STEEP+Analysis

=STEEP Analysis= This section highlights the environment factors surrounding Hermes by underpinning them for comprehensive research. The purpose is to analyze these factors for justification on the impact towards Hermes by a positive, negative or neutral effect.

Gross Domestic Product (GDP)
According to National Statistics Online (2009), UK’s GDP has contracted by 1.9% and currently stands at 4.1% (Figure 1).//This will affect Hermes because trading is reduced with imports and export dropping 6.1% and 5.9% respectively thus posing a threat. //

Inflation Rate
According to National Statistics Online (2009), CPI index drop from 2.9% to 2.3% with the RPI index also declined -1.2%, dropping from -0.4% (Figure 2). //This means spending will be reduced however, fuel and lubricant registers an upward pressure. Thus, what seems to be a positive impact turns out the opposite for Hermes .//

Unemployment Rates
According to National Statistics Online (2009), unemployment rates up 0.8% to 7.1% (Figure 3). Job vacancies also decreased to 455,000, down 51,000 and register the lowest figure since year 2001. Europe’s unemployment rate also increased 12.650 million to 13.747 million (Figure 4). //This impact will mostly be neutral because even with unemployment rates increasing, companies will still require documents shipping. //

Petrol Prices
According to Cambridge News Online (2009), petrol prices rose 4.0 pence per litter to 97.5 pence average. Further research shows that each region sells at different prices for example, prices in Peterborough (94.9 pence per litter) while Sawtry (103 pence per litter). //Therefore, this is a neutral impact because some branches will benefit while some will lose out. //

Interest Rates
According to National Statistics Online (2009), UK’s bank interest rate declined to a stunning 0.5% (March 2009), registering the lowest in history (Figure 5). //Hence, an opportunity arises for Hermes to set in motion any strategic investment plans because loan repayment is reduced significantly. //

Population
According to National Statistics Online (2009), UK’s population is projected to increase to 4.4 million by 2016 at 0.7% average annual rate (Figure 6). Experts also predict that immigrants will exceed emigrants by year 2031. //Although still far in the future, this allows Hermes to reconsider restructuring their business model to target individual customers also because this market will be expended. //

Working Hours
According to National Statistics Online (2009), total hours worked per week decreased 13.1 million reaching 921.0 million. Average weekly hours worked also reduced 0.3 to 31.6 (Figure 7). //This poses a negative impact towards Hermes because companies operate shorter periods, which may reduce the chances of document sending. //

Income
According to National Statistics Online (2009), median gross weekly earnings up 4.6 per cent from £458 to £479 for full-time employee jobs on adult rates whose earnings were not affected by absence (Figure 8). Besides that, this also varies from region where London registers the highest at £613 (28% > national median). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Therefore, Hermes may want to reconsider tapping into the individual market to obtain greater market share in the industry. //

Language
<span style="font-family: 'Times New Roman',Times,serif;">According to Barrow (2009), most UK citizens speak English but in Wales and Scotland, Welsh (25%) and Gaelic are preferred. In relation, different regions have different accents //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">thus a language barrier arises (negative impact) towards Hermes, which operates throughout UK. //

Internet Connectivity
<span style="font-family: 'Times New Roman',Times,serif;">According to National Statistics Online (2009), broadband connections rose to 95.1%, up from 94.1% while dial-up drop to 4.9%, down from 5.9% (Figure 9). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">This indicates a positive trend however is a neutral impact towards Hermes because currently Hermes does not rely on it .//

E-Commerce
<span style="font-family: 'Times New Roman',Times,serif;">According to National Statistics Online (2009), value of online sales rose to new heights registering at £163bn, an increase of 30.2% of £125.2bn (Figure 10). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">This is a positive indication that UK citizens are willing to purchase online. Consequently, Hermes may want to capitalize on this trend by implementing e-commerce as well for greater business opportunity in the furure. //

RFID Usage
<span style="font-family: 'Times New Roman',Times,serif;">According to IDTechEx (2007), UK registers 2nd highest of RFID usage in year 2007 and logistics industry settled at 5th overall. Besides that, RFID market will be $5.56 billion in 2009 (Figure 11) according to IDTechEx (2009). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">This represents a positive trend of RFID usage since RFID is the in-thing and is suitable in logistics thus Hermes may need to consider implementing it. //

Cyber Crime
<span style="font-family: 'Times New Roman',Times,serif;">According to CyberSource (2009), 51% of UK citizens never shopped online and 41% (within 51%) concerns about the security issue like theft of customer data, which registers the highest threat by UK companies (Figure 12). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Hence, a threat surrounds Hermes in decision to conduct e-commerce because huge investments have been fork-out and consumers are skeptical to use it resulting in a loss. //

Scrappage Scheme
<span style="font-family: 'Times New Roman',Times,serif;">According to politics.co.uk staff (2009), the UK government’s April budget introduces a scheme enabling consumers trading their vehicles (> 10 years) for £2,000 discount when purchasing new ones. //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">This grants Hermes an opportunity to purchase new vehicles, which requires less maintenance for more timely delivery eventually leading to better customer satisfaction (picking up shipments). //

Tax
<span style="font-family: 'Times New Roman',Times,serif;">According to HM Treasury (2009), beginning April 2009, employees income of over £150,000 will be taxed additional 50% more. //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">This may not affect Hermes presently because revenue is mainly from companies unless they decide to change their business model thus presently is a neutral impact. //

Cutting Future Spending Plans in Budget
<span style="font-family: 'Times New Roman',Times,serif;">According to BBC News UK (2009), fuel duty will increase by 2% per liter (September 2009) and 1 penny per litter subsequently each April from 2010 to 2013. HM Treasury (2009) also indicated that allocation of only £23 billion is provided for the transport industry (Figure 13). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">This poses a negative impact towards Hermes because government’s allocation may not be sufficient to assist in various aspects. //

<span style="font-family: 'Times New Roman',Times,serif;">
<span style="font-family: 'Times New Roman',Times,serif;">According to HM Treasury (2009), budget 2009 involves a 40% increased in capital allowance for new investments. //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Therefore, this provides a positive impact for Hermes to reduce financial stress for any new projects or investment plans. ////Therefore, this provides a positive impact for Hermes to reduce financial stress for any new projects or investment plans.//

RFID Tags
<span style="font-family: 'Times New Roman',Times,serif;">According to IDTechEx (2009), RFID tags have benefited many industries in reducing vehicle emission and energy usage. Nevertheless, it also has its cons particularly in some recycling processes. //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Thus, a neutral impact falls upon Hermes due to contra of pros and cons. //

Carbon Dioxide (CO2) Emission
<span style="font-family: 'Times New Roman',Times,serif;">According to Defra (2009), CO2 emission declined 1.5% from 552.850 million tonnes to 544.336 million tonnes. However, the transport sector is the only industry showing growth of 1% to reach 122 million tonnes (Figure 14). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Consequently, a negative impact surrounds Hermes, as government will enforce stricter rulings and regulations to protect Mother Nature. //

Rainfall
<span style="font-family: 'Times New Roman',Times,serif;">According to metoffice.gov.uk (2009), rainfall is highly expected during summer (July-August), winter (December-March) based on 1997-2000 anomaly and this trend is likely to follow in 2009 (Figure 15). //<span style="background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Therefore, a negative impact arises because this is the most active seasons for sending documents. If rainfalls are high, a likelihood of flight delay is also high. //

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Conclusion
· Inflation Rate || · Unemployment Rate · Petrol Price || · Income || · Working Hours · Language ||  || · RFID Usage || · Cyber Crime || · Internet Connectivity || · Budget 2009 || · Cutting Future Spending Plans In Budget || · Tax || · Rainfall || · RFID Tags ||
 * || **Positive** || **Negative** || **Neutral** ||
 * **Economical** || · Interest Rates || · GDP
 * **Social** || · Population
 * **Technological** || · E-Commerce
 * **Political** || · Scrappage Scheme
 * **Environmental** ||  || · Carbon Dioxide Emission

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