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QAB020C410A Business Organisation - Hobby Craft

University: University of Roehampton London

  • Unit No: 6
  • Level: Undergraduate/College
  • Pages 10 / Words 2500
  • Paper Type: Assignment
  • Course Code: QAB020C410A
  • Downloads: 0
Question :

This respective report will cover the following questions that are explained as follows:

  • Information on the chosen business company
  • Describe the allocated business environment
  • Application of correct analytical approaches with examples
Organization Selected : Hobby Craft


Business organisation refers to an entity whose aim is to perform several functions such as manufacturing products and services and deliver the same to meet the needs and requirements of people. It is operated in business environment which are more complex in nature due to having presence of internal as well as external factors. Such influencing factors include employee’s behaviour, political and economical fluctuations, technological advancement etc. For this, business strategy has been formulated which drives an organisation as well as their employees to perform its roles and responsibilities in an effective manner so as to compete with challenges comes due to influencing factors in market. The present assignment report is based on Hobby Craft which is engaged in retail sector providing art and craft and bobby materials to the people of UK (Overview of Hobbycraft, 2018). The company has decided to allocate its business to Austria due to which it analyses the business environment along with an application of analytical approach.

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Information of Hobby Craft Group

It is a retail organisation of United Kingdom which is engaged in providing multiple ranges of products in the area of card making and scrapbooking, knitting, needle crafts, jewellery making and much more. The company also deals in offerings art materials, baking items, books and magazines etc. It was established in the year 1995 whose headquartered is in Christchurch, Dorset, UK. It is operated in more than 60 locations in UK whose revenues in the year 2014 have been recorded as 7 million pound (Barberá and et. al., 2012). It is operated and runned by the Dominic Jordan who is currently CEO of company where there is around 1000 employees are employed which are continuously giving its best efforts in achieving its mission, vision and objectives which are stated as under:

Mission: The mission statement of Hobby Craft is “to provide friendly and most pleasing shopping experience to customer in a lean and well merchandise store at fair prices”.

Vision: The vision statement of Hobby Craft is “to reach company’s products and services to the maximum number of location through opening outlets at different location and nations.

Competitors: There are huge numbers of competitors such as Argos, WH Smith, The works etc. which are giving tough competition to Hobby Craft in the competitive market.

Size: Hobby Craft has operates its business in more than 60 locations where more than 1000 employees are working for the growth and development of company.

Financial performance: Hobby Craft has attained stable financial position in market according to its size and scope. According to their financial reports, the company currently has 22.3 million pound in case, 86.5 million pound as net worth, 56.7 million pound as total current assets and 30.4 million pounds as total current liabilities. It has been clearly seen in the below graph that he company is financially stable in the market for number of years (Key Financials, 2018)

Figure 1Key Financials

Source: Key Financials. 2018

Financial statement of Hobby Craft

Source: Financial statements of Hobbycraft. 2018

Interpretation: It has been identified from the above graph that there in decrement in total asset of Hobby Craft in the year 2018 as compared with the year 2017 i.e. approx. 4000 million pound which is not a good sign for company.

Background to Business Environment

Business environment is complex and contingent in nature which can be changes on frequent basis due to having presence of internal as well as external factors. Such influencing factors includes political changes, economic stability, technological advancement, environmental changes etc. which can either makes negative or positive impact on the business operations of an organisation. In the present scenario, Hobby Craft is decided to allocate its business to Austria with the purpose of expansion of business (Financial statements of Hobbycraft, 2018). To achieve strong stability in new market, the management of an organisation is held responsible to analyse the complexities of business environment which can support or restrict business to achieve its desired goals and objectives within pre-determined time period. It can be done through conducting PESTLE Analysis which is useful to analyse various influencing factors such as political, economical, social, technological etc. It assists management in identifying the effectiveness of their decisions of allocating business to Austria. Analysis of such factors for Hobby Craft is conducted underneath along with their opportunity to grow and threats which creates problems towards their business allocation decision:

Pestle analysis of business environment in Austria along with threats and opportunities

Political- These factors involves stability of government, tax policy, labour law etc. These factors involve the government interference for the company which can either support or restrict Hobby Craft to reach their business in Austria.

Opportunities- Due to the political stability in the Austria, the company has huge potential for growth and achieves profitability for longer period of time.

Threats- The dependency on EU for funds can be a major threat for the company which can hinder them to sustain in Austria market for future period of time.

Economical- These factors affects the operation and decision making process which includes interest rates, exchange rates, inflation rate etc. Fluctuation in economic situations of Austria may affect the sustainability and profitability of Hobby Craft in Austria.

Opportunities- Well developed market, high standard of lifestyle and close ties with EU will increase the profit and productivity of company.

Threats- Financial crisis and economy downturn leads to recession where company can face problems regarding their long term sustainability.

Social- These factors includes culture, health, population growth rate etc. which affects the demand of products of a company. It may affect the sales and revenue of Hobby Craft either in negative or positive manner (Campling, 2012).

Opportunities- Rich culture, high living standards will lead to increase in profit and revenues of the company so, a lot of opportunities lies for the company in this market. It supports the growth and development of company in Austria within shorter period of time.

Threats- Lack of migration among Austrian people can hinder the growth and performance of company in terms of skilled workforce. Due to this, they may fail to deal with local citizens of Austria due to having lack of knowledge about their culture and beliefs.

Technological- It includes latest and updated technological aspect such as R&D activities, automation etc. which impacts the performance of a firm. It may reduce the cost of operations as well as increases the reach of targeted customers.

Opportunities- Austrian government support innovations and technological advancements due to the untapped foreign market for innovative products.

Threats- Austrians doesn't like change or to adopt technological advancements which is a problem for increasing customer base.

Legal- These includes laws and regulations of a country which affects the business in that country. It is essential for management of Hobby Craft to analyse such factor as it assist them in maintaining healthy relations with their workforce through implementing laws and legislations. But before that the management of Hobby Craft should understand all the legal laws and legislation framed by the government of Austria for the organisation operated in their nations (Scanning the Environment: PESTEL Analysis, 2018)..

Opportunities- Government is supporting companies by providing loans and to prevent insurgency in the Austrian market. It increases the capacities of Hobby Craft to maximise the satisfaction level of targeted people by investing more in creating new and unique art designs which can easily grab an attention of large number of customers in Austria.

Threats- Labour law in Austria is very strict which leads to reduced or unskilled work force. Therefore, non-compliance of labour law may bring their existence comes into danger in Austria.

Environmental- these factors are related to the various environmental laws for protecting environment. It is important to analyse such factors as it assist management of Hobby Craft to achieve strong brand image and goodwill in Austria market.

Opportunities- Austria is comparatively free from natural disasters which are an opportunity as these disasters results into loss of property and natural resources.

Threats- The environmental laws for regulating carbon waste and industrial pollution is a threat due to their carbon based products. Due to this, their products may opposed by the people of Austria due to having bad impact on the healthy environment of nation.

Application of Analytical approach

Analytical approach is an essential requirement of an organisation to adopt which assist them in breaking out the problems into small pieces in order to resolve them as quickly as possible within shorter period of time. Hobby Craft is expanding its business to Austria where business environment is fluctuated on regular basis which can affect their sustainability in Austria market. For this, the management should be responsible to apply analytical approach such as Porter five forces which assist them in understanding the competitiveness in new market environment of Austria (Clark, 2012). It enables management of Hobby Craft to develop an effective strategies and plans in advance in order to face complexities of business environment. Therefore, to achieve high sustainability and profitability the management of Hobby Craft should adopt such models in following way:

Porter’s five forces

This model was developed by porter which states that there are five forces which determines the competition in an industry. This tool is widely used by the companies in order to find out the industry attractiveness. The five elements of porter's model are given below:

Threat of new entrants- Companies in the art and crafts industry doesn’t face high competition from new entrants in the crafts sector. This is due to the strong entry barriers in the industry. So, from a new entrant point of view, it is a bad decision to invest in the handicrafts industry. Hobby Craft should introduce new and innovative products and services along with heavy invest in R&D which will attract new as well as old customers to buy the new product. Increased and strong customer base of company will reduce the chances of new entrants.

Strategies adopted by Hobby Craft to tackle threats of new entrants:

  • By introducing new and creative art designs which cannot be available by their rivals. This provides an opportunity to company to sell products on fixed prices.
  • By developing economies of scale as it can lowering the fixed cost per unit.
  • Conducting market research to analyse actual preferences and demands of customers related with their art crafts (Falkner, 2017).

Threat of substitutes- Threat of substitutes is a strong force for concern in the handicrafts sector. Company should become service oriented instead of product oriented. Company should develop some plans for studying the actual needs and demands of customers rather than the products which the customer is buying. Company should adopt suitable policies for increasing the switching cost of the customers.

Strategies adopted by Hobby Craft to tackle threat of substitution:

  • By providing creative arts and designs which can easily grab an attention of people towards company’s offerings.
  • By differentiating their products with small unrecognised retailers through communicating people using internet platform.
  • By offering value to the customers in exchange of payment.

Degree of industry rivalry- Competitive rivalry in the art and crafts sector is not very strong. This is because of the competitive determinants which were found to be intermediate motivators. Because of this new players don't want to engage in fierce competition from the competitors. There are limited number of competitors such as Argos, WH Smith, The works etc. which can only affect the sales of company at low level but did not influence their stable position in market Hobby Craft should implement suitable strategies for reducing the competition such as merger or joint venture which will increase the market share of the company.

Strategies adopted by Hobby Craft to tackle intense rivalry:

  • Through building a separate identify of its unique product.
  • By collaborating with small retailers of Austria which are engaged in similar sector operated at small level in order to increase the market size.

Bargaining power of suppliers- Supplier power in the handicrafts industry is common to an average level as it significantly shapes the strategies of companies and because of which it could affect the industry’s attractiveness. Less bargaining power of suppliers will positively affect the company due to the more companies in providing raw materials. Whereas high bargaining power of suppliers will negatively impact the company due to the less number of raw materials providers. Hobby Craft should build their own efficient supply chain with various suppliers whose businesses depends upon the company (Forsgren, 2017).

Strategies adopted by Hobby Craft to tackle supplier’s power:

  • By selection of best distribution channel who can promises to them to supply its products to customer on time.
  • By experimental with existing art and crafts product designs through using different materials so that if the prices of raw material goes up then it will easily be shifted to another.
  • Developed reliability among suppliers whose business depends upon firm.

Bargaining power of buyers- Buyers of the crafts products could exert pressure on the Hobby craft company especially when the switching costs are too low among the buyers and when buyers know about the products of other crafts companies. Company should introduce the best quality products with the minimum prices to the customers in order to get their attention. New and improved products will help the company to retain their old customers as well as gain new customers. Customers often seek discounts and offers on the products which can also be done in case of Hobby Crafts which enable the company to attract more customers (Ghezzi, 2013).

Strategies adopted by Hobby Craft to tackle buyer power:

  • By providing differentiated products which can decreases the chances of shifting buyers to their rivals.
  • By providing additional services while making transactions with company.


It has been concluded from the above project report that it may quite tough for Hobby Craft to expand its business to other nation such as Austria as it must have proper knowledge and understanding of market so that any influencing factors of business environment cannot be affect the existence of company in adverse manner. Take assignment help service from Instant Assignment Help. They are the best assignment writing service providers in the UK. Their experts are highly qualified and skilled. They will provide you with a plagiarized free assignment at a low price which will help you in achieving A+ grades. So contact Instant Assignment Help for the assignment writing service. Management plays a critical role in analysing business environment through conducting PESTLE Analysis along with the analytical approach such as Porter Five Forces which assist them in identify the competitiveness of market. It makes easy for them to make appropriate decisions and plans in advance so as to compete with the influencing factors that come in between the expansion of business of Hobby Craft in Austria. 

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