Political – government laws imposes how any business run in the market, and any changes to the government laws would have a significant impact on the business. Changes in Taxation policy, Employment laws, and Environment protection laws would change the way how Wax Perfection makes its business decisions. For example, the increase in VAT to 20% has increased the price of the music records, which decreased the music sales.
Economical – economical state has massive impact on all businesses. The increase amount of unemployment, and decreased disposable income has forced people to save more and shop less. Customers are leaning towards better deals than brand that they are loyal to. Although this puts Wax Perfection in a disadvantage, they can also use this as an advantage by selling their products on deals, compared to their competitors, so that the can get more customers.
Social – UK’s population is dense in the age group of 15-64, 66% of the whole UK population. This is advantageous for Wax Perfection as their target audience are in the similar age group. Furthermore, social factors affect people’s perception, and behaviour towards a certain trend or a product. These days’ people spend a lot of their time on entertainment, such as music and entertainment. Wax Perfection can use this to market their products around this. Wax Perfection also has to understand the market and change its business environment to best suit its audience.
Technology – Technology has become a part of people in this day and age. All businesses should tailor their business tactics, marketing, and plans around technology in order to get good competitive advantage. Wax Perfection also has to consider online sales, as there is a significant increase in online sales compared to high street. Expanding the business into online market would give Wax Perfection a good competitive edge over their direct competitors, and also help them to compete against other online retailers.
Environmental – People are also aware of the environment and the damaged caused to it so Wax Perfection needs to make sure their business practices are environmental friendly. In addition, the government also has started pressuring business to be more “Green”, to reduce the pollution, and cut down waste. They constantly introduce new laws to keep the environment unpolluted. This would also attract customers who are environmental conscious. Wax Perfection should also have a good recycling methods as there are millions of discs and vinyl records burnt every year, releasing harmful toxins to the environment.
Legal – Illegal downloading and Piracy are important issues that have constrained the growth of legal digital channel and severely affected the sales of physical entertainment. There is mass distribution of illegal download product which undercuts the retail price that HMV and others are charging for their product. Until government measures and controls to reduce and eliminate copyright infringement are successful issues such as illegal downloading and piracy will continue. In 2010 the Digital Economy Act was made into law. It was introduced to regulate digital media in the UK, and to protect intellectual property and curb illegal file sharing. The passing of the Act into law was important for HMV, however its effect has been minimal as offenders of music and film piracy are rarely caught or face penalties.