Contemporary Business Environment

This document explores the impact of business, cultural, and natural environments on organizations, using the case of WM Morrison plc in the retailing industry. It discusses how these environments shape organizational behavior and the importance of conducting PESTEL and SWOT analysis. The document also highlights the significance of economic, social, political, legal, technological, and environmental factors in shaping business operations.

Contemporary Business
Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................4
How do the Business, Cultural, Natural Environments shape the behaviour of your chosen
organization?..........................................................................................................................4
PESTEL and SWOT analysis.................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
Business environment is defined as a collection of all external as well as internal factors
like customer needs, employees, supply and demand, expectations of clients or employees,
management, suppliers, innovation in technology, activities of government, social trends and
economical changes. All such variables s the functioning and operation of company and effects
how an organisation will work in dynamic environment. These current elements s the business
environment and its associated situations. The most vital aspect of any organisation is its
business environment. The forces like media, competitors, customers, suppliers and investors all
collectively constitutes business environment. The existence of competitive and dynamic
situation requires contemporary business environment which assist in coping up with pressure
and helps in building most productive and efficient product which have cheap price and high
accessibility. Such potential contemporary business environment aids in determining major as
well as minor business opportunities which further helps in making a business plan with an
existing resources. Such opportunities later enhances the growth and profitability of organisation.
Micro environment and macro environment are two types of business environment that plays
important role in developing better implementation plan and strategies which help in increasing
productivity.
Now a days, interacting with business associates and potential stakeholder are not a
regular part of attaining task but, its now a matter of necessity related in giving competition to
other companies. Marketing experts and consultants believes that every business should have a
role of extreme promoter as well as communicator. The main key which involves in effective
communication is what to say and whom to say, due to which marketing communication
strategies comes into play. The importance of such environment is immense to all form of
business by assisting the business to adapt with frequent modifications and to further use such
alteration as opportunities. WM Morrison supermarket plc has been considered in this report
which is founded by William Morrison in 1899. It is the fourth biggest supermarket chain in
United kingdom which has its headquarters in Bradford, England. The company servers large
number of customers with various products like clothing, food and beverages, drinks, books,
CD's, magazines and many more. The business environment of such retailing industry gets d by
its suppliers, clients, employees supply, demands and other factors. The report will focus on
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understanding behaviour of WM Morrison plc due to cultural, business and natural environment
which will be followed by PESTEL and SWOT analysis of respective organisation.
MAIN BODY
How do the Business, Cultural, Natural Environments shape the behaviour of your chosen
organization?
The operation of business gets highly affected by cultural as well as natural environment
of company. The structure of WM Morrison plc is legally recognised by jurisdiction and has
been running from past 121 years. The smooth functioning, sound flow of communication and
enhanced supply chain management is the result of contemporary business environment. The
structure of organisation primarily focus on areas like store operations, regional as well as
centralised operations which aids in understanding their potential customers and identifies ways
through which more customers can get attracted. Effective communication among managers and
corporate recruiters is also necessary to lower staff turnover and enhancing efficiency of
employees. An economic environment comprises of all external factors which have the capacity
to purchasing habit of customers and enterprise, thus influencing the entire performance level of
business and also help in shaping the organisation behaviour. The factors related to such
environment may be macro or micro in nature. Macro factors like income, inflation, tax rate,
saving rate, employability, recessions all affects the operation of business at large scale. The
micro variables like competition, availability of resources, size of current market, demands all s
business at small scale.
An economic system is a way through which many societies and government dispense
and coordinate available resources, their product and services across geographical region.
Economic system potentially regulates production which majorly includes labour, capital and
entrepreneurs. There are different types of economical system which has its own unique set of
assumptions and concept. Market economic system may be utilised by respective company
which confers the strategies related to distribution of their products and services. Market
economy is such kind of system where major focus is given on supply and demand which have
observed to regulate the production of servicing and products. Supply here comprises of capital,
labour and available resources whereas, demand involves purchase of business and government.
The pressure of competition forces the given company to lower its rate for ensuring that its goods
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are getting purchased at much high rate than others. The market economic relies on efficient
market where they will be selling their product and all their potential buyers will be, such
economy thus assist in creating more innovative ways and products through which company can
earn more. The economic policies are some actions which are being taken by government in the
domain of economy which covers systems related to interest rates, budgets, inflation as well as
various interventions associated with improving company's economy. WM Morrison got effected
by rising inflation which made the growth of such organisation slow and little affected. After a
period of time, company dealt with the issue effectively and have been observed that
supermarkets are evidently benefited from higher inflation because they increase their prices
which ultimately pass on to consumers that further alleviates their revenue. Morrison despite of
inflation and cost pressure, it stayed ahead of its rivals and focussed on giving string competition
to its competitors due to their loyal customers. The economic condition of respective business
was observed which reflected the under performance revenue expectations due to unexpectedly
lower rate of income. The political and economical instability was the major factors which lead
in such situation and also in shaping enterprise actions. The low economic status of respective
business can be improved by investing on such products which are more in demand by
customers. It has been observed that by presenting such demanded product in new or innovative
way, can help in attracting diversified people which increase the revenue. Providing
opportunities to more skilled employees and promoting large marketing strategies may also help
in regulating the economical state of WM Morrison plc.
Non economical environment includes social, political, demographic, legal and
technological environment which have the potential of affecting business operations. The social
environment consist of society's beliefs, values and perception which comes under internal as
well as external social environment. The external social environment is the society whereas an
internal environment are its beliefs and customs. Every business must utilise and adapt as per
their external environment in which they must aware about all society's perception and desires. A
change in belief system which may involve in promoting more organic product in Morrison can
alter the way society look towards the business and thus highly influences their success rate.
Political environment of company refers to governmental actions that have a great impact on
management and organisation of business (Schaltegger and Burritt, 2017). The capacity of
political factor is huge and can majorly affects the economical, cultural and social environment.
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Government stability, rate of corruption and tax rate are involved in such factors. Corruption
level can hamper the growth of business by rendering more power to corrupt people, respective
business can gets easily affected by such variables when their success rate gets lower by volatile
trading environment. The demographic environment lay emphasis on such people who are most
likely to purchase their items or products (Erl, Khattak and Buhler, 2016). Demographic factors
like age and gender are specifically targeted and majority of products as well as services are
promoted with context to a particular age group and gender for enhancing their earning and
efficiency. Such environment clearly specifies minute details about a certain population
depending upon their gender, race, class, age, income and family status. Using such data help
such retailing company to manufacture or promote such products which are ideal for their use
and feasible to purchase. Thus, the marketing planning and trending can be easily set by
analysing such environment crucially. Legal environment like the policies or set of rules
formulated or implemented by government have the ability to effect organisation growth rate.
Morrison plc should have a deep knowledge about the current policies and amended guidelines
for making the work of company as per these condition. It has been seen that if duplicate product
are found to be kept in given supermarket then it is against legal policies, which later result in
heavy fines and punishments. Such practices can potentially lower their brand value and loss of
loyal customers. Technological environment is a basic fundamental of developing process and
making high end and innovative products for popularising their brand name. The services which
are highly creative and render customer chance to receive unique items are highly promoted in
such environment. The role of technology in reducing digital risks have allowed the respective
company in making their products available on online market, this practices made their products
and items accessible to large number of people. These activities made a large impact on growth
and productivity of company and made a their presence available at online as well without any
kind of threat (Lee, 2015).
The natural environment has been considered as one of the most important factor which
have a great role in affecting the shape and working of business. The impact of natural disaster,
climatic conditions, location, weather, availability of natural resources and topographical aspect
all are equally responsible in operation and administration of business. The natural environment
comprises of two major environment which are ecological and geographical. The geographical
environment has seen to largely determines the quality and type of decisions which will be made
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regrading business. The availability of raw material have majorly affected WM Morrison plc due
to which the company has to decide at what particular location they should extend their business.
The natural structure of area should be as per organisation preferences because they too can
affect kind of decisions which will be taken in businesses. For this reason, the manufacturing site
must be kept at such location which is closer to the place that have high availability of resource
and is also suitable as per climatic condition (Raziq and Maulabakhsh, 2015). The ecology is
considered as an area of science which deals with relationship among all living creature with non
living things. To safeguard society, it is most important to keep an environment safe and
protected from any hazardous activities and gases which may be released during the
manufacturing or marketing strategies. Climate change here plays a critical role and posses a
threat to companies. The increasing issues of adverse weather status and global warming made
many industries working potential low. Morrison being fourth largest supermarket in UK may
face difficulty in managing sound supply chain due to bad weather or climatic condition. Such
practice may result in delaying of product and eventually decreasing the productivity of
organisation. Pollution due to disposal of waste in water bodies or land may also have adverse
impact on business strategies, which consequence in disturbing supply chain and high cost of
raw material. For such practices Morrison should build high contingency plans for promoting
contemporary business practices. Green agenda are now more focussed by such companies for
promoting their business operation sin environmental friendly way so that their is least effects on
global environment (Mayanja and Perks, 2017). The respective company uses different processes
as per Corporate Social Responsibilities for enhancing their brand value, attracting large
customers and employees as well as promoting such beneficially functions for eliminating
negative impact on environment.
PESTEL and SWOT analysis
A PESTEL analysis is an effective tool used by marketers to monitor and analyse
external factors of the environment that have a major impact on environment. It is an essential
tool to measure several key factors like Political, economical, Sociological, Legal, technological
and environmental. PESTEL analysis help marketers of the Morrisons to insight into external
factors that impacting on their enterprise. Factors of PESTEL analysis span from political to
legal are discussed here.
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Political -
Political factors which may effect on profitability or chances of sustaining of the
organisation are majorly diverse. There are number of political factors that Morrisons may be
exposed to. Level of political stability of the country, various laws and regulations developed by
the government such as contract law, integrity of the politicians and many other factors are there
that may have impact on operations of respective organisation.
Economical -
These are the factors that pertain to the economy of the nation such as inflation
rate,interest rate, foreign exchange rate and current status of economic cycle. Morrison needs to
consider all such factors in order to run their organisation in a smooth manner.
Social -
Social factors that may impact on Morrison are a direct reflection of the society in which
Morrison operates its business. It consist of beliefs, cultures, values and attitudes which is hold
by number of individuals as a community. Organisational needs to consider demographics of the
individuals such as their respective gender and ages.
Technological -
It is an important factor to consistently and constantly innovate in order to enhance
productivity to eliminate the risks in near future (Namada, 2018). Morrison needs to introduce
technology in their organisation in order to enhance their business and to develop a strong
customer base.
Environmental -
Various industries hold many different standards of environmental protection as their
norms. Environmental factors that may effect Morrisons are current conditions of weather for
transportation and export of resources and finished products. Climate changes and many others.
Legal -
It includes factors like equal opportunities, health and safety, customer rights, product
safety and labelling. Thus respective organisation needs to consider all legal factors for ensuring
safety of their stakeholders and to develop a positive brand image.
The SWOT analysis assist in identifying internal strategic elements like strengths and
weakness and external factors like opportunities and threats of an organisation which have a
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large effect on viability and competitiveness of company an its products and services (Lenart-
Gansiniec, 2018). The SWOT matrix of WM Morrison plc are discussed below.
Strengths -
Morrison has made a great success by entering in brand new market, such expansion
assisted the company in building high revenue system and further divided economical cycle. It
has a strong brand portfolio and have the capacity to make better flow of money for expanding
their business into new areas. Through training and developmental programs employees are
trained for making them highly skilled and more efficacious.
Weakness -
Morrison can improve their marketing strategies by advertising and delivering the
product which are left and have properties which can be purchased by many consumers. The
structure of organisation is not much compatible with recent business models which sometimes
hampers in expanding their business roots to another region (De Vita and Case2016).
Opportunities -
The major development in Morrison will result in dilution of competitors advantage and
further ensure the company to enhance its competitive ability when compared to other
organisation. New environmental policies and Corporate Social Responsibilities have created an
another level of processing which have attracted a large number of population towards the brand.
Threats -
New and more advanced technologies formed by competitors could be a very serious
threat in disturbing the short as well as long term goals. Liability laws are different in all
countries, due to which Morrison may exposed to several liabilities with respect to their policies
and way of working. The want of highly profitable items is seasonal and in such case any
unlikeable event during peak time may adversely impact the level of revenues which can be
generated by respective business in less to medium time period.
CONCLUSION
From the above report it can be concluded that, business environment is a collection of
expectations of clients or employees, customer needs, demand, supply, suppliers, employees,
management, activities of government, economical changes innovation in technology and social
trends. Contemporary business environment exist when there is a high competition and more
resources are required in highly dynamic situation. Such environment as per the report helps in
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coping up with such ever changing situations and assist in making better strategic plan for
attracting large number of people and increasing the company's productiveness. These expected
contemporary business environment helps in deciding leading as well as secondary enterprise
opportunities which further aids in creating a business plan with an active and present resources.
Such opportunities in future intensify the maturation and profitability of organisation. An
economic system are defined as a manner through which number of governmental agencies and
societies distribute the resources from one region top another. Such system have potential to
maintain capital and division of labour (Eke, 2018). Market economic system is utilised by WM
Morrison plc according to the report which lay prior emphasis on supply and demand. The
advantage of such economy help in enhancing efficiency, innovation level and productivity.
There are no involvement of government bodies and all decisions are taken by the mangers and
workers of organisation. All such responsibilities result in high innovation and creativity.
Conclusion can be drawn that the economic policies as well as economic condition of
Morrison have made stability issues which later on solved by making more innovative practices
for giving a high competitive edge to the rivals. The company got affected by rising inflation and
price pressure which lead into political and economical instability. Though, company adopted
many advanced technologies and dealt inflation by presenting product in whole new way. All
factors related to non economical environment also have a great consequence on running of
business. The technological environment made the company free from threat of online breach,
which gave company access to add its products an services on their site or on various social
platform. The legal environment helps in knowing the government policies on which Morrison
have to function otherwise they can face punishment or huge fines. Demographic factors render a
chance to focus on a particular age group of individuals. The natural environment which include
geographical and ecological environment have capacity to alter business strategies and plans,
thus respective company are suggested to flow green agenda and more CSR policies for lowering
negative effect on environment and attract large number of population. The strengths,
weaknesses, opportunities and threats of Morrison are analysed which further help company in
making new guidelines and long term goals.
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REFERENCES
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