Business Environment Impact on Iceland Supermarket Operations

This report provides a comprehensive analysis of the business environment affecting Iceland Supermarket. It begins with an introduction outlining the competitive landscape and the factors influencing organizational operations. Task 1 explores the purposes of different organizations, focusing on Iceland Supermarkets, KFC, Transport for London, and Cancer Research, and assesses how Iceland Supermarket meets stakeholder objectives, including customers, employees, and suppliers. Task 2 delves into different economic systems, the impact of fiscal and monetary policies on Iceland Supermarket, and the influence of competition policy and regulatory mechanisms. Task 3 examines the impact of market structure, market forces, and the business and cultural environment on the supermarket chain. Finally, Task 4 assesses the significance of international trade, the impact of global factors, and the effects of European Union policies on Iceland Supermarket's operations and strategies. The report concludes with a summary of findings and a list of references.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Purposes of different organization........................................................................................1
1.2 The extent to which it meets the objectives of its different stakeholders.............................2
1.3 Organization's various responsibilities and ways to meet them............................................3
TASK 2............................................................................................................................................4
2.1 different types of economic systems.....................................................................................4
2.2 Impact of fiscal and monetary policy....................................................................................4
2.3 Impact of competition policy and other regulatory mechanism on organization..................5
TASK 3............................................................................................................................................6
3.1 Impact of market structure....................................................................................................6
3.2 Impact of market forces........................................................................................................6
3.3 Impact of business and cultural environment........................................................................7
TASK 4............................................................................................................................................7
4.1 the significance of international trade to Iceland Supermarket.............................................7
4.2 the impact of global factors on Iceland Supermarket............................................................8
4.3 Impact of policies of the European Union on Iceland Supermarket.....................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Advancement in technology and turbulence in market has made the degree of competition
for organizations operating in it very fierce and aggressive. It gets influenced by the wide range
of factors both external and internal. External factors refers to those that affects organization's
functioning on wider scale that is government's policies, political structure, economic
environment, technological advancements, social and cultural aspects and legal structure
prevailing in the country Whereas internal factors are those that directly affects its strategy
making such as customer's perception about company's offerings, operational management,
employer-employee relations, production and logistics. Organization works under the influence
of these factors and make policies and strategies accordingly (Björklund, 2011). Report is
prepared to discuss operations of organizations which is adopted by management for its
sustainable growth, profit maximization and higher degree of consolidation with customers. For
the purpose, Iceland supermarket is taken into account. Report throws light on the vision,
mission, objectives and it working.
TASK 1
1.1 Purposes of different organization
Iceland Supermarkets
Iceland supermarkets is a British supermarket chain. Having 1.8% share in UK food
market, it is a privately owned company which sells frozen foods including prepared meals and
vegetables. It has been recognized as fastest growing and most innovative retailers.
Purpose: Private organizations functions to maximize their profits by providing optimum level of
services and quality products. Iceland supermarkets is committed to provide safe healthy and
ethically sourced food (Carroll and Buchholtz, 2014).
KFC
Kentucky fried chicken is the largest fried chicken chain in the world. It is the subsidiary
of an organization Yum brand. Subsidiary are the companies whose 50% stock or more are
owned by another company.
Purpose: KFC functions with the purpose of optimizing its job and making their customer
satisfied by providing them by providing them fast and friendly environment that appeals larger
number of customers.
Transport for London
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Transport for London is government organization which works to manage the transport
services in London and implement effectual strategies for it efficient management. It comes into
the category of statutory organizations. Statutory organizations are complete owned by
Government or sub national Government bodies. It has no shareholders and it entitled to provide
better services to public with no motive of profit generation. This organization Functions to
facilitate countrymen with good transport and safer roads (Chi, Kilduff and Gargeya, 2009).
Cancer Research
Cancer research is an organizations works to research on prevention, diagnosis and
treatment of cancer. It a non profit organization, functions for a philanthropic goal in public
interest and common good. It does not aim for profit generation. There charitable organizations
run by donations, legacies and community support.
1.2 The extent to which it meets the objectives of its different stakeholders
No organisation works in isolation, it functions under the influence of working and
needs of stakeholders. Stakeholders are the people who are attached to the organisation fopr
any interest. Established in 1969 and significant share of 1.8 in UK food market, Iceland
supermarkets is a large family of employees, suppliers and customers (Czinkota and et.al,
2009). Operations and working of organisation is affected by the needs, perceptions and
other attributes of these stakeholders. Along with these external bodies also have great
impact over it such as Government and legislative bodies. Major stakeholders of Iceland
supermarkets are customers, employees, suppliers, government and other legislative bodies.
Customers: Mentioned organisation is known for its personalised and thoughtful services
and the quality products it offer. Customer satisfaction and freshness are the fundamental
goals in their strategy. To satiate the needs and different choices of customers, organisation
has the wide range of products in different categories. It delivers the outstanding customer
service with the distinguished products (Davidavičienė, 2008). It has been known as the
pioneer to eliminate artificial flours and preservatives in products. It offers products that
seals tastes, freshness and nutritional value into it.
Employees: Cited organisation is known for the best place to work in. It understands the
importance of their employees and always make sincere efforts to provide them healthy and
resourceful work culture. Organisation believes that it should be the place for enhancement
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and up-gradation of their skills and capabilities and always caters to create better
opportunities for them. It conduct employee's training programs and development sessions
to give them better exposure and opportunities.
Suppliers: Organisation believe in sourcing food from authentic and licensed place. It deals
in providing the frozen products that is raw vegetables or prepared meals (de Vries, 2012).
To provide the best products to their customers, it is required to be sourced from authentic
suppliers and dealers. An efficient logistic management system is processed by the
management to assure the promptness and freshness.
1.3 Organization's various responsibilities and ways to meet them
Working since 1969, organisation is fulfilling its responsibilities in various aspects
and towards all its stakeholders in the very efficient and effective manner. To analyse the
extent to which it fulfils its responsibilities, carols pyramid model is used. This model helps
it assessing in four aspects such as legal, philanthropic, economic and ethical.
Economical: Iceland supermarkets caters to provide their shareholders the optimum level of
values by earning the maximum profits and benefits. Iceland supermarkets is private
organisation functions to earn maximum revenue generation and widening the gap with
their competitors (Dong and Hou, 2009).
Philanthropic: Along with the profit generation and customer satisfaction, organisation has
been involved into the offering of charitable offerings and programs such as it helps in
Alzheimer's research and Iceland Everest expedition. Apart from this it organises many
community programs.
Legal: Organisation abides all the rules and regulations laid with respect to the maintenance
of hygiene and freshness of the frozen products. Various laws and obligations have been
laid to check the edibility of food (Hill, 2008). Apart from this organisation abides other
laws related to consumer protection, employees related issues to maintain the legality in the
organisation.
Ethical: Organisation functions with certain values and principles on which the working
and operations are laid. Its basic aim is to give outstanding customer services, quality
products by taking care of the health of their customers. Employees are the sole of
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organisation who implement the stated tasks and responsibilities. On ethical grounds as
well it fulfils all the responsibilities.
TASK 2
2.1 different types of economic systems
On the basis of allocation of resources and the division of powers to the organization and
government and other legislative bodies to take decisions about pricing and output making
organizations are categorized in three ways: Command economy: In command economy, major decisions of the organizations are
undertaken by the government and other legislative bodies. Prices and output related
decision making is entitled to Government. Organization has minimum level of control
over these key issues (Honig, 2004). Free market economy: Free market economy is the highly competitive market in which
the pricing and output are decided by the market forces prevailing in the country such as
the demand and supply of their product and services company are offering. Company
functions with the minimum intervention of government in making decisions.
 Mixed economy: Mixed economy is the combination of free market and command
economy. In this system, organizations operating has the power to take decisions with
respect to the pricing and output of their products and services with the certain influence
of Government policies (Hult, Hurley and Knight, 2004). Government impose rules and
regulations for maintaining the legality of operations carried by companies. Iceland
supermarkets falls under the category of organization working in mixed economy. It sells
frozen foods and meals hence, it is supposed to abide the laws and regulations with
respect to maintain the degree of edibility and freshness of vegetables and meals.
2.2 Impact of fiscal and monetary policy
To keep a check on the working of organizations and order their operations, Government
and other legislative bodies functions. Conditions prevailing in the International market
significantly affects the macroeconomic variables in a country (Johnson, Lenartowicz and Apud,
2006). To stabilize the economy from external fluctuations and monitor the internal situation,
different ways are adopted. Two of the most effective ways adopted by central bodies are fiscal
and monetary policies.
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Fiscal policies: fiscal policy is the tool adopted by Government to stabilize the economy of
country by adjusting its spending and taxation. By monitoring changes in stages of business
cycle and influencing aggregate demand, level of economic activity is checked. Its impacts get
trickles down to the functioning and operations of business organization and their strategies.
Iceland supermarkets is specialized in selling loose frozen goods, Government has laid some
rules and regulations to maintain the hygiene and quality of food. Further, when it increases the
taxes and other tariffs on food products, it raises the price floor that directly affects sales and
profitability. On the contrary, when Government increases its spending on supermarkets products
and services in the form of investments, it helps Iceland supermarket to function their operations
with more ease and profitability (Kotler, Bowen and Makens, 2006).
Monetary policy: Measure adopted by central bank to stabilize the money supply in economy is
termed as monetary policy. Banks adopts different ways to keep a check on money supply such
as by making changes in interest rates and open market operations to contract and expand money
supply as per the need and suitability. Iceland supermarket stores are operating around the globe.
When central banks makes changes, it affects strategic formation of management of stores in
their respective countries.
2.3 Impact of competition policy and other regulatory mechanism on organization
Apart from government laws and other legislative bodies, there are some organization
works to monitor the working and trade activities of business organizations and firms. These are
non profit organization who watch different aspects of organizational working.
Competition policy: This policy is framed to prevent5 and check hegemony of the organization
who holds major share in the market place. It monitors, if the organization is adopting any illegal
method to process their objectives and goals (Lambsdorff, 2007).
Office of fair trading: The organizations checks that trading firms and organizations are
following the trade norms. It ensures that agreement is signed by the parties is done in the
prescribed manner.
BIS: The quantum of trade and agreements ratified between different parties is enhancing in the
very significant manner. Hence, BIS works to bring innovation and creativity in the process
adopted by different parties to that it escalate the productivity and efficiency of employees. It
also checks that trading parties and following the legal norms and rules issued by different
international organizations and of the country in which they are operating.
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Competition Commission Monopolies and Mergers Commission: This organization is
empowered to intervene into the mergers and acquisition to check different aspects such as
national security and financial stability in it. Since 1969, Iceland supermarket has undergone
many acquisitions and mergers. At the time of processing, it has kept in to consideration all the
laws and regulations and has abides by it to maintain the legality (Luftman, Kempaiah and Nash,
2006).
TASK 3
3.1 Impact of market structure
Along with other factors market structure plays the crucial role in affecting the
functioning of organization. Market forces refers to the demand and supply of products and
services offered by Iceland supermarkets. When demand of its products increases, prices
decreases on the contrary, it works conversely. Similarly, other forces such as interest rates
prevailing in the economy that is it decreases it attracts investments and bring profitability to
Iceland supermarkets.
3.2 Impact of market forces
 Economic factors – Economic stability is the major aspect that which brings regulation in
the work processes. At present the economic outlook in UK is very uncertain and it may
affect the retail sales. It might be difficult for Iceland supermarket to face the challenges
of inflation. The customers might cut out their expenditures and this result in loss of sales
for the organization (Osterwalder, Pigneur and Tucci, 2005).
 Social factors – Consumer’s changing taste, preferences and lifestyles have always
presented threats and opportunities for the UK retail industry. Consumers have the
tendency to bring loyal towards one brand and the quality of products. Although this
situation changes with the adoption of competitive strategies from the competitors.
 Technology – The industry has witnessed many radical technological changes. Trend of
online shopping has widened the scope of doing business for the retailers. Social media
marketing is the latest sensation in the market. Companies are using Information
technology in order to derive competitive edge and to achieve differentiation.
 Competition level – UK retail industry is highly intensified with competition. In front of
Iceland, many big retail players are operating like Tesco, Marks & Spencer, Asda etc.
These companies are already holding a high amount of share in the market. Iceland is
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required to manage high level of competitiveness and to frame strategies which are
effectual and innovative.
 Political factors – European integration and free trade agreements has opened up many
new markets for UK (Roberts, 2006). Political factors affects the development efforts of
the company through labor law infringements in both international initiatives and local
operations.
3.3 Impact of business and cultural environment
At Iceland organization, diverse range of people work together for a common goal. They
all ensure that their respective cultural background are respected. It helps in maintaining a
dignified working environment. It is another most influencing factor which influences the mind
of the customers and persuade them to buy the products and services of the organization. The
employees working at the stores of Iceland are required to deliver proper services to the
customers so that good mouth publicity can be made. All customers at the stores are to be treated
in good manner and their queries are to be listened appropriately.
Iceland also operates stores in Spain and Portugal and also in many European nations.
All the countries are having different cultural backgrounds. The company is required to design
its business strategies as per that culture. It will help in enhancing their global position and will
take them to heights.
This requires lot of research and development work. Legal regulations and laws are being
enacted in UK and the companies are closely monitored within the industry. Bodies such as
National Legislation for Health and Safety and different food safety standards shapes the
behavior of the supermarket (Ruff, 2006). The food items served are required to be of high
quality and freshness. At present company is having presence in few countries of Europe
however for the purpose of expansion, the brand will need to enter different markets. The
competition level is very high and to face that, focus is to be made on strengthening the business.
TASK 4
4.1 the significance of international trade to Iceland Supermarket
Expanding venture and organisation in different countries brings lucrative benefits
to the organisation and its linkages as well. Presence of organisation on global grounds
proved to be beneficial for the management and organisation in different aspects such as
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profitability, market expansion, low risk of competition and other related. These are
explained below:
 Market expansion: Establishing ventures in different organisation leads to the
expansion of market by more consolidation of customers in respective countries.
 Profitability: Expansion of market and more engagement with the customers leads to
the sales maximization (chiefer and Seufert, 2005). It trickles down to the revenue
generation and swelling up the profits.
 Low risk management: Distribution of products in different markets lowers the risk
of failure. Further, there are different international organisation functioning to
protect the illegal trade practices and protect the organisations working in the
markets.
 Improve technology: When an organisation establish its venture in different
countries it comes into the contact of different suppliers and trading partners. It
enhances their capabilities to implement innovative and creative methods in their
working with the enhancement of knowledge and information about the latest
technology and effectual ways (Sekaran, 2006).
 Relations and networking: Working in different countries enhances the relational
constructs and networking of the organisation by bringing them lucrative results in
the form of increasing brand awareness, profitability and resourceful tie ups.
4.2 the impact of global factors on Iceland Supermarket
Many global factors impacts the functioning of the organisation in different ways
and aspects.
 Economic situation: Economic situation prevailing in different countries affects the
profitability of organisation. Difference in exchange rates and inflation rate of
respective countries directly affects the prices and sales margin.
 Technological advancements: Differences in technological advancements in the
countries in which organisation is operating affects the feasibility of the operations
and management. When countries have advanced technology in the countries,
operations of organisations become more lucrative and resourceful.
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 International organisations: There are many international organisation working to
monitor the working of organisation and trade practices such as WTO. It prevents
illegal trade practices among the states and organisation.
4.3 Impact of policies of the European Union on Iceland Supermarket.
European Union is a group formed to bring up-gradation and improvement in the
member countries in different aspects such as economic, social, political and business.
Iceland supermarkets is operating in the business environment of UK. UK is the member
countries of the EU (Zsambok and Klein, 2014). EU has laid certain rules and regulations to
maintain the situation. Two of the policies are mentioned:
 Supply chain: Supply chain in UK is one of the largest employees network working
in UK. Employees holds the significant share in the market and sections. Hence, for
the protection of larger number of employees certain rules have been laid (The
Iceland story. 2015). Iceland supermarket abides all the laws with respect to the
supply chain management with respect to the provision of safety and better working
conditions and assuring heir health.
 Consumer protection: EU has laid rules that organisation musty protect the interest
of consumers by charging them with optimum prices and fees. Providing them
products at affordable prices is the major concern. Organisation abides these laws.
CONCLUSION
From the above study, it can be articulated that organisation functions under the
influence of many factors external and internal. Iceland supermarkets have been taken into
account, it follows all the norms laid down by different organisation.
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REFERENCES
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