Assignment A – Northern Rush

Date: Oct 2, 2015
To: Mr. Murray James and his partners
From: External Consulting Group
Subject: Macro and Micro Analysis of Northern Rush

Thank you for allowing us the opportunity to work with your company. As requested, we have evaluated the your business plan using PESTE and Porter’s five forces in order to give you a deeper understanding of the industry your company will be working in. We take a strategic and marketing view in this analysis and we will be following this up with a more accounting and finance focused analysis of your company. From our research, we would like to highlight the following conclusions:

1. The strategy of Northern Rush should be cost leadership. 2. There exists a substantial amount of competition in this industry. 3. Northern Rush has a unique advantage due to its marketing strategy and social benefits.

The remaining of this memo will make a complete analysis of PESTE and porter’s five forces, their effect on Northern Rush, and the key factors that will lead to Northern Rush’s success.

PESTE
There are no significant political or environmental issues that affect Northern Rush.

Economic: * The Canadian market for home furnishing has recovered more quickly than their US counterpart. * The recent reduction in oil prices has lowered delivery costs for firms. * The cost of borrowing is low if Northern Rush decides to seek external financing. * The home furnishing industry is largely considered to be a competitive industry where firms are price takers.

Social: * Canadians are extremely proud and supportive of local Canadian companies. * There is a great amount of support in the community to help university students with their start-ups.1 * It is easier to sell locally and to people you know. * Younger audiences are more likely to buy for