Assignment | Business Environment

Added on - 03 Dec 2019

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BUSINESSENVIRONMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 2............................................................................................................................................12.1 Economic system attempting to allocate resources..........................................................12.2 Impact of fiscal and monetary policy on ASDA..............................................................32.3 Impact of competition policy and regulatory mechanism on ASDA...............................5CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................8ILLUSTRATION INDEXIllustration 1: Different economic system.......................................................................................3Illustration 2: Fiscal and Monetary policy.......................................................................................4
INTRODUCTIONBusiness environment is defined as a sum total of all the internal and external factorswhich influence the performance of business organization. Business environment consists ofemployees, customers, suppliers and government as well as political, economic, social, andtechnological factors. On the basis of above statement, it is quite clear that business environmentis generally a mixture of all the dynamic, complex and uncontrollable factors in which arenecessary to be considered by the business enterprise for regulating their activities in an effectivemanner (Dreher, 2005). In this context, organization undertaken for the present study is ASDAwhich is a British founded supermarket and a subsidiary of Walmart organization. Mentionedcompany apart from the retail format deals in other products like financial services and mobilephone services in order to satisfy the needs and wants of customers. Present report focuses ondifferent economic systems which help the organization to allocate resources effectively.Further, this report has also showcase the impact of fiscal and monetary policy on cited companyalong with describing the effect of competition policy and other regulatory mechanisms.TASK 22.1 Economic system attempting to allocate resourcesThere are different types of economic systems which can be adopted or followed by themanagement of organization. These economic systems are introduced by the government inorder to allocate resources more efficiently and effectively. Some of them are stated below as:Planned or Command Economy-Under this type of economy, government determinesthat what types of goods need to be produced, how much it should be produced and alsoat which price it would be offered for selling in the market in order to satisfy theconsumer's needs (Buyya, Abramson and Venugopal, 2005). Here, government takes thefull control of economy for allocating the scare resources like labor, capital, machineryetc. Local body has full information regarding the countries surplus and production.They take effective decision by considering the affordability of individuals.Inappropriate decision taken by government due to shortage of surplus put its hugeimpact on the business practices of the organization such as ASDA. Further, governmentof UK takes decisions on major issues like tax on food items and other utilities. Taxamount adds with the product cost and individuals have to pay more than the actual cost1
of product (Mysiak, Giupponi and Rosato, 2005). Moreover, command economy persistssome advantages and few of them are stated below as:All types of resources are quickly collected on a large scale.Government body creates the industrial power and monolithic projects are completedby attaining the imperative social goals.Free enterprise economy-It is an economy where government imposes very fewrestrictions and mentioned company can operate its business effectively and efficiently.Under this segment, UK government has a very few numbers of companies in the marketand all rules and regulations implemented by government are quite flexible and feasible,so that ASDA can perform its business activities in more effective manner. ASDA.Further, cited company can produce goods and services by analyzing and considering thedemand of the market. However, being a subsidiary company of Walmart, ASDA'sfunctioning has been revolved throughout the globe and it is considered as the biggestretail organization in the world (Stonehouse and et.al., 2009). Further, they are getting astiff competition from Tesco and Sainsbury but it has a large base of its potential andloyal customers. Some core advantages of this type of economy are as follows:Individual’s preference and spending are taken into consideration instead ofgovernment policies and restrictions.Market allows company to buy land, building and property with few restrictions aswell as legal documentation.Mentioned company has ability and right to choose suppliers of their choice throughwhich ASDA can extend their revenue and profitability.2
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