Challenges and Role of UK Government in Supporting SMEs during Covid-19

This report discusses the challenges faced by SMEs in the UK during Covid-19, including lack of IT infrastructure, financial resources, support, and legal compliance. It also examines the role of the UK government in supporting SMEs through schemes like the Coronavirus employee retention scheme and Covid-19 corporate financing facility. The second part of the report analyses the financial and global business environment and its impact on Virgin Money, a UK-based banking and financial services company.

Business environment

Table of Contents
Part-1................................................................................................................................................3
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Challenges affecting the internal factors of SME,s of United Kingdom................................3
Examine the role of the UK government in supporting the SMEs during the Covid-19.......6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
Part-2................................................................................................................................................9
Task..................................................................................................................................................9
Examine the economic environment...................................................................................9
Examine the global business environment and its influence on countries....................12
Conclusion.....................................................................................................................................13
REFERENCES..............................................................................................................................15

Part-1
INTRODUCTION
Business environment is related to the combination of all the factors of the business
which impacts the business of the organisation from both internally and externally. There are
large number of internal and external factors are present in the market which can impacts the
business in both positive and negative manner. The external factors affecting the business are
political, environmental, social, technological and many more. The internal factors are culture of
the organisation, power and management of the organisation. All these factors are very important
for the company and it becomes the duty of the managers of the organisation to analyse these
factors and try to state them in their control. There are large number of small and medium
businesses are exist in United kingdom which has great role for the expansion of the economy.
This report states description related to the impacts of internal environment on the businesses of
United Kingdom. The SME's of United kingdom has faced different types of challenges at the
time of covid so this report provides brief discussion related to the contribution of the UK
government are provided in this report which are very helpful for the company.
TASK
Challenges affecting the internal factors of SME,s of United Kingdom
Covid pandemic is regarded as the blunder for the organisation. The covid pandemic has affected
the business structure of the organisation in negative manner. At the time of covid, the
government of the respected states has ordered to close all the business operations apart from the
necessities. The businesses of the organisation has shut for the long time which decreases the
level of liquidity in the market and it also impacts the profit margins of the organisation in
negative manner. Covid pandemic has disables all the functions of the business and makes them
disables to operate their business in effective manner (Mitra and Gaur, 2020). There are many
businesses are present in the market which are having negative factors of the covid and makes
them disables to operate their business. These companies has shut their businesses which creates
many problems in the market. There are many problems are created by these situations in the
market which becomes impossible for them to operate their business in effective manner. One of
the most biggest problem created by the covid pandemic in the market is to promote the level of
unemployment in the market. The level of unemployment are increase by the huge number at the

time of pandemic because there were many companies are present in the market whose
businesses becomes closes so that they fire the employees due to the weak financial positions of
the company. This creates mess in the market and makes them able to increase the crime rate in
the market (Ng, 2019). There are some companies are present in the market which can operate
their the financial resources at the time of covid pandemic. The main reason for the stability in
these companies is the strong financial position of the company which enables the company to
operate their business in effective manner. There are large number of SME's are present in the
market of United Kingdom which are facing stiff challenges due to the covid pandemic and the
brief discussion related to these challenges in relation to the impact on internal factors are given
below:
One of the biggest challenge faced by the SME's of United Kingdom is that the
management of these organisation does not contains specialised and skilled Information
technology teams which makes them less competitive in the market and demotes the internal
factors of the company. At this time there are many new and advanced technologies are
developed in the market which can make the processes of business more effective and efficient.
The management of these SME's are not able to applied and used these technologies in their
organisations because due to the lack of financial resources. All the technologies present in the
market has high cost which is not possible for the SME's because of their limited scope of the
business and small budgets. It is very important for the management of the organisation that they
focuses on these issues which makes the organisation more competitive in the market. The
unavailability of the Information technology structure in the organisation makes the organisation
to faced different types of issues in the market and makes them able to persue the information in
effective manner. One of the problem which the company has faced due to the lack of IT is
network failures which creates mess in the organisation and it becomes not possible for the work.
It is not possible for the organisation to become updated because of the lack of IT team in the
organisation (Mardones and Brevis, 2021). It is not possible for them to operate their business in
these conditions of the market. It is very important for the management of the organisation to
develop cloud services in the organisation so that it becomes possible for them to operate their
business in effective manner.
The another great challenge which the SME's of the United Kingdom is the lack of
budget or the financial resources in these organisations. The scope of business operations of

these SME's are very short and it contains small number of employees in the organisation. It
disables the organisation to increase the level of production in the organisation and their budget
becomes not so strong. The requirement of the technologies such as cloud services and many
more are very high in the organisation which is not possible for some companies to acquire in the
market (Ribeiro, 2020). It is not possible for the organisation to perform their business functions
in effective manner if their financial resources are not up to the mark. It is very important for the
organisation to acquire new and advance technology so that it becomes possible for them to take
the advantage of the new and it becomes possible for them to operate their business in effective
manner. These challenges are very negative for the management of the organisation.
It is one of the most negative challenge which the management of the SME's has to
faced in the market is that the level of support are less in these type of companies both internally
and externally. The lack of support has created many problem for these organisations in the
market. If any mistake are done by the management of the organisation then there is no one to
make them improve. These small mistakes of the management can becomes the wicked problems
for the company if they does not solve at considerable time. There are many challenges are
occurred in the organisation which is not possible for the management of the SME's to solve
due to the lack of knowledge and the skills so it requires experience but the lack of support from
the market can create extensive problems in the organisation (King, 2022). If the management of
the organisation has get the support from the market then it becomes possible for them to
develop effective information technology in the organisation which helps the organisation to
become more competitive in the market. It is one of the effective recommendation to the
management of the organisation that they develop effective and healthy relations in the
organisation which enables the organisation get effective support from the market at the time of
problem in the organisation.
One of the greatest challenge which the management of the SME's has to faced while
doing their business in the market of United kingdom is to maintain the collaboration in their
workforce. It is one of the most important and valuable function of the management of the
organisation that they develop effective collaboration in their employees so that goals and
objectives of the organisation can be achieved in the market. Effective collaborations in the
employees can only be done due to the development of effective communication in the
organisation. The effective communication enables to promote the employee interaction in the

organisation which makes the organisation more effective. There are many problems and issues
are obtained in the organisation which requires the discussion of the employees, the effective
communication of the organisation has enables all the employees to operate their business in
effective manner. It is very important for the management of the organisation to make control in
these communication channels because the fear of spreading rumours in the organisation which
becomes the reason for the negativity in the organisation.
It is one of the important challenge for the company for the management of the
organisation that there are large number of legal compliances are present in the market which are
having too many paper work and also the proceeding in the market. It is very important for the
management of the organisation to develop effective strategies in the organisation which can
solve this problem. The government of the United Kingdom are always try to reduce the level of
complexities from the management which becomes helpful for them to increase the level of the
business in the country. There are some legal proceedings are present which the management of
the organisation has to follow while doing their business in the market (Bose, Dong and
Simpson, 2019). These legal proceedings are very negative for the management of the
organisation which makes the organisation less effective towards their core business because the
performance of the legal proceedings has taken the more time which disables the management to
operate their business I effective manner. One of the biggest regulation which the SME's has to
manage along with their business in the market which is General data protection regulation. In
this type of regulation the management of the organisation has to consider the protection and the
security of the data of the customers.
Examine the role of the UK government in supporting the SMEs during the Covid-19
The government of United kingdom is one of the most reputed government which always
focuses on the promotion of business in the country so that the economy of the country can be
taken effectively in the market. It also helps the management of the organisation to operate their
business in effective manner. There are large number of challenges and problems are arises in the
business environment of the country which disables the SME's to operate their business in
effective manner. The government of United Kingdom has analyse the impact of the covid
pandemic on the businesses of the SME's and developed large number of scheme for the
promotion of the business in the organisation. It is very important for the management of the
organisation that they analyse these schemes of the government and try to take their advantage in

the market. It also helps the other businesses of the country to improve the condition of their
businesses which is ruined due to the happening of the covid pandemic. The brief discussion
related to the schemes of government are given below.
 Coronavirus employee retention scheme :- It is related to those scheme of the
government under which all the employer of United Kingdom registered under the PAYE
scheme are entitled to received the claim of 80% of furlough employees of the
organisation (Aluko and Adeyeye, 2020).
 Covid-19 corporate financing facility :- it is related to those scheme of the government
under which the government of the United kingdom has provided the facilities of the
finance to the SME's of the organisation. It helps those organisation of the United
kingdom which are financial crunches in their business due to the covid pandemic.
CONCLUSION
This report concludes description related to the impacts of internal environment on the
businesses of United Kingdom. The SME's of United kingdom has faced different types of
challenges at the time of covid so this report concludes brief discussion related to the
contribution of the UK government are provided in this report which are very helpful for the
company are concluded in this report.

REFERENCES
Books and Journals
Aluko, O.A. and Adeyeye, P.O., 2020. Imports and economic growth in Africa: Testing for
granger causality in the frequency domain. The Journal of International Trade &
Economic Development, 29(7), pp.850-864.
Bose, S., Dong, G. and Simpson, A., 2019. The financial ecosystem. In The financial
ecosystem (pp. 19-46). Palgrave Macmillan, Cham.
King, J.E., 2022. Post Keynesian economics. In Handbook of Alternative Theories of Political
Economy (pp. 83-95). Edward Elgar Publishing.
Mardones, C. and Brevis, C., 2021. Constructing a SAMEA to analyze energy and
environmental policies in Chile. Economic Systems Research, 33(4), pp.576-602.
Mitra, A. and Gaur, S.S., 2020. Does environmental concern drive Asian firms’
governance?. Journal of Asia Business Studies.
Ng, C.F., 2019. A video game to supplement a hybrid principles of microeconomics course. The
Journal of Economic Education, 50(1), pp.44-56.
Patwa, N. and Seetharaman, A., 2019. Redesigning Fashion Industry: A Transformational
Circular Approach. Journal of Applied Business & Economics, 21(8).
Ribeiro, M.B., 2020. Income distribution dynamics of economic systems: an econophysical
approach. Cambridge University Press.

Part-2
INTRODUCTION
Business surroundings defines an aggregation of all inner and outside elements that
consists of client desires and preferences, suppliers, employees, deliver and demand, interference
of government, social trends, monetary changes, innovation in generation and plenty of more.
These elements exceedingly have an impact on the enterprise sports and operations in an
instantaneous or tilted manner. Analysing enterprise surroundings helps in acknowledging the
enterprise opportunities, assists in planning, tapping beneficiary resources, improves the general
performance, profitability and boom of the enterprise. The modern-day venture is primarily
based totally on a case examine of Virgin Money. This is a banking and economic provider
enterprise that is running in United Kingdom. In 1995, it turned into based through Richard
Branson. It has improved its enterprise features and sports during the world. It turned into
introduced the plans to turn out to be a retail bank. With the assist of the subsequent case
examine, the modern-day venture will take a look at the monetary surroundings in addition to
worldwide enterprise surroundings and there have an impact on nations with an emphasis at the
UK.
Task
Examine the economic environment
The time period monetary surroundings may be described as all of the outside elements
of financial system that impacts the clients and agencies shopping for behaviour, and therefore,
have an effect on the general overall performance of enterprise. There isn't anything which
manipulate over all such elements and they will be both macro and micro scale. In addition to
Virgin Money, there are numerous elements that have an effect on the monetary surroundings.
Some of them are mentioned below:
Demand: It suggests that the call for of product rises and consequences in greater
income for the agencies while a fall in call for can bring about large losses for the
companies. In context to Virgin Money, the enterprise makes use of many techniques to
growth their product and offerings call for with inside the marketplace inclusive of they
offer credit score and pay as you go cards, journey insurance, automobile insurance,

lifestyles insurance, domestic insurance, pension merchandise, financial savings
merchandise and plenty of extra.
Market size: The earnings margin of the enterprise could be low if it has a small length
of marketplace. The marketplace length means that the whole variety of angle customers
in a marketplace. In addition to respective agency, it has a international enterprise
operations wherein many nations are exploited to growth their purchaser base and
enhance their marketplace size.
Income: Income defines as the whole incomes of someone or a whole family. It
especially impacts the shopping for behaviour of the clients and for this reason impacts
the industrial companies. There is a right away courting among purchaser spending
strength and their earnings. For example, the character with constrained earnings has a
tendency to buy simplest services and products which can be critical for residing and do
now no longer want to spend plenty cash on steeply-priced or leisure items. In addition to
Virgin Money, the enterprise affords centres to all forms of their clients and relies upon at
the consumers’ length of earnings the enterprise affords mortgage centres accordingly.
Unemployment level: It is any other element which impacts monetary surroundings.
The nations which has excessive fee of unemployment have a weaker monetary
surroundings. If maximum of the humans will now no longer make cash then they'll now
no longer have enough earnings to spend on shopping services and products. This
develops a excessive monetary cycle with inside the nation. For example, if populace will
now no longer buy then agency will now no longer recruit people for the cause to lessen
fee and if companies do now no longer offer jobs or employment then the fee of
unemployment will concurrently growth. In context of Virgin Money, its miles diagnosed
that the financial institution affords and creates some of employment to the humans in
UK, which can provide of favourable effect at the spending strength of population.
Economic Market Structure
It defined from this section that how different types of industries are differentiated and divided in
the market and this division of the industries are based on the nature and the size of the business.
The level of competition in the market has played important role in the distinction of the
organisation in the market (Uluskan and Godfrey, 2018). It depends upon the different types of

features which are impactful on the behaviour of the organisation. The brief discussions related
to the differentiation of the market in relation to the virgin money are given below:
 Perfect competition: It is related to those situation of the market under which there are
large number of small organisations are present in the market which creates competition
between them. These companies of the market has sell similar product in the market
which are homogeneous in nature (Nikitina and Lapiņa, 2019). It is one of the important
feature of this market condition that the companies are free to enter and exit in these type
of market conditions and the company does not have influence over the prices of the
products. The customers of the company have full knowledge and information of the
market and the prices of the product.
 Monopolistic competition: This condition of the market is also called imperfect market
because it contains the features of both the markets such as competitive and monopoly
market. In this type of the market condition the level of competition between the sellers
are very high. The differentiations of the product in this condition of the market are done
on the basis of the quality and the branding of the product.
 Oligopoly market: It is one of those condition of the market under which the there is
only few sellers are present in the market and the level of their business are very high.
They sell distinguished or indistinguishable products. The level of competition are very
low in this type of market condition due to the lack of more companies or the sellers.
 Monopoly: It is one of those competitions of the market under which there is only one
seller are present in the market. The sole seller of the market has full authority over the
market and the resources. The prices of the product are set by them according to their
will. The government of the state has provided the license for the same.
It is set from the other standards that the management of Virgin money has chosen the structure
of oligopoly so that their business can be made effectively in the market. It is one of biggest
companies of the world which has operated their business in those market conditions under
which only few numbers of suppliers are operated their business. The management of the
company operated their business in those countries where only Broken Trust, FDC Trust,
Horizon Bankcorp has operate.

Examine the global business environment and its influence on countries
The global business environment defines the term in which world-wide environmental
factors are beyond the control or scope of any country or community. It is essential to know and
understand the impact of all external factors of macro environment as it has impact on company's
decision-making process on the utilization of resources, along with capabilities (Nam and Bao
Tram, 2021). In addition to Virgin Money, influences of global business environment will be
understood with the certain framework that is pestle in context to UK (Al Omoush, Al-Qirem
and Al Hawatmah, 2018). Examining all those factors will help in knowing threat and
opportunities involved in that.
PESTLE analysis of Virgin Money
It is related to those framework of the strategic management which helps the organisation to
evaluate the impact of different external factors on the business of the organisation. It is very
important for the management of the organisation to evaluate all the factors in effective way so
that it becomes positive for the management of the organisation. The brief discussion related to
all the factors of the analyses in relation to Virgin Money are given below:
 Political factors: It is related to those factor of the PESTLE analyse which deals with the
impact of political issues and the policies on the business of the organisation. The factors
such as, regulatory practices taxation policies political ideology and, government bodies
of the government, stability of political, of the country, influential political leaders and
their ideas. Brexit is one of the biggest policy of the government which negatively the
business of Virgin Money.
 Economic factors: There are many economic factors are present in the market such as
economic growth, inflation rates, unemployment and many more which impacts the
business of the organisation are discussed in this factor of the PESTLE analyses
(Gogokhia and Berulava, 2021). It is proved by the examples that the spending power of
the buyer are indicated by their unemployment rates so if the buyers of the market are
having effective employment then their purchasing power can be increase which become
beneficial for the whole market. The management of the Virgin money has supported the
employment opportunities in the market.
 Social factors: it is related to the impact of the social belief and the tradition of the area
on the business of the organisation. It involves the factors such as state and influence of

the media, lifestyle trends, demographics of the market, cultural and religious factors,
consumer spending power many more. It is very important for the management of the
organisation that they develop effective and valuable approach in the market which
promotes the social factors so that all the customers becomes loyal towards the
organisation.
 Technology factors: It is related to those factors of the PESTLE analyses which reflects
the impact of different types of new and advance technology on the business of the
organisation (Betti and Sarens, 2020). This section involves the changes in new
innovations maturity of technology, new production technology, patents, intellectual
property copyrights, and many more, manufacturing technology and many more. These
work include online customers services, online payment, telecommunications enhancing
and many more
 Legal factors: It refers to those factor of the PESTLE analyses which is related to the
impact of legal rules and regulations on the business of the organisation. These factors
include environment laws, health and safety guidelines and regulations, international
trade agreements, business laws and many more. It is very important for the management
of Virgin Money to follow these rules and regulations.
 Environmental factors: It is related to those factors which provides the information of
the impacts of different types of environmental factors on the business of the
organisation. These factors are safe waste disposal, insurance policy, consumption
energy power and environmental issues dealing with risky substantial and many more.
The management of the Virgin money has gained the fame and the name due to their
positive environmental approach.
Conclusion
It is concluded from this report that the environment of the business is one of the important and
valuable factor which the management of the organisation has to consider if they want to become
success in the market. From this project, it has been concluded that business environment
involves several internal and external factors which impacts the business organization in both
negative and positive manners. It is very much important to analyze all those factors with the

certain frameworks or models that demonstrate an organization how to make plans to overcome
threats and grab opportunities involved in such factors.

REFERENCES
Books and Journals
Betti, N. and Sarens, G., 2020. Understanding the internal audit function in a digitalised business
environment. Journal of Accounting & Organizational Change.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling, 78, pp.275-292.
Gogokhia, T. and Berulava, G., 2021. Business environment reforms, innovation and firm
productivity in transition economies. Eurasian Business Review, 11(2), pp.221-245.
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Nam, V.H. and Bao Tram, H., 2021. Business environment and innovation persistence: The case
of small-and medium-sized enterprises in Vietnam. Economics of Innovation and New
Technology, 30(3), pp.239-261.
Nikitina, T. and Lapiņa, I., 2019. Creating and managing knowledge towards managerial
competence development in contemporary business environment. Knowledge
Management Research & Practice, 17(1), pp.96-107.
Nudurupati, S.S., Garengo, P. and Bititci, U.S., 2021. Impact of the changing business
environment on performance measurement and management practices. International
Journal of Production Economics, 232, p.107942.
Uluskan, M. and Godfrey, A.B., 2018. Business environment-supply chain framework and
benchmarking supply chain structures: Haiti versus China. Benchmarking: An
International Journal.
Yaklai, P., Suwunnamek, O. and Srinuan, C., 2018. How Intellectual Capital, Knowledge
Management, and the Business Environment Affect Thailand's Food Industry
Innovation. Asia-Pacific Social Science Review, 18(2).