Will House of Fraser’s New Ownership Be Able to Overturn the Failing Company?

Introduction

House of Fraser was first founded in 1849 and has grown to be a major high street retail brand with 59 stores across UK & Ireland with over 16,000 employees [H,2018]. However, in august 2018 the company entered administration with debts close to £1 billion. Mike Ashley the owner of the Sports Direct plc acquired House of Fraser on the 10 August 2018 for £90million; the Plc owns shares in a number of other high street brands such as Debenhams and Flannels.

The downturn in House of Frasers financial situation will likely be due to a mix of factors; ranging from market changes due to increase of e-commerce by consumers as it is more accessible as the consumer can purchase their goods without physically going into a store; to an increase in the competitive nature of the retail market as consumers may be swayed to go to a competitor’s store.

Question:

• What extent did internal and external factors play with House of Fraser Bankruptcy?

Objectives:

My objectives within my proposed report would be to use economic theories and models such as Porters Five forces, Prestcom and PESTLE to help the competitiveness of the environment. Also to identify whether House of Frasers will be able to re-coop and overcome their downfalls through new management. 

Literature:

When the researcher uses academic sources it will allow them to gain a better context and grasp of the market factors along with being able to use any business data such as analytical data in a more effective manor within the report.

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The BBC article [bbc,2018] highlights a number of factors which could of lead to House of Frasers downfall. One of the reasons the article outlined was the increase level of consumers purchases their items online along with having no unique selling point compared to other similar high street stores. The following research will focus mainly on competition and consumer buying behaviour.

Consumer buying behaviour is the total sum of consumer preferences, attitudes, intentions and decision regarding any purchases within a market. I will use this to help analyse whether there is a downturn in people purchasing from within a store and how it has affected house of Fraser’s retail business.

Porters 5 forces involve 5 business environment factors. The factors that will be particularly useful will be competition rivalry and threat of substation. The combination of the two factors will help the researcher to identify how the competition within the market might have caused the downturn in House of Fraser’s business along with seeking out whether the external factors played a major role within the failure of house of Fraser and the ultimately leading to their bankruptcy.

Methodology:

The following research will consist of both qualitative and quantitative data. Qualitative research is opinionated research which is used to gain an insight into opinions and underlying explanations. It helps build a picture of the issues and problems. This research comes with more detail. (Snapsurvey,2018). Quantitative research is using statistics and numerical data which can then be used to form statistics and graphs. It uses data which can be measured to help formulate facts rather than opinion and highlights patterns within the research. This type of research is more planned than qualitative. (Snapsurvey,2018)

The qualitative research will be gained through the use of questionnaires in order for the researcher to address the competitive market. In order to conduct this questionnaire, the required sample size will need to be large enough to gain accurate data reading along with trying to achieve a non-biased result. This will be achieved by using a sample size of 30 individuals 15 male and 15 females all over the age of 18. The questionnaire will also consist of 5 questions directed at the specifics of the research on the competitive market and how consumers choose to purchase their goods. One question example would be “have you ever purchased any items from House of Fraser”. The research would be conducted in person where by a individual will answer the question on a paper copy and all the results would be collected at the end by the researcher. The data received along with the individuals partaking in the sample will be kept by the researcher to keep privacy and confidentiality of the research and participants. Also company feedback such as customer reviews will help the researcher analyse whether or not the company itself had a role in its own demise.

Quantitative data can be gained through part of the questionnaire along with finding analytical data on the financial report for House of Fraser along with the data on the market and how the retail market as a whole has been operating. Factors such as increase in more e-commerce shopping vs high street purchases may be a key factor in which the researcher could use within their report.

References

• DeFranzo, [S. (2018). Difference between qualitative and quantitative research.. [online] Snap Surveys Blog. Available at: https://www.snapsurveys.com/blog/qualitative-vs-quantitative-research/ [Accessed 12 Dec. 2018].
• BBC News. (2018). House of Fraser: Five things that went wrong. [online] Available at: https://www.bbc.co.uk/news/business-45127423 [Accessed 13 Dec. 2018].
• House of Fraser. (2018). About Us & Our History - House of Fraser. [online] Available at: https://www.houseoffraser.co.uk/company-information/our-history [Accessed 12 Dec. 2018].