Business and the Business Environment Report: Iceland Foods

This report provides a comprehensive analysis of Iceland Foods Limited Company, a supermarket chain. It begins by defining business and its environment, differentiating between internal and external factors. The report explores various organizational types based on ownership, including public, private, and voluntary organizations, and classifies organizations by size (micro, small, medium, and large). It then examines the interrelationships between different organizational functions such as human resources, marketing, production, and research & development, highlighting their impact on organizational structure and objectives. The report also includes a PESTLE and SWOT analysis of Iceland Foods, evaluating the positive and negative impacts of the macro environment on the business and the interrelationship between the two analyses. The report concludes with a summary of findings and provides references to support the analysis.

Business And The
Business Environment

Table of Contents
INTRODUCTION...............................................................................................................1
Overview Of The Chosen Organization.........................................................................1
LO 1 ..................................................................................................................................1
P 1 Different types and purposes of organization and their legal structure...................1
P 2 Size and scope of a range of different types of organization..................................3
LO 2...................................................................................................................................5
P 3 Relationship between different organizational functions and their link to the
organizational structure & objectives.............................................................................5
LO 3...................................................................................................................................7
P 4 Positive and negative impacts of the macro environment on the business............7
LO 4.................................................................................................................................10
P 5 Identification of strengths and weaknesses through internal and external analysis
......................................................................................................................................10
P 6 Interrelationship between strengths & weaknesses and macro factors................11
CONCLUSION.................................................................................................................11
REFERENCES................................................................................................................13

INTRODUCTION
Business can be defined as the social group of people who come together and
work together in order to achieve some common goals. Business are required to
structured and properly managed in order to reach to its target. Business Environment
refers to the surroundings in which business conduct its activities. Business
environment can be classified into 2 parts – External business environment and Internal
business environment (Laudon and Traver, 2016).
Report will highlight the different types, purpose, legal structure, size and scope
of the various business, interrelationship between organizational functions and their
relations with organizational objectives and structure. It will do the Pestle and Swot
analysis of the company and look upon the positive and negative impact of the factors
of business environment on the business and its operations. This report will
demonstrate the interrelationship between Pestle and Swot analysis.
Overview Of The Chosen Organization
Iceland Food Limited Company is a private company which is in the form of
supermarket. This company was founded in year 1970. Its headquarters is in Desside,
Wales, United Kingdom. Its mainly products are frozen foods and groceries. Its key
people are Sir Malcolm Walker who is founder and chief executive officer, Richard
Walker who is managing director and Tarsem Dhaliwal who is group managing directors
(Metcalfe, 2019).
LO 1
P 1 Different types and purposes of organization and their legal structure
TYPES AND PURPOSES OF ORGANIZATION & THEIR LEGAL STRUCTURES
There are various types of organization whose base of classification are different.
Some organization is classified accordingly size or legal formulation or relationships or
ownership etc.
Here the organizations are classified according to the Ownership (Hillary, 2017).
On the basis of the Ownership, Organization are classified into 3 types of organization -
Types of
Organizations
Public
Organization
Private
Organization
Voluntary
Organization
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Meaning It is also known as
publicly traded
company. It is a kind
of organization
whose ownership is
in the hand of
government and its
related authorities.
It is also known as
privately traded
company. It is a kind
of organization
whose ownership is
in the hand of an
individual or
individuals or
another company.
It is also known as
common interest
association. It is a
kind of organization
whose ownership is
in the hand of
Volunteer. Volunteer
is the kind of
member who
become the part of
the voluntary group
by their own will.
Purpose The purpose of
public company is to
provide public and
governmental goods
& services to the
society for their
betterment.
The purpose of
private organization
is to earn profits in
order to maximize
their stakeholders'
value and gain
competitive
advantage (Deasy
and et.al., 2016).
The purpose of
voluntary
association is to
resolve the social
and economic
issues which is
being face by the
societies.
Legal Structure Legal structure of
Public company are
as follows -
It must have at least
2 shareholders.
It must have a
qualified company
secretary.
It must have at least
Legal Structure of
Private company are
as follows -
It has to be
registered with
companies house.
It must have
minimum 1 member
and 1 director.
Legal Structure of
Voluntary company
are as follows -
It must be
considered as an
unincorporated
association.
It must be look by
the trust (Erasmus,
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2 directors. Strydom and
Rudansky-Kloppers,
2016).
Example Example of public
organization is
British Petroleum
PLC.
Example of private
organization is
Iceland Foods
Limited Company.
Example of
voluntary
organization is
Cancer research
UK.
P 2 Size and scope of a range of different types of organization
SIZE & SCOPE OF A RANGE OF DIFFERENT TYPES OF ORGANIZATION
There are various range of different types of organization which are as follows -
Types of
Organizations
Micro
Organization
Small
Organization
Medium
Organization
Large
Organization
Meaning It is kind of the
business who
employs a small
numbers of
employees.
It is a kind of
business which
is independently
owned by the
company and
limited in the
number of
employees as
well as revenue.
It is a kind of
business whose
employees
numbers and
revenues are
come between
small and large
organization
within a given
limited zone.
It is a kind of
business which
is similar to
multinational
bodies and have
huge number of
employees and
generate huge
revenue for the
purpose of
gaining
competitive
advantage
(Laudon and
Traver, 2016).
Size Following Following Following Following
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features are
considered to
be Micro
company in
United Kingdom
-
Turnover – not
more than £2
million
Employees –
not more than
10.
features are
considered to
be Small
company in
United Kingdom
-
Turnover – not
more than £10
million
Numbers of
Employees –
not more than
50.
features are
considered to
be Medium
company in
United Kingdom
-
Turnover – not
more than £50
million
Employees –
not more than
250.
features are
considered to
be Large
company in
United Kingdom
-
Turnover –
more than £50
million
Employees –
more than 250.
Scope The scope of
micro company
is to enhance
the income and
growth
opportunities by
reducing the
cost of running
the business.
The scope of
small business
is to varying the
size and
improve the
revenue
structure of the
company.
The scope of
micro business
is to provide
good quality
products and
services to their
customers and
enhance their
profitability.
The scope of
large
organization is
to gain
competitive
advantage and
sustain the
business by
developing their
various areas
(Hamilton and
Webster, 2018).
Example Example of
Micro company
is Boss Brewing
Company.
Example of
Small company
is Fordway
Solutions
Company.
Example of
Medium-sized
company is
Violia Media
Services
Example of
Large company
is Tesco
Company.
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Company.
LO 2
P 3 Relationship between different organizational functions and their link to the
organizational structure & objectives
RELATIONSHIP BETWEEN DIFFERENT ORGANIZATIONAL FUNCTIONS OF
ICELAND COMPANY
Interrelationship between Human resources and Marketing
Marketing helps human resources to get required skilled and talented
employees. Due to effective marketing activities conducted by the marketing
department, Iceland Company is able to create employer brand image which is
beneficial for the human resource department of the firm. Due to human resource
strategies and activities, marketing department are able to get the required skilled and
talented employees for themselves which is beneficial for them to achieve the
departmental objectives which is related to the organizational department. Thus, there
should be strong relationship between both functions of the company (Cepel and et.al.,
2018).
Interrelationship between Marketing and Production
Marketing department of the company helps production department to get to
know about the products and their features which help them to accordingly modified
their production strategies and activities which lead to produce large amount of the
products. Due to production department, Marketing department get the ideas about how
to make innovative products and what is the perception of customers towards products.
This lead them to do marketing of their products accordingly. Hence, there should be
strong relationship between both marketing and production functions in the Iceland
Organization.
Interrelationship between Production and Research & Development
Production department helps research & development department to do research
on products, their life cycle, their demand & supply pattern, market research and
innovation on products etc. This lead R&D department to do work accordingly and help
production department to analysis the data in order to get to know about the products of
the company, market trends and competitors which lead them to do conduct or modify
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their production accordingly. Thus, there should be strong relationship between both of
the organizational functions in the Iceland Firm (Gaganis, Pasiouras and Voulgari,
2019).
ADVANTAGES AND DISADVANTAGES OF INTERRELATIONSHIP BETWEEN
VARIOUS ORGANIZATIONAL FUNCTIONS
Advantages
There are various advantages to Iceland Company due to strong interrelationship
between functions carried out by the organization. It will help company to create co-
ordination between various activities. It will enhance the effective communication
between the employees and staffs of the organization. This will help in creation of good
working environment and completion of objectives on time.
Disadvantages
Despite of various advantages due to strong interrelationship between various
functions, there are some disadvantages which lead company to face issues. These
disadvantages are such as Increase in dependency on each other. Any functions got
delayed, it will lead whole organization to get suffered. High dependency lead
employees not to able to take accurate decisions for the organization.
RELATIONSHIP BETWEEN DIFFERENT FUNCTIONS AND STRUCTURE &
OBJECTIVES OF ICELAND COMPANY
Human Resources
Human resources helps organization to get the skilled and talented employees
who work together with another staffs of the company for the purpose of achievement of
their personal as well as organizational goals. They help employees to enhance their
productivity which strengthen the structure of the company.
Marketing
Marketing helps company to do marketing and promotion of their products which
is being offered by them to their customers. It enhances the brand image and sales
volume of the company which is considered to be objectives for the Iceland. It leads a
lot of interaction and communication between various employees, staffs, managers and
employers which make the organizational structure strong (Teece, 2018).
Production
6

Production helps company to carry its core activities by producing products and
services. It helps organization to create customers value which increase the profitability
of the organization and helps in achieving the organizational goals. Due to
organizational structure of the company, products has to go through various
management layers of the organization which improve the quality of the products
offered by the Iceland.
Research & Development
Research and development helps company to collect data about market, target
customers, innovation and competitors which lead company to make strategies, plans
and tactics accordingly. This lead company to stay in the competition and help in
gaining competitive advantage. Due to various reports prepare by the R&D on research,
various department has to contact with R&D which make the structure strong (Beatty,
Samuelson and Abril, 2018).
LO 3
P 4 Positive and negative impacts of the macro environment on the business
There are various factors involve in the macro environment of the Iceland
company. Analysis of these factors help organization to get to know about the impact of
those factors on the business operations. It will help company to grab opportunities from
positive impact and reduce the negative impact. Analysis of these factors is done
through Pestle analysis which is a strategic analytical tool. Pestle analysis is the
acronym of Political, Economic, Socio-Cultural, Technological, Legal and Environmental
(Scanning the Environment: PESTEL Analysis, 2016).
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PESTLE ANALYSIS OF THE ICELAND COMPANY
P – Political Factors
Example of political factors are taxation policy, trade policy, government rules &
regulations, political stability and government intervention etc. Change in tax policy will
affect the company's operations due to fluctuations in profitability. If government impose
high tax, it will reduce the profitability for company which lead funds to be reduce which
is for the operations of the business.
E – Economic Factors
Economic factors for the company are as follows – Growth rate, employment
rate, inflation rate, interest rate, demand and supply pattern of the products, pricing of
raw materials and pricing of the products of competitors etc. Change in pricing of raw
materials will affect the production of Iceland company. This lead company to bear more
costs and reduction in profitability. Decrease in interest rate will help Iceland company
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(Illustration 1: Factors of Pestle analysis,
Source: Scanning the Environment: PESTEL Analysis, 2016)

to pay interest to the bank at the low rate which will enhance its profitability (Quinlan
and et.al., 2019).
S – Socio-Cultural Factors
Example of socio-cultural factors are population size, their life expectancy rate,
income distribution, family structure, buying behaviour, beliefs, religions, cultural
aspects and values etc. Due to analysis of their cultural and religion background,
Company are able to satisfy their needs and wants by providing them varieties of food
products. This helps them to earn profitability. Due to rapidly change in customers
buying behaviours, the trends in supermarket and food industry is changing which
impact the company and their operations due to change in it.
T – Technological Factors
Technological factors for the company are as follows - R&D activity, Automation,
Level of innovation, Access to new technology, Technological change and cost of
technologies etc. If there is any new technology in industry and company is ready to
invest in it. It will help in enhancing the efficiency and productivity of the company.
Maintenance costs of the technological devices are high which lead company to bear a
lot of expenses and reduce the profitability (Hansen, 2018).
L – Legal Factors
Example of legal factors are employment law, equality act, consumer right act,
environmental act, health & safety act, intellectual act and data protection act etc.
Following of these acts and laws help company to operate their business smoothly and
comfortably without facing any kinds of legal and regulatory actions. Ignorance of these
acts will lead company to pay heavy penalty and face a lot of legal & regulatory actions
and criticisms from critics and customers. This hamper the operations and brand image
of the company.
E – Environmental Factors
Environmental factors for the company are such as – climate, change in climate,
natural disasters, pollution level, awareness about green products and environmental
policies & regulations etc. Due to technology being used by the company, their
paperwork reduced which lead beneficial to the environment. Due to large business,
Company has to do produce the products at mass level which requires a lot of water
9

and resources. This lead to wastages of these resources and increase the pollution
(Kopnina and Blewitt, 2018).
LO 4
P 5 Identification of strengths and weaknesses through internal and external analysis
There are various factors involve in the micro environment of the Iceland
company. Analysis of these factors help organization to get to know about their
strengths and weaknesses and their impact on the business operations. It will help
company to grab opportunities from positive impact and reduce the negative impact in
order to prevent from threats. Analysis of these factors is done through Swot analysis
which is a strategic analytical tool. SWOT analysis is the acronym of strengths,
weaknesses, opportunities and weaknesses (Ellickson, 2016).
SWOT ANALYSIS OF THE ICELAND COMPANY
Following is the Swot analysis of the Iceland company -
Strengths of the Company
Company's biggest strength is to provide products at the low cost. Company has
adopted low pricing strategies which attract the customers most. It leads company to
gain strong customer base.
Company has so many varieties in their products which fulfil the needs and
wants of so many kinds of customers. It leads company to enhance their brand image in
the market.
Weaknesses of the Company
Due to lack of innovation, Company are not able to satisfied the needs and wants
of their customers which are changing with the time. It leads company to face in
decreasing in their brand name.
Company has its biggest weakness which is that company is not investing in
research and development activities which lead company not to get knowledge about
the changing trends and market (Hillary, 2017).
Opportunities of the Company
Company's products are high quality and available at low costs. This lead
company to grab opportunity regarding the expansion of their business in new markets.
This will help company to make its presence at global market.
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In UK, government has put restrictions on the import of food items from another
company. It can be the biggest opportunity for the company. As, it will help company to
attract the customers by providing their products as a substitute.
Threats of the Company
Company has tough competitors in the supermarket industry such as Tesco,
Sainsbury's, Asda, Tesla and Morrisons etc. These companies are able to attract the
customers and make them loyal towards their companies.
Consumers are becoming conscious and prefer fresh foods. This can lead
company to face threats due to not give preferences to packed foods or frozen foods
anymore (Deasy and et.al., 2016).
P 6 Interrelationship between strengths & weaknesses and macro factors
Change in political factor may become strength or weakness for the company
depends upon its policy. For example – if government change in its tax policy and
increase it more than previous one tax rates. It will become the company's weaknesses
due to low profitability. But it can be strength for the company if company make policy to
keep some of its portion of its revenue as a reserve (Erasmus, Strydom and Rudansky-
Kloppers, 2016).
Change in social factor affect the company. It can become strengths as well as
weaknesses for the company. For example – if company do investment in technologies
or research & development, it will lead company to do prediction about the changing in
customers' preference which will change in industry trends. This will help company to do
plan about their strategies, plans, actions and tactics which will be beneficial for the
company to attract their customers automatically (Laudon and Traver, 2016).
CONCLUSION
From the above study, it has been summarised that Business and business
environment are deeply interrelated to each other. Change in business will impact the
business environment. Also, change in business environment will affect the business.
These impact can be positive and negative. Thus, it is important for the company to
analysis the extent to which business environment factors will affect the company
positively and negatively. Analysis can be done through various analytical tools such as
SWOT analysis and PESTLE analysis etc. there are strong relationship between swot
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analysis and pestle analysis because micro and macro business environment are
related to each other. There are various activities which are carried out by the business
for the achievement of the organization. In order to achieve the objectives, Business are
divided into various functional departments which are interrelated to each other and
affect each other to the great extent. Because at the end of the day, their objectives will
be shared and common. Due to the complexities of these functions, there are various
roles and responsibilities arise in the organization which create an organizational
structure. This organizational structure helps every employees and staffs to understand
their roles and responsibilities clear which help them to achieve their targets and
organizational objectives.
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REFERENCES
Books and Journals
Beatty, J.F., Samuelson, S.S. and Abril, P.S., 2018. Business law and the legal
environment. Cengage Learning.
Cepel, M., and et.al., 2018. Business environment quality index in the SME
segment. Journal of Competitiveness. 10(2). p.21.
Deasy, S., and et.al., VMware Inc, 2016. Controlling use of a business environment on
a mobile device. U.S. Patent 9,247,042.
Ellickson, P.B., 2016. 15 the evolution of the supermarket industry: from a&P to
Walmart. 1. Handbook on the Economics of Retailing and Distribution. p.368.
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to
business management. Oxford University Press Southern Africa.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and
SMEs' profitability: Evidence from European Countries. Economic Modelling. 78.
pp.275-292.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Hansen, A., 2018. Environment, media and communication. Routledge.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Kopnina, H. and Blewitt, J., 2018. Sustainable business: Key issues. Routledge.
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Metcalfe, R., 2019. Food Routes: Growing Bananas in Iceland and Other Tales from the
Logistics of Eating. MIT Press.
Quinlan, C., and et.al., 2019. Business research methods. South Western Cengage.
Teece, D.J., 2018. Business models and dynamic capabilities. Long Range
Planning. 51(1). pp.40-49.
Online
Scanning the Environment: PESTEL Analysis. 2016. [Online]. Available through:
<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>
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