Business Environment Analysis for Health Food Inc.

This assignment analyzes the business environment for a hypothetical company called Health Food Inc., which aims to provide healthy organic food in Australia. It examines both macro-environmental factors like political, economic, social-cultural, and technological influences, as well as micro-environmental factors such as suppliers, employees, and internal relations. The analysis highlights challenges and opportunities for Health Food Inc. in the competitive Australian food market.

BUSINESS ENVIRONMENT 1
Business environment
Name
Institution
Date
Contents

BUSINESS ENVIRONMENT 2
Introduction.................................................................................................................................................5
Macro environment analysis........................................................................................................................5
Microenvironment analysis.........................................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8

BUSINESS ENVIRONMENT 3

BUSINESS ENVIRONMENT 4
Introduction
Health issues are increasing all over the world due to the type of foods people are taking and the
lifestyle. In Australia, the consumption of fast foods has increased obesity cases and other health
issues. It is becoming important that this problem is solved. Otherwise, Australia will be dealing
with numerous health issues and a reduced lifespan. There are different methods of dealing with
the issue such as regular exercising and healthy eating. As such, Health Food is a food chain that
seeks to provide organic healthy food to the people of Australia. It will, however, faces
competition from fast food chains such as KFC and McDonalds, as well as, restaurants and other
healthy food stores such as Boost Juice Australia. This paper will explore the business
environment for Health Food Inc.
Macro environment analysis
Macroeconomic factors of an enterprise are the elements that it affects its business but it has little
control over such factors. These factors include political, economic, social-cultural and
technological factors (PEST). They influence the running of a company, and the only way a
corporation could deal with them is by adapting to the situation. The political factors comprise of
all the elements in the political arena. It also notes the legal factors. Australia is a nation that
enjoys political stability (Armstrong, Kotler, Harker, and Brennan, 2015. P. 30). For Health Food
Inc., it means that its survival will not be disrupted by political instability in the nation. However,
Health Food Inc. has to conform to the business regulations in the country. It has to deal with
taxation, pollution, and consumer protection laws. Otherwise, it may face penalties and risk
closure. Besides, different regulations will affect the company relating to their client and
employee relations (Gupta, 2013, p. 76).

BUSINESS ENVIRONMENT 5
Secondly, the economic environment affects the revenues of a company. The condition of the
economy dictates the wage rates and the price level of various goods. It also affects the
purchasing power of consumers thus the ability to buy various goods and services. Australia is
ranked as a developed nation by IMF and World Bank. It has economic stability. However,
cycles of recession and boom have been experienced. During a recession, businesses struggle to
survive as most people have cut on consumption (Cavusgil, et al. 2014, p. 80). Health Food Inc.
will face competition from companies that provide fast foods in the country and are well
established. Besides, restaurants provide healthy food as is Health Food Inc. objective. This
rivalry will affect its market share. With aggressive marketing and good public relations, Health
Food Inc. could acquire a strong client base.
Thirdly, the social-cultural factors relate to the people of Australia. People in Australia like to
consume fast foods. Health Food Inc. has to deal with this lifestyle and position its product in a
manner that attracts people to start taking healthy food. Especially, the young generation that
likes fast foods, Health Food Inc. has to convince this populace to buy its products. Additionally,
technological factors that Health Food Inc. should adapt to is online purchasing. It should set an
online website and provide free delivery services similar to the KFC and McDonalds (Fleisher,
and Bensoussan, 2015, p. 36).
Microenvironment analysis
The microeconomic environment consists of the factors that company has control over. They
include employees, suppliers and the owners. Health Food Inc. aims to provide healthy food in
the Australian food market. To do so, it has to acquire its inputs from farmers that participate the

BUSINESS ENVIRONMENT 6
cultivation of organic foods. It should screen these suppliers to ensure that the methods of
farming are conventional and that their inputs are not genetically modified. Health Food Inc. can
control the inputs it buys from suppliers by ensuring that they always get fresh organic products.
Besides, it can bargain the prices offered to ensure that control it operating expenses (Kew, and
Stredwick, 2017, p. 54).
Secondly, Health Food Inc. has to pay emphasis to its internal relation. The food industry is a
service industry that is highly dependent on the employee productivity. Health Food Inc. should
cultivate an organizational culture that encourages its employees to provide quality services to
the client. It will affect the reviews for Health Food Inc. and impact on its performance.
Additionally, the owners and the management team are responsible for making decisions and
strategies that guide Health Food Inc. into a successful business. Besides, these plans will affect
its market position, productivity, and profitability (Kew, and Stredwick, 2017, p. 54).
Conclusion
Health Food Inc. mission is to provide healthy food in the Australian food market. It should
focus on its micro and macro environment before making strategies to venture into the market. It
should position its product to ensure that it is competitive. Besides, aggressive marketing will
create awareness for the firm. It should use online services and provide free delivery to attract
potential customers and maintain its client base (Singh, 2015, p. 89).

BUSINESS ENVIRONMENT 7
References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014. International
business. Pearson Australia.
Fleisher, C.S. and Bensoussan, B.E., 2015. Business and competitive analysis: effective
application of new and classic methods. FT Press.
Gupta, A., 2013. Environmental and pest analysis: An approach to the external business
environment. Merit Research Journal of Art, Social Science, and Humanities, 1(2), pp.13-17.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Singh, M., 2015. Importance of Environment Analysis in Marketing.