Environmental and SWOT Analyses of Hillier Nurseries Limited

Seminar Paper, 2011

16 Pages



1 Introduction

2 External environmental analysis
2.1 Industry Profile Analysis
2.2 PEST Analysis
2.2.1 Political factors
2.2.2 Economic factors
2.2.3 Social factors
2.2.4 Technological factors
2.3 Competitive Industry Environment Analysis
2.3.1 Hillier Nurseries Competitors

3 Internal Environmental Analysis

4 SWOT analysis

5 Strategy Development

6 Strategy Implementation
6.1 Investment requirements
6.2 Appropriate Resources for Successful Strategy Implementation
6.3 Critical Success Factors

7 Expected Response from Stakeholders and Shareholders

8 Summary and Conclusions


1 Introduction

Hillier Nurseries Limited is an arboretum and retailing company with the long history of horticulture experience. The company was established in 1864 by Edward Hillier and became one of the largest plant growers and retailers in Europe (Hillier Nurseries Website, 2009). Hillier Nurseries Ltd provides plants and trees to the customers all over the United Kingdom and to various European countries. The customers of the company include various groups of bulk buyers such as garden designers, landscape contractors, developers and other. For these customers the company provides its wholesale services. The company offers an essential range of plants and related services: “The widest range of species is grown in sizes ranging from 8-10cm girth up to super semi-mature trees of 80cm girth. A choice range of multi-stemmed plants, specimen shrubs and ‘instant’ hedging is also available” (Hillier Nurseries Website, 2009). As for the retailing, there is a network of retailing centers called Hillier Garden Centers which provides its services to the retail and private customers: Hillier Garden Centers include thirteen retailing centers in the UK. There are three divisions in Hillier Nurseries: Hillier Wholesale Nursery, Hillier Amenity Nursery and Hillier Garden Centers. The press release of the company states that Hillier Wholesale Nursery "supplies a network of UK stockists, producing around 2 million container-grown hardy plants, shrubs and herbaceous perennials per year" (Anderson, 2007). The greatest tree nursery in the United Kingdom is Hillier Amenity Nursery which provides trees in containers and semi-mature trees for different purposes. Such wide scope of services provided by the company contributes to the competitive advantage which makes Hillier Nurseries such a stable entity aiming long-term performance. Particular attention is paid by the 460 company employees to the quality and assortment of plants, enhancement of customer services and the advising to clients.

The present paper analyzes various factors influencing the company performance. Both the internal and external analysis of the environment within which the company operated is provided. The strategies aimed at the improvement of the retailing activity are also discussed.

2 External environmental analysis

2.1 Industry Profile Analysis

The horticultural retailing market can be described in general in four sectors which usually are distinguished in this market (Keynote Publications, 2008):

- assets, furniture, buildings;
- garden equipment;
- garden care tools and related products;
- growing stock.

The latter is one of the most important and required in this market, as far as the sales volumes for these items were among the largest in 2007. This resulted from the demand for DIY or do (grow)-it-yourself products. The weather influenced essentially the results of the sales. While growing stock was in demand as ever, the garden furniture and other assets had the least demand because of the consequences of the financial crisis and wet weather in summer and early autumn (Keynote Publications, 2008).

DIY & Gardening expenditure and growth rates

( Source: http://www.verdict.co.uk/Marketing/dmvt0422m.pdf )

illustration not visible in this excerpt

While these were mostly the environmental factors which influenced the setting within which Hillier Nurseries operate, there are other factors of great importance. The following techniques are likely to help in analyzing these factors: PEST analysis, SWOT analysis, strategy implementation analysis and other.

2.2 PEST Analysis

PEST Analysis provides the framework aimed at the analysis of the external factors influencing the company development. Political, economic, social and technological factors are in the center of this analysis.

2.2.1 Political factors

Political factors include the tax policies, employment laws, political stability and environmental regulations which may have an impact on the horticultural market.

Legislation related to the retailing market renews often, and this may have essential impact on the performance of the company. The following legislation are the most important which influence the horticulture retailing market: landfill tax, climate change levy, and packaging waste regulations (Envirowise, 2009). They all are related to the environmental protection. Thus, the landfill tax implies that the company has to pay taxes on the wastes sent to the landfill. This tax aims the reduction of the waste disposal and more careful attitude to the environment in everyday actions. Hillier considers the environmental concern to be among the greatest priorities of its performance. To start with, it is the growing stock which is likely to level the influence of the human activities on the nature, and secondly, it is the positioning of the environmental protection through the recycling and less landfills use as the part of the mission of the company (Envirowise, 2009).

The regulation concerning the packaging waste is not directly applicable to the small and medium-sized companies like Hillier Nurseries, but still this issue should be addressed at the internal meeting, because it seems to be only the matter of time. The developing environmental legislation is likely to get each minor aspect of the environmental issue under the governmental control. This concerns even such environmentally friendly sphere as horticulture.

The Climate Change Tax is an initiative which aims the improper energy use reduction. This tax is automatically included into the company’s bills (Envirowise, 2009). As a rule, it amounts to about ten per cent of the total bill for energy. Hillier Nurseries understands the motives of this tax imposing and reduces the energy used by its facilities to the extent possible. This contributes to the aim of the United Kingdom of decreasing "the amount of carbon dioxide produced to 20% of the 1990 levels by 1990" (Envirowise, 2009). Consequently, the above-mentioned taxes are imposed on the companies in order to increase their environmental consciousness and prevent the excessive gas emissions.

Legislation related directly to the garden centers The Office of Public Sector Information provides the amendments to the Sunday Trading Act 1994 which state that garden centers can extend their working hours on weekends and holidays, particularly on Easter. These amendments were aimed at the improvement of trade of the garden centers, as far as the latter made essential sales exactly on Sundays. Therefore, these amendments positively influenced not only the centers themselves but also the local economies. Besides, this contributed to the national economy as well.

2.2.2 Economic factors

Economic factors include the economic stability which is expressed in the inflation rate, interest and exchange rates etc. As far as economic factors indicate the purchasing capacities of the potential customers, the family income rates can also be considered.

World financial crisis resulted in the recession tendencies in all spheres of economic activities. The retailing markets are among the most vulnerable. Taking into account that growing stock is not among the vitally important products, it can be assumed that the horticultural retailing market was affected more by the crisis if compared with the grocery products, for instance.

Increased interest rates negatively influenced the retailing markets, and the horticultural market is not an exception. Rising prices for energy may be considered as negative influences contributing to the recession in the market. Thus, Hillier Nurseries has a number of negative factors which challenge the positive performance of the company. Despite all the above-mentioned factors, there is still a dominating though among retailers that the weather is the most influential factor (Keynote Publications, 2008). It is weather that predetermines the prices and makes the year either profitable or failing. Though this fact cannot be disproved, it is still not the only. Thus, other factors related to the political and economic spheres should be discussed within this frame of reference.

2.2.3 Social factors

Social factors concentrate on the demographic issues which include the population in the region, its purchasing capabilities and preferences, population age, lifestyle and other. They also outline the target markets, needs of the clients and the size of the market. Euromonitor claims that the end of 2008 was marked with the recession (Euromonitor, 2008). Spending of the customers in the retailing markets were reduced correspondingly. In general, the retailing markets underwent essential pressure and challenges in 2008, which made 2009 more beneficial in terms of customers’ purchasing power. The environmental concerns were also brought to the foreground in 2008, and 2009 continued this tendency. In this light, Hillier Nurseries services and products became more demanded in the market due to the specificity of the company products. The positive influence of the Sustainable Communities Act (Euromonitor, 2008) cannot be underestimated. This act contributed to the environmental concerns and brought both advantages and disadvantages to Hillier Nurseries. It is likely that the demand for Hillier products will be greater against such background, but at the same time, the increased environmental concern increases legislative pressure upon the actions of the company.


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Environmental and SWOT Analyses of Hillier Nurseries Limited
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Philipp Dunkerbeck (Author), 2011, Environmental and SWOT Analyses of Hillier Nurseries Limited, Munich, GRIN Verlag, https://www.grin.com/document/176508


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