Impact of Business Environment on Product Line and Segment

The assignment provided is an analysis of the impact of business environment on product line and segment. It discusses the effects of monetary and fiscal policy, cultural environment, international trade, and global forces on businesses. The report concludes that these factors shape the product line and business segment, and that EU regional policy can assist companies in expanding their operations by maximizing sales and production. The assignment is a comprehensive study of various aspects of business environment and its impact on product line and segment.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Identify the purposes of different types of organization.......................................................1
1.2 Describe the extend in which organisation meet their objectives.........................................2
1.3 Responsibilities of an organization and strategies employed to meet them..........................2
TASK 2............................................................................................................................................3
2.1 Describe how economic system attempts to allocate resources effectively..........................3
2.2 Evaluate the impact of fiscal and monetary policy on business organisation.......................4
2.3 Impact of competition policy and other regulatory mechanisms on the business activities. 4
TASK 3............................................................................................................................................5
3.1Determination of pricing and output decisions through market structure..............................5
3.2 Methods in which market force shape organizational responses..........................................5
3.3Impact of business and cultural environment to shape the behaviour of selected
organization.................................................................................................................................5
TASK 4............................................................................................................................................6
4.1 Significance of international trade to UK business organizations........................................6
4.2 Analyse the impact of global factors on UK business organizations....................................6
4.3 Evaluate the impact of policies of the European Union on UK business organizations.......6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
.........................................................................................................................................................9
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INTRODUCTION
Business environment is identify as a set of conditions political, social, legal, institutional
or economical facts that is not controllable and impacts the functions and activities of the
business entity (Business environment, 2018). These factor highly effects on business
performance and activities in favourable and unfavourable manner (Cassell and Blake, 2012).
This assignment is based on three type of entity such as private, public and voluntary. Virgin
group, Sainsbury and Oxfam are main examples of those organisation. This assignment includes
purpose of business, nature of the national environment, behaviour of enterprises and
significance of global effect. Main purpose of this report is to identify impacts on business
environment of company.
TASK 1
1.1 Identify the purposes of different types of organization
There are mainly three types of organisation such as public, private and voluntary. All
these business are play vital role in the development of economy. Sainsbury is a public limited,
Virgin group is a private organisation and Oxfam is a voluntary sector.
Sainsbury: This business is established by the John James Sainsbury and his wife in 1869
located in London, UK. It is a public limited company which is mainly control by the
government of the country (Cavalcante and et. al., 2011). In the organisation, recently 181,900
employees are working with motto to gain maximum amount of money.
Purpose of Sainsbury:
 Sainsbury has respect and duty for the environment.
 Company is developing employment opportunities.
 Main purpose is to serving best and quality food for health. Another motto is to serve the quality products and accomplish predetermined objectives.
Virgin Group: It is a type of private organisation which is operated, controlled and owned by an
individual. It was founded by Sir Richard Branson Nik Powell in 1970 which is located in
London, UK. They deals in different variety of products or services such as banking, health care,
consumer electronics and many other. Number of employees in the organisation is approx 71,000
all these are different motive to gain sufficient amount of money and provide service to the
customer.
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Purpose of virgin group:
 Purpose of the company is to make profit and to serve the society with best quality in
their products and services. Another motive is to develop strong and better position in marketplace.
Oxfam: It is a kind of non-profitable and voluntary organisation. It was founded by Cecil
Jackson-Cole in 1942 at Oxford, England.
Purpose of Oxfam:
 To create social economic situation rather than financial condition.
 Understand the various activities of community and voluntary organisations.
1.2 Describe the extend in which organisation meet their objectives
Stakeholders have different responsibility in the Sainsbury entity where both such as
performance and sustainability related data is existing for the stakeholders. In the organisation
some stakeholders such as supplier, customers, employees, investors and government are play
vital role in the success and growth of company (Cronan and et. al., 2011). In this they make
different effective decision about employment, investment and buying commodity of company
though the data regarding financial position of the company. Sainsbury PLC is a public limited
organisation that has to bring out their annual reports where entire information or data related to
the business financial performance and effectiveness is presented. Under this, company has
arranged a regular basis events with motto to meet with the needs of stakeholders through private
and public discussion. Beside this, feedbacks or commends of the neutrals are prioritized to
accomplishment of long term goals of the business. In this Sainsbury accumulates the
requirement of neutrals and then provide the information and values as per their needs.
Furthermore, company try to inspire collaborator by integration and innovations.
1.3 Responsibilities of an organization and strategies employed to meet them
Role and responsibility of the Sainsbury is facing dynamic variation over the years. These
modifications are mainly related to expectation of customers, demands of suppliers and local
communities (Elliot, 2011). In order to meet the challenges or provocations and execute the
expectation from large number of stakeholders, business entity is creating 20*20 commitments
or loyalty. Furthermore, skilled and talented HR are required to fulfil these type of commitment
while business entity is increasing over the years. In this an organisation has duty towards the
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business environment, which is retained due to the lower emission or venting of carbon beside
with their quality products rendering towards the society.
TASK 2
2.1 Describe how economic system attempts to allocate resources effectively
In order to solve issue about economic and to see the optimum allocation of resources, an
effective system of economic is highly required. One of the main challenge and issue in this is
balancing of economy through the nature of demand. It is always maximum, where resource are
sufficient (Hall, 2011). There are different economic system which are important for the
company to allocate accurate resources. These are explained as below:
The Free market Economy: It is depict as the most acceptable and satisfactory economy,
where the values of services and goods in market are determined due to the intersection of
demand and supply curve. In this intervention of the legal authority is avoided, where it is
confident that without legislation of government, the economy can be antitrust to whole.
The mixed economy: In this market and government are considers as a decision Creators
for the accurate resource allocation. It is the collection of command economy and free market
economy.
Command economy: Under this economy government is involve as a deciding and
determining factor. In this they decides the service and products supplier beside with the pricing.
Thus, legal authority solely takes marketing decision or productions.
Transitional Economy: This type of economy undergoing a fix structural transformation
to create the market based business entity. Macroeconomic standardization due to institutional
restructuring and reform beside this privatization are foremost elements of such kind of
economy.
From these kind of economy, company is going over the free market economy to assign
its products and services to the audience (Kaufmann and et. al., 2011). In this pricing is
important to identify the products to supply and the measure to produce.
2.2 Evaluate the impact of fiscal and monetary policy on business organisation
Fiscal policy: It is depict as an effective system where the growth and success of
economy is highly relay on the tax collection. There are some problems in Fiscal policies such
as maximise of value added tax and income tax. In these problems, company is impacted via the
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fiscal policy extremely. If the value added tax is maximised on the goods, then an organisation
has to develop innovative pricing strategy to create the preplanned profitability. On the other
side, if the increase of income tax, then large number of population will tries to pay minimum
fund, as they have to spend maximum number of taxes as per comparison to previous period. As
Sainsbury, it is a retail organisation which deals in grocery products, the maximise of income in
their fiscal policy has few effect on business operation.
Monetary policy in which demand and supply identifies the quantity allocation of fund.
Due to decreasing the interest rate, money supply in the marketplace is risen to see the adequacy
of capital in the marketplace (Lee and et. al., 2012). If large number of the person have accurate
amount of money, they will purchase maximum but save minimum. On the other hand, if interest
rate is minimum, people will eager to save, and therefore the Sainsbury will be earned higher
profit.
2.3 Impact of competition policy and other regulatory mechanisms on the business activities
Competitions is highly required for growth and development in the marketplace. Concept
of competition policy or strategy become necessary in the marketplace. As a competition act
1998, office fair trading, enterprise bill 2002, regulatory mechanism and commission act, all
these are known as a companies act 2006. thus, in this competition policy developed in United
Kingdom. Due to this policy, company is competing with various challengers such as Waitrose,
M&S, ALDI, ASDA, TESCO etc. Beside this business entity transmitting towards innovative
invention and own well-established goods which will influence the United Kingdom market in
unique features. Furthermore, with the agreement of restrictive execution such as employment
opportunities, wage to the employees and performing with the achievement of the environment,
all these are highly essential for the company (López-Gamero and et. al., 2011).
TASK 3
3.1Determination of pricing and output decisions through market structure
Market structure and pricing are show as a two essential elements in the economy. In this
Sainsbury PLC has no free in order to identify their product prices so that they can create
maximum profit. Market structure is divided into different parts such as perfect competition,
Monopoly, Oligopoly and Monopolistic. In the case of perfect competition, customer has
different choice. Sainsbury operating their business operations in such kind of structure where
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the identical or similar retail market are existing in UK. Large number of the person are purchase
the products of Sainsbury. Thus, market structure of the company determines the output
decisions and pricing where they never follow to make maximum profit.
3.2 Methods in which market force shape organizational responses
Market forces are included through their effects on the judgement making of business.
There are various kind of market forces such as demand and supply, economic of scale, short and
long run concept, technology with worker skills, elasticity of demand and supply. All these are
important for the company to maximise their performance.
Demand and supply: In this company wants to supply a innovative kind of grocery
products which will be easy in order to prepare, then company must determine the demand and
supply with regards to the retail products (Onetti and et. al., 2012).
Elasticity of demand and supply: In this Sainsbury wants to develop a speedy sale of
grocery items at the ending of year, company must provide discount to their clients, where
product price will be minimum.
Economies of scale: Under this, business organisation produce food products in large
numbers that will minimum costs of creating via the learning curve model.
3.3Impact of business and cultural environment to shape the behaviour of selected organization
To run a business operation in successful manner, it is necessary to know the business
environment in proper way. The cultural environment in not controllable by the organisation. In
this cultural environment identifies the placing, promotion, pricing, and production of Sainsbury.
Values, attitudes and beliefs of the customers are determine as a external factor which have
effects on company and production selection of organisation.
On the other side, workforce of the company and their cultural attributes and demands
from the internal force of the enterprise (Owusuand and Habiyakare, 2011). If the workers are
stay on by ethical consciousness and strong value, then it will see the ethical cognisance of the
business as a whole.
TASK 4
4.1 Significance of international trade to UK business organizations
The importance of international trade in United Kingdom is commendable and obvious
for the development of economy of the country. One of the main importance of international
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trade to the company is noticeable. Due to this, business entity has attained the maximum
amount of money of few price transportation as well as communication. It is also support the
company to make technologically and innovative in their business operations. Further, it brings
the chances of transferring fund with few costs which directs to the long term and sustainable
development of company. In this investment opportunity grow through the effect of international
trade, thus it is important for the sustainability and growth of organisation (Owusuand and
Habiyakare, 2011). Furthermore, the brand image and goodwill of company is accomplished due
to international trade.
4.2 Analyse the impact of global factors on UK business organizations
Global factor has different effect on the development and growth of Sainsbury. With the
substance of international, company must look for innovative marketplace before the challengers
to develop competitive edge over the competition. In this emerging market is innovative aspects
of innovation as well as employment for company, if they creates the optimum utilisation of the
marketplace. Further, an organisation shout evaluate the regulatory atmospheres of international
business to comply with rules and legislation in proper manner (Cassell and Blake, 2012). If
business let down to do so the better image of company will be adversely impacted and the
global reputation will be stained. However the world trade organisation policies can be a better
origin of growth for the Sainsbury.
4.3 Evaluate the impact of policies of the European Union on UK business organizations
In this Sainsbury PLC has impacted by the EU policies to few extent. Under this Climate
change act has mark the number of different Carbon Emission where business entity who have
minimum carbon emission that will be essential. In order to follow with this legislation, and to
develop the better goodwill as a obsessed entity for the business environment, in this company
has well-tried to extent the measure of carbon emission (Cavalcante and et. al., 2011). On the
other hand, business entity fails to follow with this legislation then it will be show as
unfavourable for organisation. Such kind of situation negatively impact the goodwill of the
Sainsbury. EU regional policy assist company entity to expand their business operation due to
maximise of sale and production.
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CONCLUSION
From the above mentioned report, it can be concluded that business environment has
different factors that shape the product line as well as business segment. The effect of monetary
and fiscal policy of the business has provide significance here beside with the effect of cultural
environment. Furthermore, the significance of international trade and effects of global forces is
determined with the substance of globalisation. Policy of EU and its interconnection to the
organisation is presented with mention to the specific policy.
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REFERENCES
Books and Journal
Cassell, M. A. and Blake, R. J., 2012. Analysis of Hofstede's 5-D model: the implications of
conducting business in Saudi Arabia. International Journal of Management &
Information Systems (Online). 16(2). p.151.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Cronan, T. P., and et. al., 2011. Decision making in an integrated business process context:
Learning using an ERP simulation game. Decision Sciences Journal of Innovative
Education. 9(2). pp.227-234.
Elliot, S., 2011. Transdisciplinary perspectives on environmental sustainability: a resource base
and framework for IT-enabled business transformation. Mis quarterly. 35(1). pp.197-
236.
Hall, T. J., 2011. The triple bottom line: what is it and how does it work?. Indiana business
review. 86(1). p.4.
Kaufmann, D., Kraay, A. and Mastruzzi, M., 2011. The worldwide governance indicators:
methodology and analytical issues. Hague Journal on the Rule of Law. 3(2). pp.220-
246.
Lee, S. M., Olson, D. L. and Trimi, S., 2012. Co-innovation: convergenomics, collaboration, and
co-creation for organizational values. Management Decision. 50(5). pp.817-831.
López-Gamero, M. D., Molina-Azorín, J. F. and Claver-Cortés, E., 2011. Environmental
uncertainty and environmental management perception: A multiple case study. Journal
of Business Research, 64(4), pp.427-435.
Onetti, A., and et. al., 2012. Internationalization, innovation and entrepreneurship: business
models for new technology-based firms. Journal of Management & Governance. 16(3).
pp.337-368.
Owusu, R. A. and Habiyakare, E., 2011. Managing risk and turbulence in internationalization of
foreign companies to South Africa: Lessons from seven Finnish business-to-business
firms. Journal of African Business. 12(2). pp.218-237.
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Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
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