Market Share and Business Profitability

This assignment investigates the connection between high market share and profitability within the context of business simulations. It explores various factors influencing this relationship, drawing on research from diverse fields like economics, management, and consumer behavior. The analysis considers the impact of a competitive global business environment and examines relevant legal and ethical considerations.

BUSINESS ENVIRONMENT
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Table of Contents
Introduction..........................................................................................................................................3
Task 1....................................................................................................................................................3
1.1 Identify the purposes of different types of organizations..........................................................3
1.2 Explaining the level to which organization meets the objectives of its various stakeholders...4
1.3 Responsibilities of organization and strategies to complete them.............................................4
Task 2....................................................................................................................................................5
2.1 Describing the economic systems that attempt to allocate the resources effectively................5
2.2 Assess the effect of fiscal and monetary policy on Iceland Supermarket and their actions......6
2.3 Evaluate the effect of rival policies as well as other regulatory mechanism on the activities of
firm...................................................................................................................................................6
Task 3....................................................................................................................................................7
3.1 Explain how market structures measures the pricing and output decisions of retail
organisation......................................................................................................................................7
3.2 Explain the way in which market forces shape Iceland Supermarket responses using a range
of examples......................................................................................................................................7
3.3 Measure how the business and cultural environments shape the behaviour of corporation......8
Task 4....................................................................................................................................................8
4.1 Explain the significance of international trade to Iceland Supermarket....................................8
4.2 Determine the effect of global factors on Iceland Supermarket...............................................8
4.3 Evaluate the impact of policies of the European Union on Iceland Supermarket.....................9
Conclusion............................................................................................................................................9
References..........................................................................................................................................10
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INTRODUCTION
Business environment is the mixture of intrinsic and extrinsic factors which impact the
business aspects like market growth, sales and purchase in the nation. It is an important process to
take any type of decision for running the business of organization (Botha, Kourie and Snyman,
2014). Iceland supermarket is a retail corporation which provides effective commodities to its
clients in United Kingdom and Ireland. The present file describes classification of types of firm in
the nation with their purposes. It also introduces various responsibilities of enterprise for employees
in the country. It defines economic system of Britain as well. Apart from that, it also explains the
effect of competition policy and other regulatory mechanisms on company. Last but not the least;
report presents the pricing and output decisions of various market structures in United Kingdom
along with stating the global factors for Ice-land supermarket.
TASK 1
1.1 Identify the purposes of different types of organizations
Every kind of firm has a different purpose which depends on the nature of its business in
United Kingdom.
 Private Organization- This type of organization does not contain any government in the
country. Main objective of this firm is to generate profits rather than serving public in the
nation. For example, Ice land Supermarket and KFC are the best examples of private
companies in UK.
 Public organization- In this type of firm, stake of government is higher than private
authorities in the nation. The purpose of this organization is to serve people and to earn
higher income by giving equal importance on both factors in the nation (Hamilton and
Webster, 2015). For example, British Airways is a good example of public enterprise in
United Kingdom.
 Government Firms- It contains pure government structure in the nation. These organizations
are made for public service in the country (Wetherly and Otter, 2014). For example,
Transport for London is a government firm which provides optimistic service to all citizens
of London. Then after, organization earns profit in UK.
 Non government organization- These organizations give more concentration for public
service like health and social service in UK. For example, Cancer research firm is the best
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example of NGO which serves cancer patients free of cost in the nation (Bah and Fang,
2015).
Purpose of Ice- land supermarket
 Vision- The vision of Ice-land super market is to become the leading retailer company by
providing appropriate products and services in the world.
 Mission- Mission of Ice land super market is to enhance the quality of products and services
for all types of consumers to get top rank in the United Kingdom.
The main purpose of organisation is to sell genuine retail products to consumers.
Corporation also provides effective service after sales of products so as to maintain good
relationship with their customers. In addition to this, organisation want to increase its profit and
market share in the retail sector of UK. Ice land supermarket also understand requirement of
customers in order to complete them (Kindsfaterienė and Lukaševičius, 2015).
Objectives:
 To enhance of presence of Iceland supermarket by expanding its global operations s in
many countries.
 To achieve higher profits by making effective strategies for increasing the sales.
 To become good firm by providing the customers satisfaction and rendering effective
services in the nation.
 To conduct effective CSR activities for people to improve the market image in United
Kingdom.
Purpose of KFC organisation
Aim of KFC is to earn effective profit by providing quality fast food to the consumers in
United Kingdom. Further, corporation also designs new products and services after understanding
needs of various customers in the nation (Solomon and et.al., 2014).
1.2 Explaining the level to which organization meets the objectives of its various stakeholders
Ice land supermarket applies many efforts to meet the objectives of stakeholders in the
nation. There are many associates like consumers, employees, shareholders, creditors, suppliers and
government of this organization in the nation (Kerr and Perdikis, 2014). Corporation also tries to
fulfil the objectives of them in United Kingdom. Generally, Ice land supermarket uses customer
relationship management (CRM) for providing effective services to consumers. This tool also helps
the firm to solve the complaints and queries of customers. This process also helps in understanding
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the requirement of consumers in the nation. Along with that, organization provides effective
working environment to employees and managers. Management of corporation arrange meeting
with staff members in order to know the their needs. They also try to complete all feasible needs of
employees in Ice land super market. This thing also aids organisation to increase their output in the
nation. Management of enterprise also provides timely dividend and interest to its shareholders to
attain its objectives in United Kingdom. This process also helps the firm to create a good image in
the minds of investors in the country (Doh, McGuire and Ozaki, 2015). Organization also tries to
manage effective relationship with suppliers in the nation. Management of Ice land supermarket
conducts regular meetings with vendors to solve various types of issues which are occurring in
transactions. Organization pay all due payments of its suppliers in order to make better relationship
with them in retail market. In addition to this, Corporation also meets with government authorities
to know about new taxes and tariffs in United Kingdom. Ice-land supermarket also pays all taxes of
government to make a positive image in front of authorities and to achieve its objectives in nation.
1.3 Responsibilities of organization and strategies to complete them
There are many responsibilities of Ice land supermarket in United Kingdom. Organization
applies many efforts to complete them for its stakeholders in the nation. Corporation also makes
effective strategies to fulfil them in the country (Strumickas and Valanciene, 2015). For example,
organization implements many policies to fulfil the needs and requirements of employees in United
Kingdom. As per the organizational responsibility, management of Ice land supermarket also tries to
solve the conflict of employees with the help of meeting process. Power influence matrix is a
stakeholder analysis tool. This approach also aids Ice land supermarket to find out the nature of its
staff members. Enterprise also uses many schemes and policies to satisfy its stakeholders in UK.
Management of Ice land supermarket also manages regular public meeting and charity functions for
its associates and public in the nation (Wild, Wild and Han, 2014). This process also helps the firm
to make appropriate image and to solve their queries in the mid of stakeholders in United Kingdom.
Organization also uses health and safety rules for its staff members as a security in the country.
Corporation also provides effective salaries, promotion, bonus and medical insurance for its
employees to fulfil its responsibilities in the nation. Management of Ice land supermarket also
follows the corporate social responsibilities (CSR) activities to maintain environment of UK
(Solomon and et.al., 2014). In this way, organization is using many strategies to accomplish its
responsibilities in United Kingdom.
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TASK 2
2.1 Describing the economic systems that attempt to allocate the resources effectively
There are many economic systems which contribute an effective role to allocate the
resources in United Kingdom. These are explained as follows:
 Command economy system- In this process, Government allocates all resources to various
types of corporations to manage its operations in the nation. Generally, organization also
registers its name to take appropriate resources in the nation. For example, Ice-land
supermarket takes permission to use this type of facility in UK (Sinay, 2014). As per the
availability, Government allocates its resources to the organization in the state.
 Free enterprise- In this approach, resources are allocated by the group of enterprises in
United Kingdom. Generally, many organizations make board to allocate the services in
nation. Government of UK does not play any kind of role in this matter. For example, Ice-
land supermarket registers its name to take these services in the nation. As per the
requirement, this board allocates these resources to the organization to handle its retail
operations in United Kingdom.
 Mixed economic system- In this system, government and all companies develops one
combined board to allocate the resources to all organizations in UK. For example, Ice-land
supermarket sends its request to take various types of services in the nation (Dinu, 2014). As
per the convenience, this mixed board allocates all resources to organization for handing its
business activities in the United Kingdom. In this way, organization can allocate these
services and facilities to all kinds of organizations in the nation.
2.2 Assess the effect of fiscal and monetary policy on Iceland Supermarket and their actions
There are many impacts which affect the Ice-land supermarket and its activities in the
United Kingdom.
 Effect of Financial policies- Modification in financial regulations are generated so various
complexities for firm. These rules increase taxes and tariffs such as income tax and Value
added tax (VAT) in the United Kingdom. These things also decrease main net earnings of
Ice- land organisation in the nation (Carroll and Buchholtz, 2014). Complex financial
polices create issues to execute any kind of business activities and plans in United Kingdom.
Further, they also obligate the firm to enhance prise of retail products for customers in the
country. Fiscal policies enhance many expenses like documentation and new taxes of firm
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in the nation. In addition to this, they also increase work load on managers and staff
members of Ice- land organisation (Kindsfaterienė and Lukaševičius, 2015).
 Effect of monetary policies- Changes in monetary rules also rise inflation rate in the nation.
In addition to this, it reduces selling of retail products of Ice-land supermarket due to its
higher prices. These effects also reduce earning of citizens in United Kingdom. As a result.
It produces adverse impact on demand and supply of raw material in the nation. These
things also decrease market growth of retail industry in the UK. (Cavusgil and et.al., 2014).
Management of Ice- land organisation reduces its profits due to lower selling of its retail of
products.
2.3 Evaluate the effect of rival policies as well as other regulatory mechanism on the activities of
firm
Effect of competition policies and other regulatory mechanisms on the activities of firm is
very high in the nation. In retail sector of UK, competition of UK oblige the Ice land supermarket to
use market penetration pricing. Its rivals organisations are giving many efforts to increase market
share in the United Kingdom. This process affect its business in the nation. On the other side,
Competition Act 1998, Enterprise Act 2002, Competition Commission and Office of Fair Trading is
also help the firm to control over the competition by applying these rules and regulations in the
nation (Rao, Krishna and Rao, 2014). These act also compel the all firms to use fair policies and
rules for increasing its sales growth.
Effect of legal and other regulatory policies also enhances of expenses by changing fiscal
policies, inflation rate and reducing revenues of Ice land supermarket in the United Kingdom. This
process obliges the firm to change the business strategies in the retail market. On the contrary note,
Companies Acts, industrial policy, enterprise training and skill policy also contribute effective role
for the organisation to make new plan and strategies as per changed legal and other regulatory
policies in the United Kingdom.
TASK 3
3.1 Explain how market structures measures the pricing and output decisions of retail organisation
There are many types of market structures which affect the pricing and output decision of
Ice-land of corporation. Generally retail sectors follows perfect competition market structures in the
nation.
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In the perfect competition, pricing of retail products is based on market oriented pricing.
This process also increases the sales of organisation. For example, Ice land super of enterprise
develops its strategies as per its market structures to increase its sales (Samat and Ali, 2015). This
process also rise demand of retail products in the nation. All income class spend appropriate money
to take various types of retail commodities as comparison of other market structure in the United
Kingdom.
In the Oligopoly market structure, Ice-land and some other supermarket chain pricing can be
higher of its retail products as compare to perfect market competition in the United Kingdom. For
example, This thing affect sales of premium commodities of firm due to higher pricing in the
nation (Keršienė and Savanevičienė, 2015). This way, Ice-land and other firms can generate more
profit due to few firms in the market.
In the Monopoly market structures, Only one organisation can sell retail products in the
nation. For example, Ice land supermarket can fix its pricing of retail products. Organisation can
earn more income as comparison both market structures. This process also decrease selling
premium products in the nation (Prakash and et.al ., 2014).
3.2 Explain the way in which market forces shape Iceland Supermarket responses using a range of
examples
There are many market forces which shapes organisation responses in the nation. Supply and
demand product, elasticity of supply and demand are main factors which affect consumer
perception and pricing decisions in the nation. For example, Generally, if supply is higher than
demand then product price will be less. If demand is higher than supply then Ice-land will get
effective benefits by increasing prices of products in the United Kingdom. This process affect
organisation to sell products at higher price for consumers in the nation. Elasticity of demand
determines how responsive demand is to alter price of retail products in the nation. In addition,
elasticity of supply measure the responsive supply of product is to modify the cost of commodities
in the country. These market forces also oblige the Ice land supermarket to make its policies as
response (Price elasticity of supply, 2015). These thing also affects consumer perception regarding
purchasing of commodities in the United Kingdom. This process also affects the pricing decision as
per demand and supply of retail products in the nation.
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3.3 Measure how the business and cultural environments shape the behaviour of corporation
There are many business and cultural environments factors which impact the behaviour of
Ice land supermarket in the United Kingdom. In the economy aspects, inflation rate also oblige the
firm to increase the cost of retail products in the nation. In the political factors, taxes and tariffs also
affect the income of organisation in the UK (Makos, 2015). This way, organisation make its policies
to achieve income in the nation. Social and cultural factors also affect business activities of the Ice
land supermarket. As per latest trend and lifestyle of people, organisation purchases its raw material
in the nation. This process also gives effective advantages to earn effective revenue by increasing
sales in the retail market. In the technological aspect, effective technological infrastructure also
helps the Iceland supermarket to promote its retail products in the market. This aspects aids the firm
to increase sales in the firm (Kindsfaterienė and Lukaševičius, 2015). Legal factors also oblige the
organisation to follow many legal rules like the health and security regulation for employees in the
nation. This process increases the expenses of Ice land supermarket.
TASK 4
4.1 Explain the significance of international trade to Iceland Supermarket
There are many significance of international trade to Ice-land supermarket. This process can
also help the firm to increase the business activities in many nations. For example, these trades can
provide many opportunities for organisation to enter global markets. Firm can expand its business
into the BRIC countries to increase its sales. This way, Iceland supermarket can increase its
presence many nations (Wetherly and Otter, 2014). It can increase market share in these countries.
Management of corporation can also increase its brand identity which can provide optimistic
benefits in many nations. In addition, Company can earn more profit in a global retail sector. On
the other side, enterprise has to aware about their culture, rules, regulations, competition and other
factors of BRIC countries to get appropriate success. Further, Ice land supermarket can take help of
world trade organisation to enter in global countries. Other wise, company can get loss in these
nations.
4.2 Determine the effect of global factors on Iceland Supermarket
There are many impacts of international factors on the Iceland Supermarket. These aspects
also helps the firm to increase the business in many global countries. This process also leaves
optimistic effect on the organisation (Solomon and et.al., 2014). Further, company earns more profit
by expanding its branches in many nations. Global factors create better impact for Iceland
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supermarket to increase its sales and market growth by providing effective services and retail
products to consumers in the different countries (Solomon and et.al., 2014). These international
factors also provide better opportunities for employees to learn new things in another nations. They
also give good experience to employees regarding global market which produces optimistic impact
to develop new strategies and plans for expansion of firm in the world. However, global factors also
increase various type of risk regarding investment of monetary funds which create bad effect on the
ice land supermarket in various countries (Sinay, 2014). In addition to this, they also increases
issues of trade and tariff which affect profit of firm in the other nations
4.3 Evaluate the impact of policies of the European Union on Iceland Supermarket.
European policies also creates positive and negative impact on the organisation in the United
Kingdom. This rules also help the firm to make open area. As result, corporation is increasing its
sales retail products in all European countries. These things also giving effective profits to earn in
the market (Dinu, 2014). On the other side, polices of European union also increases so much
competition in the the UK. These things are oblige the firm to invest more money on market
research to know dynamic behaviour of consumer in order to increase the sales in the United
Kingdom. These rules also reduces taxes and tariffs between European countries. This process also
provides huge reliability to increase its operations in these nations. These thing are saving many
expenses of Ice land supermarket in these nations. According to Cavusgil (2014), this rules and
regulations also increases so much work load on the employees of Iceland supermarket. This
process is creating problems to provide optimistic services for consumers in the United Kingdom
(Cavusgil and et.al., 2014).
CONCLUSION
From the report, it is found that mission, vision as well as objectives of Iceland supermarket
contribute effectively to earn appropriate profit in the United Kingdom. Organisation is also helping
its stakeholders through completing its all responsibilities in the nation. Further, fiscal and monetary
policies are affecting the income of Iceland supermarket in the retail sector of UK. In addition,
Perfect market structures is aiding the firm to increase its sales by using market oriented pricing in
the United Kingdom. It can be concluded that impact of European union policies creates positive
effects for firm to create optimistic profit in other zones.
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