Impact of Business Environment Doc

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Business Environment
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Illustration of theory of demand and supply in energy sector with price elasticity theory.........1TASK 2............................................................................................................................................4Meaning of fracking and stakeholder theory.............................................................................4TASK 3............................................................................................................................................8Pestle analysis to measure macro- environmental factors...........................................................8TASK 4............................................................................................................................................9CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONBusiness environment means the internal and external factors which affects overallbusiness operations in organisations. Such factors of the organisation includes employees,customers, management, supply and demand regulations of the business. This present report willcover demand and supply theory within the energy sector with price elasticity theory. Further, inthis report stakeholder theory is to be defined and its applicability in energy sector and definitionof the term fracking for the development of fracking within stakeholders group is to bediscussed. Further, in this report PESTLE model and Carroll's model is to be discussed. Lastly,in this report challenges which faced by businesses and its impact on global environmental is tobe analysed. Chosen organisation for last part of this report is National Grid Plc. For betterillustrating of this report diagram presentation is also to be provided.TASK 1Illustration of theory of demand and supply in energy sector with price elasticity theoryTheory of demand and supply determines forces which is for the allocation of resources.Supply and demand in the economics is the most fundamental concepts which is known to be thebackbone of economy of the market (Ruttan and Thirtle, 2014). Demand refers to the amount ofquantity of products and services which is preferred by the desired customers of business market.Demand is also known for the relationship between price and quantity demanded. Quantitysupplied of business market refers to the amount of goods which is produced by the companyand for that company willing to supply goods after receiving certain price. Therefore, supplyrelationship of the market is known for correlation ship between price and the amount of goodsand services supplied in business market. Therefore, supply and demand focuses on the properallocation of goods and services in business market. Theory of law of demand and theory of lawof supply is as follows-law of demand within the energy sector1
According to law of demand other factors remains constant, and price and quantitydemand of goods and services are inversely related to each other. It means that when priceincreases, demand of the product goes down in business market (Law Of Demand,2018). Insimple terms it means that if there is higher price of goods then people will less likely for thedemand of that goods.With reference to energy sector that is National Grid Plc, which has large energy users inUK. Company encouraging people for either increase their demand or to start reducinggeneration. According to this encouragement there is high renewable output and law nationaldemand for energy sectors. It is also to be analysed that demand for electricity has beenincreased in recent times because high heat environment, delayed monsoons across all thenations. Reason for this sharp increase in demand of electricity is mainly from domestic sectors.According to recent survey usage of electricity from last 30 years is mainly increasing.Therefore, if price of electricity increases, demand will not decrease as it is used in every sectorof the society (Friedman, 2017).There are mainly two aspects for electricity which are Income drivers and price drivers.Income drivers will consider macroeconomic factors such as gross domestic product, growth indisposable incomes, populations growth, living per capita income etc. Price drivers of electricitywill consider level of price of electricity and other energy sources.Law of supply within the energy sector2Illustration1: law of demand(source: Law Of Demand, 2018)
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