Business Environment Analysis: Challenges and Strategic Considerations

This report provides a comprehensive analysis of the business environment, examining both internal and external factors that affect a company's operations. It uses Booker Limited as a case study to illustrate the impact of political, macroeconomic, social, and technological factors on a retail business. The report delves into the challenges faced by businesses, such as the effects of government regulations, changing consumer behaviors, and technological advancements. It highlights the importance of adapting to these factors to maintain profitability and customer satisfaction. The analysis covers the impact of legal and social factors, as well as the positive and negative effects of technology. Furthermore, the report reflects on specific challenges related to political and technological factors, such as navigating economic systems and adopting new technologies to meet consumer demands. The conclusion emphasizes the need for businesses to consider both internal and external factors when formulating strategies to ensure success and enhance brand value.

THE BUSINESS ENVIRONMENT
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TABLE OF CONTENTS
THE BUSINESS ENVIRONMENT...............................................................................................1
INTRODUCTION...........................................................................................................................3
Task 5:..............................................................................................................................................3
5.1 Key issues in business environment......................................................................................3
5.1 B Impact of the issue that impact on business.......................................................................5
5.1 C Reflect on any two challenges you faced in ‘a’ and ‘b’ above..........................................6
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................9
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INTRODUCTION
Business environment means all the external and internal factors that affects company
directly or indirectly including customers, management regulation, employees, suppliers etc. All
these factors are connected with each other. External factors are not controllable like political,
microeconomic, macroeconomic, social, technological factors. And internal factors include
organizational culture, employee satisfaction, working environment. These all factors of the
company relate with each other. To overcome from this problem company, adopt marketing
plans, business plans, or strategies.
Task 5:
5.1 Key issues in business environment
Business environment is the total of internal and external environment. That is directly
impact on business growth but business factors help company to understand the needs and wants
of the customers. And helps to create business plans accordingly (Leitner, 2016). We took an
example of the booker limited company this company offer food items and beverages it's a retail
based company in Wellingborough that this company faces the problems regarding business
environment external factors affect its prices of goods and services and the demand of the
product external factors reduces the purchasing power of the customers and changes the needs
and wants. The Following factors are including in external factors.
 External factors are those factors that impact directly on the company. External
factors include competitors, supplier, customers, political, legal, technological
factors.
 External environment includes political environment which is very important for
business to follow government rules and regulation which is necessary for
consumer protection. For example, laws, regulations, tariffs, trade barriers, war
and social turbulence. These factors reduce the profit efficiency of the business
and also from this factors company changes their prices of products for example
government impose high taxes on retail companies in this situation Booker
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limited increases their prices of the product and services. From this political
change company faces low profit due to decreasing of sales because when prices
are increased demand will automaticity decreased.
 Macroeconomic factors affect the whole economy for example Booker limited
faces the problem of reducing overall sales because consumer saving rates are
become increased means consumer start saving their money for investment or for
future use in respect of company they face lose so this factor affects companies
profit.
 Social factors are related to social relations these factors affect due to changes of
fashion trends or cultural changes, environmental changes etc. to overcome from
this factor company should always find some innovative ideas and product
services so that they full fill social needs. For example, booker limited introduce
new product that is all organic it increases the sales of the product and gives good
amount of profit.
 Technological factors are those factors which gives either positive results or
negative affects to the company. Some new technology increases the productivity
of employees and give good output to maximise profit (Wong, and et.al., 2015)
Also, the negative effects come from the new technology for example booker
limited introduce new software in the company to increase the productivity of the
employees but due to lack of knowledge employees get stuck and create big
hassle for the company. From this situation company occur heavy loss of money
and time.
 Microeconomic factor are those factors who affect companies through demand,
supply, market size, distribution chain.
Internal factors are those factors which is important for business success in planning
organising controlling. These factors are responsible for management success (Charter, 2017).
Generally, these factors occur due to lack of communication lack of interaction with employees.
Dissatisfaction with the managers and leaders. Following factors include internal factors.
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 Internal factors include employee dissatisfaction due to lack of motivation support
from mangers and leaders (Boasson, and Wettestad 2016). But some organisation
provides training and development centres for employee’s different facilities for
employees so that they satisfied with the company’s policies.
 Lack of employee’s communication affects the company negatively from this
reason there is no relationship between subordinates and employees does not
satisfy with the companies' atmosphere
 For employee’s satisfaction there must be need of good relation positive
environment these internal factors harm the employees' status against the
company due to dissatisfaction they cannot achiever their target properly.
5.1 B Impact of the issue that impact on business
Business environment includes many factors which affect company directly or indirectly
Two factors develops such as legal factors and social factors these two factors affect company
directly.
Technological factor these factors either give positive impact or negative impact this
factor depends upon the employee’s weather they understand or not. Due to this reason customer
faces the problem. For example, booker limited install new technology and change their online
features from this effect's customer feel discomfort and fails to reach the target in that situation
the impacts are on negative way. (Carroll, and Buchholtz, 2014). These factors change the
environment and create lots of hurdles in the company. On the other side when this technology is
created for the employees and they get not satisfied and unhappy so this is the measure issue.
Social factors of external environment may also create many issues like changes of
demand, reducing the power of purchasing. Some reasons by which these things happen are
changes of fashion trend, due to changes of prices of the product, changes in company’s
technology for example booker limited has increase their prices food products from this change
company faces the problem of low sales and their customers move to the other company.
Conclusion of this task is business environment is keep on changing due to external or
internal factors. These all factors are directly impact on business profit weather it is positive or
negative. From the perspective of customer, they always want variety of product and services at
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lower price. It is the responsibility of the company to give the services accordingly. For example,
booker limited offer one full meal under $150 for this new offer most of the customers attract
and feel full satisfaction.
5.1 C Reflect on any two challenges you faced in ‘a’ and ‘b’ above.
The two challenges faced under the situation a and b are as follows:
In challenge A: The retail sector is affected down many factors in form of internal and external
factors but the key factor which affects the most is political factors and company facing down a
lot of challenge with that regard. Political factors affect the business by making environment less
friendly and there can be a better laws and but the laws which are existing and running are not
having control on business and it also affect down the political environment. The political factors
affected down the business because business has to fulfil down a lot of requirements to carry
down operations and it’s been sometime difficult for the business to apply such laws and
regulations and have to face down the winding up situation(Quinn, 1988). The business can’t do
anything in such situation and they have to obey down all the rules and framework by that it can
conduct its operations. The certain other political factors that retail sector is affected are as
follows:
 Economic system: The first factor that country is facing is economic system because
different country have different economic system and the adjustment been made by a
retail sector by taking out such considerations otherwise it creates a negative impact on
there business.
 Socialist economy: Under socialist economy most of the retail sector business and
industries are owned by state only and it make the business difficult for the retailers
because they have work as per the directions of state govt.
 Governmental system: The government create such system where people have to follow
and work according to that only(Aaker and Adler, 1984). There are lot of boundations
and rules are involving under this where businesses have to follow, otherwise it make
down the retail business difficult for the retailers. The certain laws, regulation, policies,
procedures and numerous formalities have to follow by company during conducting its
business activity and sometimes it’s been really difficult for the small company and even
large company to follow out Each and every procedure an implement it during working.
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The unnecessary intervention made by government also makes down the retail activity
difficult.
 There are various numerous other factors are also available such as
bureaucracy,corruption,ineffective system and so on, these are the certain political factors
that been a challenge for retail sector and the retail business have to follow all these
factors and satisfies all the conditions in order to conduct down meaningful business.
In challenge B:Food and retailer sub sector under the consumer service industry, the
technological factor affect a lot because the consumer taste and changes are not similar it will
be changes according to the situations and demographic condition which create in the market
such as taste, fashion and preferences and company have to produce the goods accordingly
and that can only been possible with the help of technology and sometimes it’s been really
difficult for the company to adopt down the new technology and time to time improve and to
bring changes under that because it’s not been possible at all because as the climatical
conditions changes ,the taste ,fashion ,preferences of the consumer are also changing and
every time they want something new and in a hope to get more and in such case many of the
company are not in a position to produce down the new products and provide different
services to its consumers and due to lack of technology they are not been capable to produce
according to their demand(Ruff, 2006).
The company sometimes not been upgraded there latest technology and by using the same
technology in every case are not been able to produce down goods or time and that
technology directly affect its quality and also wasting the company time and resources and
company are not able to give satisfaction to its customers due to that outdated technology and
it been sometimes difficult for the retailers and wholesalers to adapt such technology as per
their consumer demand and have to face down a lot of challenges in this field to give
maximum satisfaction to its consumers every time.
CONCLUSION
It can conclude from the above report that under the business environment there are two
factors that affect the business operations directly and indirectly and they are internal as well as
external factors. The business has to conduct down their business activity by considering out
both the factors and prepare down various policies and plan and implement it while conducting
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down its retail functions. It is essential for the retail business to work accordingly to raise its
objective and moreover, and there are certain issue which arise in the retail and wholesale
industry and it is essential for the retail business is to considered out all such factors and situation
which create in the market and produce the good according to the demographic conditions that
been create in the market in order to provide satisfaction to its customers so that helps down
them in increasing productivity and increasing its brand value.
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REFERENCES
Books and Journals
Aaker, D.A. and Adler, D.A., 1984. Developing business strategies(Vol. 200, No. 1). New York:
Wiley.
Boasson, E.L. and Wettestad, J., 2016. EU climate policy: Industry, policy interaction and
external environment. Routledge.
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder
management. Nelson Education.
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L.,
2014. International business. Pearson Australia.
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
Leitner, I., 2016. STRATEGIC DIAGNOSTIC ANALYSIS SERVICES OF WATER AND
SANITATION IN ROMANIA. EXTERNAL ENVIRONMENT ANALYSIS. Scientific
Bulletin Series D: Mining, Mineral Processing, Non-Ferrous Metallurgy, Geology and
Environmental Engineering, 30(1), p.71.
Quinn, R.E., 1988. Beyond rational management: Mastering the paradoxes and competing
demands of high performance. Jossey-Bass.
Ruff, F., 2006. Corporate foresight: integrating the future business environment into innovation
and strategy. International Journal of Technology Management, 34(3-4), pp.278-295.
Wong, A.C.N., Luo, Y., Jing, X., Franzenburg, S., Bost, A. and Douglas, A.E., 2015. The host as
the driver of the microbiota in the gut and external environment of Drosophila
melanogaster. Applied and environmental microbiology, 81(18), pp.6232-6240.
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