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Body Context

Discuss about the Impact of Contextual Factors.

Managing business is one of the major challenges that are faced by all the companies in any of the industry. Managing business refers to management of all the activities and processes of the business. These processes are affected by many factors that are domestic or international in nature (Wheelen & Hunger,  2011).  The continuous changing environment or the dynamic nature of the business environment forces the businesses or the companies to consider some of the contextual factors in managing the business. The consideration of these contextual factors is important because these act as the basis for the variations in the business processes and the structure of the company. Most of the companies fail to involve the context in determination of the performance level of the business. The context also has its impact on the performance deviation sometimes. To analyze the impact of context on business processes, it is necessary to convert the context into contextual factors (Brinckmann, Grichnik & Kapsa, 2010).

Contextual factors of the business can be defined as the factors that show the characteristics of the business. Such as size of the business, the industry it operates in, the life cycle stage of the business, the age of the business in the industry, technology, strategy, structure etc. these are considered as domestic contextual factors because these factors are internal in nature. The contextual factors that affect the company or the business from external environment especially in terms of expansion of business internationally are considered as international contextual factors. These contextual factors that have their impact on the business of the company can be determined by conducting the PEST analysis (Trkman, 2010). PEST analysis helps in environment related to political factors, economical factors, social factors and technological factors (Ho, 2014).

All the factors discussed above have their impact on the business processes of the companies such as Bunning’s warehouse. It is the company that operates in Australia as well as overseas. It is one of the largest household hardware chains in Australia. Bunning’s is now under the ownership of Wesfarmers. The history of the company suggests that it was founded in 1887 by two brothers in Australia. It was initially a private company but was converted into public company in 1952. The actual business of Bunning’s has started in 1994 with the first warehouse store named Bunning’s warehouse in Melbourne (Chittithaworn, Islam,  Keawchana & Yusuf, 2011). As far as the size of the company’s is considered, it has been identified that the company as around 300 stores that employed around 30,0000 employee all over. According to the size of the company in terms of number of stress, it is big enough to give competition to others in the industry. Size of the company affects the business in terms of providing the advantage of being known among the customers. However, the critical issue that generates in the company is managing such a large organization. As stated that the company’s first store was opened in 1994, so that company has also has the advantage of being established brand. This is because it has been there in the industry for so long. The problem that is associated with the old company is that it is not very much updated with new environmental technologies and thus faces competition from the new companies that enters the market. Another domestic contextual factor that affects the business of the company is its stage of the lifecycle. The stage of lifecycle refers to the stage or the position of the business in its whole cycle of life. The initial stage is known as the stage of initiation where the strategies of companies are related to penetrating into the market. The next stage is the stage of growth, where the business grows rapidly followed with the stage of maturity where the business growth saturates at one point (Bayo-Moriones, Bello-Pintado  & Merino-Díaz de Cerio, 2010). After that the business moves to declining stage where it crosses the saturation point also. As far as Bunning’s warehouse is confided, it is at the stage of maturity. This is because the company is too old and serving the customers with the same strategies like before. The company has to implement the strategies that take it to the stage of rebirth and re growth. The strategies of the company stay at three pillars. The first pillar is related to the lowest price offering. This strategy is implemented by the company from initial times. Other pillars of the strategies are the wide range and the best services (Biddle, 2016).  The industry that the company operates in is also one of the contextual factors that affect the business of the organization.  The retail industry in Australia is very competitive and thus the increase number of hardware stores in Australia such as Home Hardware, Australian Outdoor Living and Classic Home Improvement are the competitors of Bunning’s warehouse that gives tough competition and makes the industry competitive. However, Bunning’s warehouse is still sustaining the competition with the new strategies such as DIY strategies. These strategies help the business to compete with the competitors and to attract the customers every time with fresh service and offers (Hill,  Cronk & Wickramasekera, 2013).

Conclusion

Not only the domestic contextual factors affect the businesses of the company but the international factors such as the factors like political, technological, economical and social affect the working of the company. As far as the political factor of the country is considered, it is identified that there are three elements of political factors, the first one is the government policies, second it’s the support from the government and third one is the corruption. In situation of Bunning’s, it has been identified that the company has moved to Ireland and UK by taking over the stores of Home base in UK. The brand has been change from Home base to Bunning’s. Wesfarmers claimed that they will support the company and takes it to UK. The political environment or the factors of UK also supports the company to take over the stores of Home base in UK. This helps the organization with the well-established infrastructure and a framework to improve the sales of the company. Next factor is the economic factor. Economic factor is related to the economy of the international country where the company would be operating. As the economy of UK is concerned, it is very much stable and supports almost all of the industries to cater the customers in the place. Social factors are another set of factors that can affect the company. The social life of the people in UK and in Australia is very different. The UK people have different choices of modern patterns in hardware’s which was not the preferred choice of Australian people. Thus, the company likes Bunning’s needs to change their processes according to the choice of the UK people and that’s what the company does. As far as the technology is concerned, it has been analyzed that it has a great impact on the company’s that operates in hardware. This is because hardware is so much related with the latest technology. Bunning’s is the company that has great technological involvement (Shabanova., et al. 2015).The company always uses latest technological gadgets in the warehouse ad serves the customers with the same. This is the competitive advantage for the company. The DIY approach of the company is about ready to be innovated. This suggests that the company always remains ready for the innovation as per the technology in the environment or the market. Other than these factors, the practice of the companies to support its customers is also a great job they were doing in terms of processes. In earlier times, the people who walked into the store of hardware do not have idea if what they want and may have many queries regarding the products. But, the customer support by the company that has been provided to the customers makes it easy for them to choose their products. This proves is the result of the impact of requirement of the customers. The change in the environment or the needs of the customers is one of the major factors that can be considered as contextual (Worthington  & Britton, 2015).

Conclusion

It has been concluded that not only the factors that are domestic in nature can affect the functioning but the factor outside the organization like political, economic, social and technological also affect the processes and structure of the organization. The factors that describe the characteristics of the organization are known as contextual factors. These contextual have their impact on the Bunning’s warehouse Australia and UK. The process of the company at both the places differs because of the difference in these factors at different places. So, the company should consider the contextual factors at the time of framing the policies and the processes of the company.

About Us. (2017). Bunnings. Retrieved 16 April 2017, from https://www.bunnings.com.au/about-us

Bayo-Moriones, A., Bello-Pintado, A., & Merino-Díaz de Cerio, J. (2010). 5S use in manufacturing plants: contextual factors and impact on operating performance. International Journal of Quality & Reliability Management, 27(2), 217-230.

Biddle, I. (2016). The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters battle. Busidate, 24(3), 3.

Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms. Journal of Business Venturing, 25(1), 24-40.

Chittithaworn, C., Islam, M. A., Keawchana, T., & Yusuf, D. H. M. (2011). Factors affecting business success of small & medium enterprises (SMEs) in Thailand. Asian Social Science, 7(5), 180.

Hill, C. W., Cronk, T., & Wickramasekera, R. (2013). Global business today. McGraw-Hill Education (Australia).

Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), 6478-6492.

Low, V. I., sector Food, G. I. C. S., & Retailing, S. (2016). Home away from home.

Shabanova, L. B., Ismagilova, G. N., Salimov, L. N., & Akhmadeev, M. G. (2015). PEST-Analysis and SWOT-Analysis as the most important tools to strengthen the competitive advantages of commercial enterprises. Mediterranean Journal of Social Sciences, 6(3), 705.

Trkman, P. (2010). The critical success factors of business process management. International journal of information management, 30(2), 125-134.

Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.

Wild, J., Wild, K. L., & Han, J. C. (2014). International business. Pearson Education Limited.

Worthington, I., & Britton, C. (2015). The business environment. Harlow [u.a]: Pearson. 

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