the death of some family members, the business was set to be run by their fourteen-year-old sister had minimal knowledge.

Introduction of competitors. At a point where the business was poor, there was a rise of new competitors who really thrived leaving Dunnes store behind (Hill 2017 pp78). The business had to survive and had to improve so as to remain competitive. They used deeper discounts to put the Dunne’s stores discount methodology to pressure.

There exist different types of segmentation. Some of them are described below.

 Market segmentation focuses on distributing your intended market in to amicable sets.  It also creates subsections of a market in relation to demographics, wants, urgencies, communal benefits. Etc.

Dunne’s was able to open more stores country wide and also outside the country as he had a good strategic plan in place. He introduced a variety of new goods like the textiles even in the other outlets that had been opened (Jixin, Peng and Yajun 2015, pp 23). This is a strategy to attract customers and it is seen that this bore him fruits. He was also able to determine what commodities he could introduce to his store and also to the outside branches that would attract more customers. He introduced this such as clothing and had the required outfits according to their tradition.

He introduced his branches to areas that were densely populated – this is an instance of geographical segmentation (Hill, Jones and Schilling, 2014 pp4). His main aim was to introduce his business beyond Ireland thus creating a new target consumer group. Depending on weather conditions, culture you can decide on what to advertise or even what commodity to add in your store. In America, he presented a new stockpile set-up, implementing the American-style suitability store concept. This is also an example of geographical segmentation.

A diversity of ideas

Firmogratic segmentation. It is seen that Dunne introduced his business in areas where he knew the growth rate was high. Outside the country, he introduced his branches to countries such as Spain which he knew that they had a higher economic growth rate (Olah, Butchart, Symes, Guzmán, Cunningham, Brightsmith, and Heinsohn 2016, pp 205). If a country has higher economic growth rate, more developments in terms of infrastructure and organizations are likely to occur. This will provide a good environment for the business to thrive.

New management was assigned to the store which saw the business take another direction. They added new furniture and new product mix leading to it moving to the mid position in the market category. Within a period of time, it was able to level up with the others and emerge among the giants in competition.

The new management was determined to improve the performance of the store and gave it their all as the skills had been imparted to them. This is a factor that led to the rising of Dunne’s stores back to its competitive level. The competitors felt threatened by the rise in the business as they it had a lion share in the market which they are to reclaim.

Use of different types of segmentation to survive in the world of competition (Clark, Flèche, Layard and Powdthavee 2016, pp 34). The new management set up a plan so as to thrive in the world of competition and using various segmentation methods was a good idea that totally worked.

Once there was retirement in management, the preceding manager ensured that the remaining team was adequately taught and had the necessary qualities to lead the organization.

 With the continued improvement in the business operations, the business was able to set up a new flagship store in the year 2007 in Dublin, Ireland (Castaño, Méndez, and Galindo 2015, pp1496). This served as a large commercial development and helped root its new place in business. Old building was removed and some renovated to continue expanding the business. To date, Dunne’s store is among the top companies and the biggest grocery retailer in Ireland.

Reference

Castaño, M.S., Méndez, M.T. and Galindo, M.Á., 2015. The effect of social, cultural, and economic factors on entrepreneurship. Journal of Business Research, 68(7), pp.1496-1500.

Clark, A., Flèche, S., Layard, R. and Powdthavee, N.N., 2016. The big factors affecting life satisfaction are all non-economic. LSE Business Review.

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Jixin, H., Peng, Y. and Yajun, G., 2015. Research on Affecting Factors of Building Economy of Tianjin City: an Exploratory Research Based On Grounded Theory. Regional Economic Review, 3, p.023.

Bouazza, A.B., Ardjouman, D. and Abada, O., 2015. Establishing the factors affecting the growth of small and medium-sized enterprises in Algeria. American International journal of Social science, 4(2), pp.101-115.

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Raupeliene, A. and Luke, R., 2017. Factors Affecting Human Capital Formation in Logistics Enterprises. In International scientific conference RURAL DEVELOPMENT 2017 (pp. 1292-1299).

Kamunge, M.S., Njeru, A. and Tirimba, O.I., 2014. Factors affecting the performance of small and micro enterprises in Limuru Town Market of Kiambu County, Kenya. International Journal of Scientific and Research Publications, 4(12), pp.1-20.

Dudin, M., Prokofev, M., Fedorova, I. and Frygin, A., 2014. The world experience of transformation of innovative approaches to assurance of financial stability of social economic systems.

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Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic management research. The Blackwell handbook of entrepreneurship, pp.45-63.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

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