1.of external environment for Lily’s Kitchen

It is important for the marketers to focus on the external factors that can affect the business operations in making a business plan (Kotler, 2008). The external environmental factors cannot be controlled by companies but they can make strategies to overcome their impacts. In order to innovate the pet-treat segment of Lily’s Kitchen, it is important to understand the environment in which it is working. For this purpose, two marketing frameworks are used named PEST analysis and Porter’s 5 forces model. These are discussed as under:

1.2.PEST analysis for Lily’s Kitchen

According to Armstrong et al., (2014), PEST analysis is considered to be an important framework for scanning the external business environment and it mainly focuses on six factors. These factors include political, economic, social, technological as well as legal along with environmental. These are discussed as under:

1.2.1.Political

There are different factors that influence the working of Lily’s Kitchen. These factors include tax rates, government stability, trade policies as well as rules and regulations. There is political stability present in UK, flexible policies are made by the government for business operations and business loans are also offered for startup and expansions (Jain, 2009). This indicates that the polictial environemt in UK is favorable and Lily’s Kitchen can expand its pet-treat segment.

1.2.2.Economic

The economic factors include interest rate, economic stability, inflation rate as well as purchasing power. In UK, inflation rate is low and people have huge purchasing power due to high rate of employment (De Chernatony, 2010). This indicates that the customers will be able to buy the innovate pet-treat segment of Lily’s Kitchen.

1.2.3.Social

Due to changes in the life structures and life styles, attention of people in UK is diverting towards pets, especially cats and dogs (Murray et al., 2010). This is the positive sign for Lily’s Kitchen and it can expand its pet-treat segment because customers would love to buy new food for their cats and dogs.

1.2.4.Technological

In past few decades, huge technological advancements and developments are observed in UK. Improved technology can be used as an opportunity by Lily’s Kitchen because it can use new and advanced technology for making green products for customers’ pets. With the help of advanced technology, Lily’s Kitchen can provide healthier pet-treat segment.

1.3.Porters five forces model

According to Hanson and Kalyanam (2010), Porter’s five forces model is important to understand the business strengths against its competitors. This analysis is used to understand the strengths of Lily’s Kitchen, as under:

1.3.1.Suppliers’ power

In case of Lily’s Kitchen, the suppliers power is high because they help it to produce unique pet-food products. Switching from one supplier to another will incur huge cost for Lily’s Kitchen. That is why, Lily’s Kitchen should focus on current suppliers for demanding new material to expand pet-treat segment.

1.3.2.Buyers’ power

There are different pet-food brands, other than Lily’s Kitchen. That is why, customers can easily switch to other brands for purchasing pet-treats (Murray et al., 2010). This can be a weakness or threat for Lily’s Kitchen. That is why, it is suggested to keep the prices of innovated pet-treat segment low. In this way, customers’ switching towards other brands will be low.

1.3.3.Competitive rivalry

Lily’s Kitchen is operating in highly competitive business environment. Pet-food business is increasing in UK and becoming famous including Dog Food Company, Monster Pet Supplies as well as Husse UK (Smith and Whitfield, 2012). These are great threat for Lily’s Kitchen. Lily’s Kitchen is focusing on different type of effective strategies including humanisation as well as organic labeling that makes it unique from competitors.

1.3.4.Threat of substitution

In case of Lily’s Kitchen, threat of substitution is high because of major competitors in the market. Customers can easily switch brand for pet-treats if they are given discounts or other promotions. This is a great threat for Lily’s Kitchen and management should provide innovative products at lower prices to remain competitive in the market.

1.3.5.Threat of new entrant

In case of pet food business, threat of new entrant is high because different small and medium sized companies can provide pet-threats to customers by using low funds (Dawes et al., 2015). Feelwells and Margot have recently entered the market and attracting customers towards their products. This threat can be managed by Lily’s Kitchen by making it products more innovative and cheap.

References

Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. London: Pearson Australia.

De Chernatony, L., 2010. Creating powerful brands. London:  Routledge.

Dawes, J., Meyer-Waarden, L. and Driesener, C., 2015. Has brand loyalty declined? A longitudinal analysis of repeat purchase behavior in the UK and the USA. Journal of Business Research, 68(2), pp.425-432.

Hanson, W. and Kalyanam, K., 2007. Principles of internet marketing. London: South-Western College Publishing.

Jain, A., 2009. Principles of marketing. London: VK PUBLICATIONS.

Kotler, P., 2008. Principles of marketing. New Delhi: Pearson Education India.

Murray, J.K., Browne, W.J., Roberts, M.A., Whitmarsh, A. and Gruffydd-Jones, T.J., 2010. Number and ownership profiles of cats and dogs in the UK. The Veterinary Record, 166(6), p.163.

Smith, A. and Whitfield, Y., 2012. Household pets and zoonoses. London: National Collaborating Centre for Environmental Health.