TFG Limited SWOT & PESTLE ANALYSIS

Strength

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Weakness

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Opportunity

1. Expand online sales through strategic investments in e-commerce infrastructure, CX & digital marketing: With the growing importance of e-commerce, the company recognizes the need to enhance our online presence and capabilities. It has launched TFG labs with 159 engineers, product managers, data scientists, logistics and operations specialists and digital marketers. It is investing in robust e-commerce infrastructure, including website development and optimization, to provide customers with a seamless and user-friendly online shopping experience. By focusing on CX, it aims to exceed customer expectations and create positive interactions at every touchpoint. This involves streamlining the browsing and checkout processes, offering personalized recommendations, and providing responsive customer support. To effectively reach and engage our target audience, it is investing in digital marketing. This includes various strategies such as search engine optimization (SEO), social media marketing, and targeted advertising campaigns to drive traffic to its online platforms and increase conversion rates. These efforts align with its commitment to evolving as a leading digital retailer and meeting the changing preferences of the customers.

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Threat

1. Revenue declines (16%) & supply chain disruptions due to economic downturns like COVID-19 pandemic: The COVID-19 pandemic had a significant impact on the business revenue, leading to a decline of 16% in FY 2020. The economic downturn caused store closures, which affected its performance, particularly in the first half of the year. While TFG Africa did not experience direct store closures, TFG London lost 5% of available trading hours, and TFG Australia lost 15% of available trading hours due to COVID-19-related restrictions. Furthermore, the pandemic has led to increased logistics costs, and the bypassing of ports has resulted in delays in receiving products. COVID-19-related shutdowns in China as well as the war in Russia & Ukraine, have further worsened supply chain issues. These disruptions in the supply chain have hindered its ability to procure and deliver products efficiently. The company is implementing strategies to adapt to changing market conditions, improve logistics processes, and mitigate supply chain disruptions. By doing so, it aims to strengthen its operations and overcome the economic downturn caused by the pandemic.

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Political

1. Civil unrest in KwaZulu-Natal & Gauteng impacted business: During the civil unrest that took place in July 2021 in the KwaZulu-Natal and Gauteng provinces of South Africa, 198 stores belonging to the Group were looted and damaged to varying degrees. By the end of May 2022, the Group had managed to reopen 176 of these stores, while the remaining stores were slated to reopen from June 2022 onwards, except for two stores that would not be reopened. In addition to the store damage, a distribution center operated by one of the Group's logistics service providers and the manufacturing premises of a local supplier were also damaged by fire during the unrest. Although the impacts on the supply chain were not deemed material, the Group continues to assess the damage to its stores and is quantifying the losses for recovery through its insurance policies. SASRIA, a state-owned insurance company, has provided assurances regarding its financial capability to honor claims. However, delays in claim processing are expected due to the widespread impact on businesses and industries.

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Economic

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Social

1. Labor shortages in Australian retail increased pressure on related industries like transport & logistics: The Australian retail sector is experiencing a shortage of skilled workers, particularly in areas such as customer service, warehousing, and delivery services. The combined impact of labor shortages in the industry and the subsequent strain on transport and logistics industries has resulted in challenges such as delayed deliveries, increased operating costs, and potential disruptions to supply chains. This situation has necessitated innovative solutions and strategies to overcome the workforce management challenges faced by the Australian retail industry. Efforts are being made to address these labor shortages and workforce management challenges, including initiatives such as recruitment campaigns, training programs, and adopting technology-driven solutions to enhance efficiency in operations. These measures aim to alleviate the pressure on related industries like transport and logistics, ensuring the smooth functioning of the retail supply chain and maintaining customer satisfaction.

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Technological

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Legal

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Environmental

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