competitive environment and macroenvironment

Read the guide for your chosen company, paying attention to note factors that relate to the environmental factors as described in Chapter 3 of the text.
Using this document and your own experience and knowledge of the company, prepare a paper that describes an example of each of the ten competitive and macroenvironmental factors that form your chosen company’s overall business environment.

ANSWER

Herbalife Competitive and Macro-Environment

Herbalife Competitive and Macro-Environment

Herbalife offers science-based products which are categorized into weight management segment, targeted nutrition segment, sports, and fitness as well as personal care segments. Macro-environmental and competitive factors have a great influence on the overall profitability, strategy, and competitive advantage of an organization. Changes in the macro-environmental and competitive factors have a direct influence on Herbalife as well as other players in personal products. This paper will offer an overview of the competitive and macro-environmental factors that influence Herbalife Ltd.

Macro-environmental Factors

Economic Factors: Herbalife has seen an increase in revenue over the years but has been dramatically affected by economic forces in its geographic segments. Economic forces, such as interest rates and income taxes, have influenced the net income (Hoovers, 2020). Considerably, due to high-interest rates and income taxes, the cost of business operation and expenses affecting the increase in sales and revenues.

Legal Factors: The legal framework within several countries has affected the company’s operations. There are various regulations imposed to enforce guidelines on how to conduct businesses, which results in a burden for businesses. For instance, regulations in China have required that Herbalife Ltd conducts sales through retail stores and direct sales representatives within the selected regions (Hoovers, 2020). This has affected the company’s retail productivity and growth since they increase sales through distributor methods of operations.

Technological factors: Technological developments have impacted product offerings as well as cost structure in the personal products industry. Herbalife’s operations have been geared towards technology support for their distributors (Hoovers, 2020). Ideally, technology support has attracted and retained distributors due to efficient operations that increase sales.

Competitive Factors

Strong Brand Presence: Herbalife Ltd is a global brand with a strong presence worldwide. This has facilitated its competitive positioning based on increased market share and market leadership. Herbalife has a strong edge over its competitors in the consumer markets due to increased brand awareness.

New product development: Herbalife has focused on product development to keep up with the trends in the industry as well as meeting consumer demands. New product development offers new value to consumers. Therefore, the new ideas for product offerings are aimed at creating value for consumers to produce profitable returns.

Sound distribution system: Herbalife Ltd has focused on retaining and training independent distributors, which has increased its retailing productivity. Therefore, the company has been able to establish a sound distribution system which has offered the company a chance to sell their products more as compared to their competitors. The company developed distribution support infrastructures, which have led to sales growth.

Industry-Wide Strategy: Herbalife has adopted a broader geographic market, which has enabled sales of its product across many regions. Herbal sells its products in different geographic segments: Mexico, North America, Asia, Central America, Europe, Africa, the Middle East, and China (Hoovers, 2020). The company has operated in 400 locations in the world. This has created a competitive advantage due to the broader product-market boosting company sales.

Product Line offerings: Herbalife has vailed competitive advantage through differentiating their offerings from the competitors. They have a range of products that have been segmented to consumer wants. These include the nutrition segment, personal care segment, energy, and fitness as well as weight management segment.

Cost leadership: The cost leadership strategy has enabled Herbalife to gain a competitive advantage and increase sales in the consumer markets. Herbalife has been able to expand its market share by targeting the middle class, which constitutes the largest population in most regions. They have also focused on the easy accessibility and affordability of the product across the globe.

Promotion strategies: The company has been training distributors that the company relies on its promotion strategy. Herbalife works with distributors in promoting their products daily. The company has also engaged with consumers through nutrition clubs, fitness camps, and weight loss challenges. These promotion strategies have increased brand awareness and sales.

References

Hoovers. (2020). Herbalife Nutrition Ltd. Profile. Available at: file:///C:/Users/HP/Downloads/herbalife%20profile.pdf