B312 Group Report for Timberland

[pic 1]Timberland in the UK

Group: B312

Group members: 13305, 19278, 19384, 22913

Contents

Executive summary        3

Background of Timberland        4

PEST analysis        5

Micro environment        7

Internal environment        11

SWOT analysis        13

Recommendations        14

References        15

Executive summary

This report provides information, background, operating environment and we will give assessment of the current situation of Timberland in the UK.

Methods of analysis include a PEST analysis, microcosmic environment analysis, an analysis of the internal environment and a SWOT analysis.

Results of the analyses are:

1). Timberland doing business activities in the UK is low risk.

2). Timberland need to provide high level product to customers.

3). Timberland try to reduce the impact on the environment through many kinds of ways.

4). Timberland improve their technological and make product’s cost more low and product more popular

5). Timberland offers products for consumer demand.

6). Timberland set up a product quality management group to ensure the production standard are met.

7). Timberland intermediaries are independent retailers, department stores, sports stores.

8). Timberland have a good brand image, they have a lot of talented people.

9). Timberland have good management idea.

10).Timberland mainly product are footwear and accessories.

Background of Timberland

In 1918, Timberland founder Nathan Swartz began his shoe-making career in Boston and used injection molding technology to the industry. In 1955, Nathan Swartz bought the interest from Abington Shoe Company and asked his sons into the company. Then, producing truly waterproof boots and shoes in 1965. Date to 1973, the Swartz family created the “Timberland” brand name and produced first guaranteed waterproof boots. In 1986, Timberland went public on the America Stock Exchange (Our history Timberland, n.d.).

In 1986, the first Timberland Company was funded in UK, until December 31, 2010, the timberland company had 47 stores and 17 factory in Europe.  This company sells products in the UK, Italy, France, Germany, Spain, Austria, Belgium, and Switzerland. “Doing well and doing well” is their philosophy, and creating value for consumers, shareholders and employees (Timberland annual report 2010).

Timberland is known a company mainly produces outdoors products, most products provide for men and women from the upper middle class. The Timberland Company’s positioning is a complete outdoor sports brand.

PEST analysis

Political factors

The sales tax remain 20% for 5 years from 2011, 20% sale tax also is the highest percentage. Compare with sale tax in Canada (5%) and Australia (10%), the sale cost in the UK will be higher (HM Revenue & Customs cited in trading economics). And also, due to British government set the lowest wage to protect workers, the labour costs in the United Kingdom rose up to 104.80 Index Points in the beginning of 2015 which is the peak from 1959 (Office for National Statistics cited in trading economics). It means setting factory in the United Kingdom is unreasonable. According to estimate of Standard& Poors and Moody, the credit rating of the United Kingdom is AAA (trading economics). It shows that the political environment in the United Kingdom is stable. As a result, doing business activities in the United Kingdom is low risk.

Economic factors

According to statistics from trading economics, the consumption index form 276407 GBP Million in the end of the 2014 rose to 278001 GBP Million in first quarter of the 2015. It is worth mentioning that 278001 GBP Million is the peak from 1955 until 2015. Disposable personal income index in 2015 first quarter also grew to 277462 GBP Million which is more than 2 times as the index in beginning of 2014. Core consumer prices also reach the highest point (124.48) in first quarter in 2015 (Office for National Statistics cited in trading economics, 2015). This group of data point out that British people are willing to expense. This is an unprecedented chance for Timberland Company as if a golden age, the profit will increase gradually. In addition, high price level product should be paid produced, because customer might cost more money for their clothing.

Socio-culture factors

In current society, more and more people tend to do some outside activities such as mountain climbing and hiking. The concept of “healthy life” has deeply entered people’s mind. According to data, 55% of adult go outside once a week, 75% of adult do outside activities 1 time ever month regularly, 91% of adult get outdoors annually (Butler and Comley, 2014). This trend is likely to promotion timberland company sales, because timberland company is a leading global outdoor brands, for every person who truly love outdoor, Timberland is a reliable, sustainable development of the outdoor brands, by providing innovative, through outdoor test, beautiful and durable equipment, let customer get the most abundant outdoor experience. Furthermore, Entering the 21st century, fashion has become the indispensable factors in young people choose clothes, even middle-aged also began to favor those colorful avant-garde design products. For Timberland Company, it is a chance to introduce the characteristics of dependency. In addition, carbon dioxide levels in the air reached the highest point (400.71parts per million) over the 650,000 years (data from NASA). Human being have to face the most serious environmental situation, as a result, media for the call for countries and enterprises to reduce carbon emissions is increasingly fierce. Timberland always try to reduce their impact on the environment through a variety of ways - from retail store decoration and display, to product design and packaging, to the selection of raw materials.