Sample Dissertation on Business Environment

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ENVIRONMENT

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TABLE OF CONTENTSINTRODUCTION.................................................................................................................... 1TASK 1.....................................................................................................................................1AC 1.1 Organisational purpose of business..........................................................11.2 Objectives of different stakeholders in Iceland Supermarket................21.3 Responsibilities and organizational strategies to meet thestakeholder objectives................................................................................................. 3

TASK 2.....................................................................................................................................42.1 Different economic systems attempts to allocate resourceseffectively..........................................................................................................................42.2 Assess the impact of fiscal and monetary policy on IcelandSupermarket and their activities..............................................................................42.3 Evaluation of impact of competition policy and other regulatorymechanism on activities of Iceland Supermarket ...........................................5

Task 3...................................................................................................................................... 63.1 Explaining How market structure determine the pricing and outputdecisions of businesses................................................................................................63.2 The way in which market forces shape Iceland Supermarketresponses.......................................................................................................................... 73.3 The business and cultural environments shape the behaviour ofbusiness.............................................................................................................................7

TASK 4.....................................................................................................................................84.1 Significance of international trade to Iceland Supermarket ................. 84.2 The impact of global factors on an organization........................................94.3 Evaluate the impact of policies of the European Union on IcelandSupermarket..................................................................................................................10

Conclusion ..........................................................................................................................11REFERENCES.......................................................................................................................12




INTRODUCTIONBusiness environment comprises all the internal as well as external

factors that affect the organization operations in both the direction.Internal factors prevails inside the business corporation hence, it can becontrolled by the business. However, external factors comprise all themarket factors that cannot be controlled by the organization (Hamiltonand Webster, 2015). Iceland Supermarket is a subsidiary company ofAssociated British Foods shortened to ABF. The company was founded inthe year 1969 in Ireland trading as Penny's headquartered in Deeside,Wales, UK. In the year 2000, there were 100 Iceland Supermarket storesacross Britain and Ireland. By year 2012, total 238 Supermarket branchesare operating across UK, Ireland and Europe.

Present project report will helps to understand the businessenvironment of the Supermarket in which the business is operating. Thereport will helps to determine the organizational purpose of business.Moreover, the report will discuss the stakeholders of the business withtheir interest and how they are satisfying. On contrary, the types ofeconomic system and the impact of fiscal and monetary policies and otherregulatory mechanism will be discussed in the report. Furthermore, thereport will determine the role of market structure in pricing and outputdecisions. At last, Importance of international trade with the impact ofglobal factors on Iceland Supermarket will be analysed.




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TASK 1

AC 1.1 Organisational purpose of business

Iceland Supermarket: It is a UK retail supermarket chain,established in the year 1969. It sales frozen and non frozen grocery itemsin the market. Frozen goods comprise prepared meals and vegetableproducts while non frozen items involves meat, dairy and other kind of dryproducts in UK food market. The organization mainly aims at providingbest quality of products to the customers so as to enhance their returns(Cetindamar, 2015). The organization is regularly satisfying the customerdemands that help to achieve greater the returns for the business.

KFC: Kentucky Fried Chicken (KFC) is the world second fast foodrestaurant chain after McDonald, headquartered in Gardiner LaneLouisville, Kentucky in the United States. The restaurant chain providesspecialised fried chicken products to large number of customers. Theorganizational objectives is to enhance the market share, increase theirprofit margins and provide greater the return on investment. Achievingthe business objectives helps to ensure organizational growth of thebusiness.

Transport for London: TFL is a local government body that isresponsible for providing transport services to the customers.Headquarter of TFL is established in Windsor House, Victoria Street,Westminister, UK. The primary objectives of the organization are to investbillions of amounts in capital transport network. It aims at providing bestquality of transport services to the consumers (Walraven, Laenen andD'haeseleer, 2015). Therefore, organization is making transport strategyand manages the transport system effectively.




Cancer Research: It is the world's largest charitable organizationthat has been established in the year 2002 in UK. It was establishedthrough merging two organizations that are Cancer Research Campaignand the Imperial Cancer Research fund. The purpose of the organizationto aware the citizens about the cancer disease in order to reduce thenumber of deaths caused by cancer.

1.2 Objectives of different stakeholders in Iceland Supermarket

There are number of internal and external stakeholders existed inthe Iceland Supermarket. Their objectives are describing here as under:

Customers: The customers are the source of generating incomeand profit for the business. Therefore they utilize the products andservices offered by Iceland Supermarket. Iceland Supermarket is fulfillingtheir objectives through providing various kinds of qualitative productsand services at affordable prices (Baldwin and Scott, 2013).

Employees: workers are engaging in providing products andservices to the users. Therefore, they are the internal stakeholder of thecompany. In Iceland Supermarket, their objectives are satisfying throughproviding better monetary terms, better working environment andworking culture.

Suppliers: They provide credit to the business therefore as anexternal stakeholder; they have the objectives to ensure security of theircredit (Chiang and Chen, 2015). Increased profitability and goodcreditworthiness of Iceland Supermarket helps to satisfying the supplier’sobjectives to a great extent.

Managers: Running the business operations successfully is theprimary responsibility of managers. As an internal stakeholder, they havethe objectives to maximize their remuneration, better pay scale andrecognise their position in the organization.




Government: Government generate tax incomes on the businessprofits having objectives of getting larger and regular the tax incomesensure legal business practices, business development and creating jobs.Iceland Supermarket is satisfying the government objectives by payingregular the tax charges and employing number of people in theorganization helps to reduce unemployment rates (Kumar andSiddharthan, 2013).

Lenders: Organization can borrow funds from the lenders at animplied cost. Their objectives can be satisfying by making regularpayment of interest and having good solvency position. Better availabilityof profits, good corporate image and better financial position satisfyingthe lenders objectives to a great extent.

1.3 Responsibilities and organizational strategies to meet the stakeholderobjectives

Iceland Supermarket business has certain kind of responsibilitiestowards the stakeholders. The business is satisfying their stakeholders’objectives by implementing different strategies that are explained here:

Customers: Iceland Supermarket has the responsibility to providelarge variety of products and services to the customers. Moreover,organization is meeting their objectives by making product improvementand giving additional benefits to them (Codro and et. al., 2014). Theycreate value for the products and the services and providing a convenientway to purchase variety of products at single place.

Employees: Iceland Supermarket making strategies to providebetter salaries to the workers and maintain good working environment.The organization decides better pay rates and provides job security tothem. Further, employees are satisfying by achieving good public image.Their performance are appreciated and rewarded on a regular basis tomotivate them.




Suppliers: Iceland satisfying their responsibility towards thesuppliers by getting increased revenue, improving relationship and higherthe profit availability (McChesney, Reksulak and Shughart, 2015). This inturn, suppliers will be highly satisfied because of their credit security.Iceland is responsible to make timely payment to the suppliers. Theorganization is managing adequate liquidity in the business for thatpurpose.

Government: All the business organization has the responsibility toensure good business operations, following the governmental laws andregulations and pay tax on time. Therefore, Iceland Supermarket has theresponsibility to calculate their tax obligations and make payments onright time with right amount (Asche and et. al., 2015). Further, any illegaland fraud business activities must be eliminated.

Lenders: Iceland Supermarket has the responsibility to maketimely payment of interest to the shareholders. Moreover, enhancing therevenues, profits and cash generating ability tends to meet the lendersobjectives to a great extent. Another, good solvency position also helps tosatisfy the lenders.






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TASK 2

2.1 Different economic systems attempts to allocate resources effectively

For solving the problem related to allocation of resources as well aseconomic issues, it is more important to adopt an economic system(Nestle, 2013). There are many kinds of economic system by which acompany can allocate the resources in appropriate manner. Some of theeconomic systems are as follows.

Free market economy: It is commonly used economic systemwhere a company can identify market values of its products byintersection of supply and demand curve. In the following system, thegovernment has not made any kind of interference. For example, in UK,the companies can sell the goods at high prices because the demandof that service is high in the market and customer is ready to pay for it(Gould, 2012). In the same thing, to increase the supply of good inmarket, the employee has required to make more efforts. In thiscontext, they are demanding high salary and firms are willing to pay it.

Transitional economy: In this system, the present marketrelated organizations have developed where central plan economy hastransformed into free market economy. The intention behind adoptingthe system is developing own industries to give strength to economy ofcountry (Kissinger, 2012).

Command economy: Here, the government has right to takedecision alone regarding supply of goods and its pricing in market.Along with this, it may appoint any other organization which helps inallocation of resources (Mueller, Anderson and Wallington, 2011). Forinstance, UK government has restricted the different industries to paytaxes and then take the decision to utilized that funds in eitherdevelopment of community or else.




Mixed economy: It is mixer of command and free marketeconomic system where both government and industry mutually orindividually towards allocation of resources. For instance, the marketsforces have considered by UK government at first priorities duringallocate resources at grocery industry.

2.2 Assess the impact of fiscal and monetary policy on IcelandSupermarket and their activities.

The impact of fiscal and monitory policy on Iceland Supermarket is asfollows.Fiscal Policy:

Government of UK uses fiscal policy for monitoring and influencingthe national economy. It adjusts the government spending and tax ratesfor maintaining national economy. The increase and decrease in the taxesand government spending affects the working of Iceland Supermarket(Malik, Willett and Hu, 2013). If government increases its spending then itresults to increase in the demand of food products of Supermarket. Thisincrease in demand results to increase in sales of the food items whichdirectly results to increase in profitability. But if the spending is decreasedby the UK government than it this case, Supermarket has to suffer a greatloss due to the decrease in demands of food items. On the other hand, iftax rates are decreased by the UK government than it results to increasethe profitability of the Iceland. And if the tax rates are increased by thegovernment than in such case Iceland has to suffer (Arrow and Kruz,2013).Monetary Policy:

UK government uses this policy for improving the economiccondition of the nation and for this it adjusts the supply of money andinterest rates. Money supply and interest rates are inversely proportional




to each other as on the rise of money supply, interest rate decreases. Thisdecrease in interest rates results to give opportunity of taking cheaperloans to Iceland Supermarket. However increases in interest rates resultsto increase inflation in the country which is not good for the nation andorganisations as well. Government can handle the inflation by decreasingthe interest rates but this makes Iceland to suffer due to cut in spending(Gertler and Karadi, 2011).

2.3 Evaluation of impact of competition policy and other regulatorymechanism on activities of Iceland Supermarket

Competition is playing a major role in growth of a company anddelivered various benefits. In this context, UK government has developedvarious kinds of competition policies for all type of industries. CompetitionAct 1998 has ensured that in a market place, there should be a faircompetition between the organizations (Bigliardi and Galati, 2013). Theimpact of this framework on Iceland Supermarket is it helps in developnew services and products for community. With the help of this, firm hasbeen able to take competitive advantages and survive in the market. Onthe other hand, various regulatory mechanism like improved workingconditions, employment opportunities, health and safety at workplace etchas made impacts on business activities of Iceland Supermarket. In thisregards, company has developed several types of strategies and otherframework to raise the organization as a sustainable company inmarketplace (Ilagan-Manzano, 2013). The result of this it has helped firmto create a good image between competitors and showing presence atinternational level. Overall impacts of both competition and otherregulatory mechanism on Iceland Supermarket are company has able tomeet the objectives of business and provided greater customersatisfaction level.






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TASK 3

3.1 Explaining how market structure determine the pricing and outputdecisions of businesses

Pricing and output decision within organization are greatlyinfluenced by market structure. Therefore, Iceland Supermarket takesseveral decisions associated with pricing and output with reference tomarket structure:

Perfect competition- In the perfect market competition, thereare several companies are offering similar kinds of products andservices. Therefore, there is great competition identified amongcompanies in prefect competition (Hendrix and Haggard, 2015). In thiscontext, company takes pricing decision with reference to prices ofsimilar products of other companies as well as market demand ofparticular product.

Monopoly market- In such type of market there is only onecompany controls the supply of particular product and service due tounavailability of other competitors. In addition to that, entry of newcompanies is also restricted by particular organization (Mueller,Anderson and Wallington, 2011). In this context, an organization takespricing decision of different products and services with reference to itsprofit motive.

Oligopoly market- It is identified as important market structurein which limited number of companies is managing the demand oflarge number of buyers. Therefore, there is high competition addressedamong companies. In the situation, the management of IcelandSupermarket has to take appropriate pricing decisions with referenceto demand of different products and service as well as levelcompetition among companies.




Monopolistic market- In Monopolistic market structure, itinvolves limited number of companies that are producing wide range ofsubstitute products. In context, there is high rivalry among businessaddressed due limited number of companies (Kissinger, 2012).However, the substitute products are differentiated with reference tobranding. In this regard, an organization requires considering severalfactors for taking appropriate pricing decisions.

As per the above assessment of different market structure it can bestated that Iceland Supermarket is operating business within oligopolymarket. Therefore, organization has to consider pricing of similar productsof other companies in order to appropriate pricing decisions. In addition tothat management has to carry out detail evaluation of supply and demandof different goods and services along with market share of differentcompanies. These decisions are having direct impact on the overallgrowth and profitability of retail organization.

3.2 The way in which market forces shape Iceland Supermarket responses

There several market forces are playing important role for shapingIceland Supermarket responses to improve performance of organization.In this regards, some most important element are discussed below:

Demand and Supply- It is termed as most important marketforce which is great impact on the pricing decisions of company. Forexample if demand of particular product decreases then organizationhas to restructure the pricing different products and services to orderto manage sales of particular product. In addition to that businessentity has to consider demand of other products that are associatedwith other companies (Codro and et. al., 2014). This information assistsmanagement of Iceland Supermarket for taking appropriate decisionrelated to marketing of different products and service as well as pricing




to manage market competition. Here, for increasing the sales,Iceland Supermarket is required to manage production cost

Merger and Acquisition- Within merger business merges withanother similar company while at the time of acquisition firm acquiresany company who is incurring losses. Normally such type of conditionarises among sick and healthy firms. This approach finds very effectivein order to increase and market share of company in new overseemarket (McChesney, Reksulak and Shughart, 2015). In regard to this,Iceland Supermarket can expand the operations in diverse countries byundertaking merger and acquisition that plays important role forincreasing market share of company along with goodwill of company innew overseas market.

3.3 The business and cultural environments shape the behavior ofbusiness

For evaluation of various factors of external environment that aresignificant impact on management decision, PESTLE analysis is carried outbelow:

Political- Every business entity has to manage differentoperations and strategies as per the different government rules andregulations (PEST Analysis: What is PESTLE Analysis?, 2016). It includestaxation policies and other regulations that influence businessdecisions.

Economic- Iceland organization gets affected due to decrease inpurchasing power of individual and thus it affects the sales andprofitability of firm.

Social- Change in the taste and preference of people aboutdifferent products and services is also facing business operations ofIceland Supermarket. Thus, it is essential for business to determine the




needs of clients while developing different products and services(Nestle, 2013).

Environmental- Business has to consider issues associated withsafety of environment so as management has to develop appropriatestrategies for reducing the carbon emission as it affects theenvironment of country. However, it increases the cost of IcelandSupermarket that results in increasing the cost of products.

Legal- By introducing different competition policies bygovernment it affects the operations of firm. In addition to thatmanagement has to follow different government rules and regulationsin determination of pricing and quality standards.

Technological- By introducing new and innovative technology indifferent business operation, business entity is able to produce highquality products at attractive prices and thus enhances the sales offirm. It plays important role to increase satisfaction level of consumers.






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TASK 4

4.1 Significance of international trade to Iceland Supermarket

International trade means exchange of good as well as servicesbetween two or more oversees nations. Such type of business has raisedthe economic condition of world which has affected demand, supply andprice of goods and services at international level (Nestle, 2013). Thesignificance of international business to Iceland Supermarket is as follows.

1. By exporting or importing goods at global level, Iceland Supermarketand UK, both are able to earn valuable foreign currency. It hassupported economic conditions of nation and showing the presence ofcompany at international level.

2. With the help of international trade, Iceland Supermarket can effectiveutilized its resources and decreased wastage of it. It helps UK andother trade countries to manufacture the goods by sharing ofresources (Gould, 2012).

3. International trade has increased the living standards of people of UKand it has leads to increase the sales of services of IcelandSupermarket. The rising of living standards have increased thespending power of customers which will good for company.

4. Along with this, with the help international trade to IcelandSupermarket is greater sales volume, increased profitability and raisedability of firm to compete in retail market (Kissinger, 2012).

5. International trading has improved reputation of Iceland Supermarketaround the world and creates a good image in marketplace.

6. With the help of international trade, the dependency of IcelandSupermarket on domestic markets has reduced and stabilized the




7. fluctuations in seasonal market (Mueller, Anderson and Wallington,2011).

8. Major significance of international trade for Iceland Supermarket isattracting more and more investors so that it will be easy to open newstores and plants in different locations of world. In addition to this, italso helps in taking advantage of new technologies and minimizesoperating costs of manufacturing (What Is the Impact of InternationalTrade, 2016).

4.2 The impact of global factors on an organization

Organization exchanges their products with many countries in orderto increase their productivity. Global factors influence the operations ofbusiness by considering external factor of business-environment. Externalfactors includes behaviour of customers and business, risk awareness,taste and preferences (Kennerley and neely, 2003). Factors influence theoperations of Iceland Supermarket are as given below by modifying thestrategic polices and plans of the business:

Economic: UK has the 2th largest economy if they consider theirGDP and GNP. With the stability in the economics of UK businessrequire to conduct various operational activities in the business. Theeconomy of business consists with several factors such as size,structure, growth and population which help in increasing the salesfaster than their competitors. With the good economy, companyincreases its profitability and productivity by maintaining effectivestructure.

Political: Political conditions of UK get influenced by businessoperation. Government introduced several policies for the organizationand it is compulsory for them to be followed (Batra,




Kaufmann and Stone, 2003). Factors which company need toconsider such as tax changes, trade barriers and opportunities toenter into new market.

Social: Social factors influenced the personality of IcelandSupermarket. In order to improve business activities of company, theyneed to considered tastes and preferences of their customers. At thetime of recession people are unemployed so they don't afford topurchase their products with high rates.

Technology: Business activities affected by adopting varioustechnologies in business in order to survive in a competitiveenvironment. With the help of technology, company enhance itsproduct quality and reduces the cost. Company need to develop theirservices, because people prefer online services to shop goods andproducts rather than going store to store.

4.3 Evaluate the impact of policies of the European Union on IcelandSupermarket

European Union acquires various policies and has direct impact onIceland Supermarket. Policies of the European Unions help in increasingthe efficiency of business in order to make Iceland Supermarket as theleading company (Kennerley and Neely, 2003). They promote high level ofemployment by protecting member country rights and powers. TheEuropean Union policies have huge impact on the supermarket business.Some of the policies are as measures below:

Taxation policy: The EU policy will force the business to payhuge amount of tax. This has impact on the savings of IcelandSupermarket. Further, taxation policy will be finding out by consideringtwo aspects such as, individual and business tax. By consideringindividual tax in Iceland Supermarket, if tax rate is high thenconsumption will low in the business which affects the demand




of the product and service (Thomas, 2007). On the other hand, if taxis low then the cost of purchase the products will be high andIceland Supermarket reduces its market.

Employment policy: Through the change in the employmentpolicy the activities of Iceland Supermarket greatly influenced.Company need to bring changes in its hiring procedure of this policy(Yew Wong and Aspinwall, 2004). Thus, standards will be maintainedwithin the firm which would result in increasing its performance in thebusiness.

Fiscal policy: This policy is generated through government ofthe country in order to adjust their spending and taxation rates. IcelandSupermarket needs to increase its demands for the products theyrequired to spend more on goods and services in order to increase itsgrowth.






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CONCLUSIONAs per the above assessment, it can be concluded that every

organization has to consider wide range of external and internal elementssuch as government and employees for taking appropriate businessdecision. This report has addressed that market structure of particulareconomy is having significant impact on the management decisions suchas pricing and production. This study has addressed that the businessentity has to manage various element such as international traderegulations while expanding business in overseas markets.






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REFERENCESBooks and Journals

● Asche, F. And et. al., 2015. Fair Enough? Food Security and theInternational Trade of Seafood. World Development.

● Bah, E.H. and Fang, L., 2015. Impact of the business environment onoutput and productivity in Africa. Journal of Development Economics.

● Baldwin, W. and Scott, J., 2013. Market structure and technologicalchange. Taylor & Francis.

● Bonilla, P., 2015. Is our food safe? An Assessment: on the EuropeanUnion food safety policy, concerning the safety of meat & animal-derived food products in the EU.

● Cetindamar, D., 2015, August. Organizations with purpose: Benefitcorporations. In Management of Engineering and Technology (PICMET),2015 Portland International Conference on IEEE.

● Chiang, T.C. and Chen, X., 2015. Stock returns and economicfundamentals in an emerging market: An empirical investigation ofdomestic and global market forces. International Review of Economics& Finance.

Online● PEST Analysis: What is PESTLE Analysis?. 2016. [Online]. Available

through: <http://pestleanalysis.com/>

● What Is the Impact of International Trade?. 2016. [Online]. Availablethrough: <http://www.wisegeek.com/>


Sample Dissertation on Business Environment

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