Internal And External Factors Of Companies Essay


Discuss about the Internal And External Factors Of Companies.


Company’s Overview

The company JB Hi-Fi was founded by Mr. John Barbuto (JB) in the year 1974, the company operates the trade from a single store in East Keilor, Victoria. the founder of the company follows the simple philosophy which says that the aim of the company is to offer the specialist variety of the Hi-Fi and recorded music at Australia’s lowest prices. JB stores provide the world’s leading brands of Computers, tablets, TVs, Cameras, Hi-Fi, speakers, Car Sound, Home theatre, portable audio and much more. Along with this the company also provide the largest range of games, recorded music, TV shows, DUD music + Blu-Ray at the lowest process so that the customer can buy the products from the stores or through online (JB Hi-Fi, 2017).

The company is known because of its cheapest price of the products, convenient location, a wide range of the products, best brands and the personal service from the experienced specialist staff. The sale of the products in the year 2016 was more than the past few years. For instance; total sales up 8.3% to 3.95 billion, comparable sales up 5.4%, EBIT up 10.1% to $221.0 million, Net profit after task up 11.5% to $ 152.2 million and earnings per share up 11.5% to 153.8 cps (JB Hi-Fi, 2017).

Environmental analysis

The environmental analysis is used to identify or to determine the internal and the external factors that can create an impact on the working of the company or can influence the organization while making the strategic decisions. The analysis is done to assess the level of threat and the opportunity that the company is having across the borders (Fernie, Fernie, and Moore, 2015).

JB Hi-Fi makes use of the PESTLE analysis as it works as an analytical tool that is used by the company while making the strategic business planning. It is a strategic framework used by the company for assessing the external factor influence in their business. PESTLE analysis includes political, economic, socio-cultural, technological, legal and environmental factors. All these factors can affect the working of the company but there is one of the factors that work as a huddle for the company that is a political factor (IEDU, 2017).

Impact of political factors on company

Political factors play a vital role in analyzing the factors that can create an impact on the JB Hi-Fi Limited. These factors consist of the changes in the legislative, policies and the laws formed by the government. The political factors impact the company while making the long-term profitability objective in a certain market (JB Hi-Fi, 2014). The company is currently operating the business of retailing in more than dozen countries and this shows that the company has been experiencing the different types of the political system risks. The company is facing the issues in many of the countries and then also the company is able to achieve the success in the retailing industry. The company analyzed the political factors in the retail industry before expanding the business (Fern Fort University, 2017).

It is suggested to the company to the analysis below given certain aspects while entering the market or country.

  • The company should find the country where they can find the political stability and the importance of the retailing sector in the country's economy.
  • The political factor involvement in business can create an impact on the working of the business and especially the retailing sector.
  • The JB Hi-Fi should consider the trade regulations and the traffic related to the retailing might affect the expansion of the business in the potential market (Fern Fort University, 2017).
  • The pricing strategies or the pricing regulatory mechanism for retailing can affect the revenue of the company so the company should cross check these factors before expanding the business.
  • Wage legislation such as minimum wage and overtime wages criteria of the market can affect the working of the company.
  • The safety regulations related to the retailing sector can affect the working of the JB Hi-Fi and this is the reason which makes the company to analysis this factor before doing an expansion.
  • The work regulation might vary from company to company in the retailing industry so the company analyses the work regulation of the market or the country before expanding the business (Root, 2017).

In Australia, there were some of the political issues which show the real-life experience faced by the company. For instance; the ATO (Australian Taxation Office) was reduced from 30% to 25% which might lead to a reduction in the prices of all the products provided by the company to its customers to attract the customers. This shows that the company took the step considering the political condition of the company and according to the political factor company brought the changes in the strategy to enhance the sales and revenue of the company.

CSR (Corporate social responsibility) and ethics

The CSR (Corporate social responsibility) is a form of the corporate self-regulation integration into a business model (Korschun, Bhattacharya, and Swain, 2014). CSR is the business approach that contributes to the sustainable development by delivering social, environmental and economic benefits to all the stakeholders of the company (Servaes, and Tamayo, 2013). Each and every company understand their responsibility towards the stakeholders and the society. Similarly, the JB Hi-Fi fulfills its responsibility towards the environment and the social responsibility. The manager of the company knows that they have to fulfill their responsibility towards the community and the stakeholders; if the company is able to fulfill their responsibility then the company can get the funds easily for the expansion which leads to the growth of the company (Tai, and Chuang, 2014). The company has launched the program so that they can fulfill their responsibility towards the community. The name of the program is helping hands, through which the company is motivating the employees to contribute and this make the youth realize that they are responsible for the welfare of their community (JB Hi-fi, 2017).

“Helping Hands”

JB Hi-Fi Company knows the vital importance of the social responsibility to employees, suppliers and the customers being the leading retailer in Australia and New Zealand. The company established a new program known as “Helping Hands” in the year 2008 through which the company can easily fulfill its social responsibility towards the community and the stakeholders. The directors, executives and the employees of the company directly donate the amount to the charitable organization. The company works with the ACF (Australian Charities Fund) in Australia, so that company can develop and maintain the program smoothly in Australia (Australian Charities Fund, 2017). The motive behind the formation of the program- Helping Hands allows the employees to donate to 9 charity partners through weekly basis deductions from the payroll.

In Australia: - The programs involve more than 4,700 employees which are approximately 68% of the employees of the company in Australia, each of the employees of the company making the contribution to the program weekly. There are many partners who are donating such as The Song Room, Bush heritage Australia, Medicins San Frontiers, Red Kite,, Australian Animal Welfare league, Fred Hollows Foundations and many others (JB Hi-Fi Solution, 2017).

In New Zealand: - The JB Hi-Fi came into the existence in the year May 2012, hence it includes 210 employees (Approximately 43% of New Zealand office employees). These employees do make the contribution every week for this program. Several New Zealand partners who support the program by contributing to the program consist of Shelter Box, Plunket, Forest and Bird and many others (JB Hi-Fi Limited, 2013).

Change for change

The change for change represents the donation boxes that are kept by the company across all its stores in New Zealand and Australia. To collect the amount from the customers, JB Hi-Fi though to keep the donation boxes in the store near the cash counter so that people can easily find it. The company collected approximately $50,000 amount from the Australia stores and in total last year company raised approximately $ 485,000. Last year the boxes were introduced in New Zealand as well and they collected approximately $ 25,000 (JB Hi-Fi Limited, 2013).

The company identifies the responsibility to give back to the society and community. JB believes workplace giving or donation is an effective and efficient way to perform the responsibility towards the society. The company has approximately 6,000 members of the company who contributes to the program on a weekly basis which is approximately 81% of our staff nationally. The company is proud that the company is getting the support from the Australian Charities Fund to achieve their goal of No. 1 Mdonors by 2020. To achieve the objective successfully the company matches staff contribution dollar-for-dollar as the company wants to double the positive impact on community and charities.

Organisation culture

The organizational culture is a system of shared assumptions, beliefs, and values that govern how the people behave in the organization. Every company wants to maintain a smooth organizational culture that helps the company in operating the business activity correctly (Babnik,, 2014). JB Hi-Fi wants to maintain the unique culture in their organization by promoting the donation. The thinking, opinion and the views of the company are totally different which make the organizational culture of JB Hi-Fi unique.The company follows positive organization culture along with this the company supports the innovative technology and creativity that shows the company’s culture. The company follows the smooth way for the communication, the managers of the company communicate with their employees and ask for the improvement in the plans formed by them to attract the customer and meet their expectations. The communication is the base of the organizational culture; this communication makes the employees feel respected and valued. This enhances the morale and motivates the employees of the company which leads to the growth in the productivity of the company. The productivity opens ways for the growth and opportunities of the company.

Apart from the company promote the activities related to the donation and also promote the employees to support them which show the other side of the culture of the JB Hi-Fi. The company is forming partners to achieve their responsibility and their mission towards the donation programs, this gives a glimpse of the culture of the organization.

Personal Insights Quiz


Serial Number

1-Strongly Disagree




5-Strongly agree

I like the thrill and excitement from taking risks.


I prefer managers who provide detailed and rational explanations for their decisions.


If a person’s job performance is inadequate, it’s irrelevant how much effort he or she made.


No person’s needs should be compromised in order for a department to achieve its goals.


I like being part of a team and having my performance assessed in terms of my contribution to the team.


I like to work where there isn’t a great deal of pressure and where people are essentially easy-going.


I like things to be stable and predictable.


Analysis and Interpretation

2 (2-10) + 3 (2-16) + 1 (2-12) + 2 (2-13) +5 (2-14) + 5 (2-15) + 3 (2-11) = 21

As it is clear the scores of the 2-11 and 2-16 have been switched and the total is 21 out of 35. The score of the 21 or lower shows that my preference for the organizational culture, according to the score the organization culture is more comfortable in a mechanistic, formal, rule-oriented and the structured culture. this preference of the score is mostly linked with the large organizations and the government agencies. Considering the survey, the lower the number of the survey shows the stronger preference for the type of the culture.


The company is leading in the retail sector and the company is achieving success and making a profit. Being an employee it is going to be a pleasure for working in the company who is leading, as this is the good opportunity to start the career. The organization can guide the employees for their future growth and for achieving their personal knowledge. JB Hi-Fi helps the employees in enhancing their knowledge related to the concepts along with the creativity and innovation.


The report shows the business activity that is followed by the selected business JB Hi-Fi. The company is leading in the retail industry in both the countries; New Zealand and Australia. This proves that the objective of the company is to achieve the growth and success. Further, there is a discussion about the external factors that can affect the working of the company. One of the factors is discussed in the report which is Political factors; this factor might affect the decisions of the company (Mordon Inttelligence, 2016). The organizational culture of the company is discussed in the report and according to the survey, the employee shows their preference for the organizational culture. The analysis and the interpretation of the survey are included in the report. The Quiz analysis is done which show the total score of 21 which is favorable and fulfills my preference.


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Fern Fort University, 2017, JB Hi-Fi Limited PESTEL & Environment Analysis, Retrieved 17th December 2017,

Fernie, J., Fernie, S. and Moore, C., 2015. Principles of retailing. Routledge.

IEDU, 2017, Internal and External Environment Factors that Influences Organizational Decision Making, Retrieved 15 December 2017,

JB Hi-Fi Limited, 2013, Annual report for the financial year ended 30 June 2013, Retrieved 17th December 2017,

JB Hi-Fi Solution, 2017, JB Hi-Fi Helping Hands, Retrieved 17th December 2017,

JB Hi-Fi, 2014, “Empowering culture that has a positive outlook on the challenges presented by the current economic conditions", Retrieved 17th December 2017,

JB Hi-Fi, 2016, JB Hi-Fi Full Year 2016 Results, Retrieved 17th December 2017,

JB Hi-Fi, 2017, About us, Retrieved 17th December 2017,

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