Comprehensive Analysis of Iceland Supermarket's Business Environment

This report provides a comprehensive analysis of the business environment surrounding Iceland Supermarket. It begins by examining the organizational purposes of different types of businesses, including Iceland, KFC, Cancer Research, and TFL, and how these organizations meet the objectives of various stakeholders such as government, customers, employees, and shareholders. The report then delves into the economic systems, focusing on fiscal and monetary policies and their impact on Iceland Supermarket. It explores market structures, market forces, and the influence of business and cultural environments on organizational behavior. Furthermore, the report assesses the significance of international trade, global factors, and the policies of the European Union on UK business organizations, specifically concerning Iceland Supermarket. Tables are included to illustrate the purposes of organizations, stakeholder objectives, and types of market structures.

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1.1 Purpose of different types of organization.............................................................................3
1.2 Organization meeting the objectives of different stakeholders..............................................5
1.3 Responsibilities of an organization........................................................................................6
Task 2...............................................................................................................................................7
2.1 Economic systems attempt to allocate resources effectively.................................................7
2.2 Impact of fiscal policy and monetary policy on Iceland supermarket...................................8
2.3 Impact of regulatory mechanism and competition policy on Iceland Supermarket..............9
Task 3...............................................................................................................................................9
3.1 Market structures determining the pricing and output decision.............................................9
3.2 Market forces shape Iceland Supermarket...........................................................................11
3.3 Business and cultural environments shape the behaviour of organization..........................11
Task 4.............................................................................................................................................12
4.1 Significance of international trade to Iceland Supermarket.................................................12
4.2 Impact of global factors on UK business organizations......................................................13
4.3 Impact of policies of the European Union on UK business organizations..........................14
Conclusion.....................................................................................................................................14
References......................................................................................................................................16
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INDEX OF TABLES
Table 1: Purposes of the Organization.............................................................................................4
Table 2: Objectives of the Stakeholders..........................................................................................6
Table 3: Types of Market Structure...............................................................................................10
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INTRODUCTION
The internal and external environment of business organization refers to as the business
environment. Business environment affect the activities of the organization in a different manner.
Further, it is highly important to assess the business environment in order to cope up with the
changes and opportunities prevailing in the environment (Allen and Raynor, 2011). Through this,
competitive advantage can b be achieved and the firm can also become industry leader. In this
report, business environment of Iceland Supermarket have been assessed and discussion have
been made on the understanding of organizational purposes. Further, the report describes the
national environment in which the organization is operating its businesses. In addition to this, the
report covers the behaviour of the company in the environment in which the working is carrying
out. Along with that, the discussion have been done on the assessment of significance of global
factors which help ion shaping the business activities (Burch, Dixon and Lawrence, 2013).
TASK 1
1.1 Purpose of different types of organization
Table 1: Purposes of the Organization
Iceland Supermarket KFC Cancer Research TFL
Mission The organization
wants to provide best
employees by
encouraging through
motivation and their
subordinate provide
that environment so
that they can give their
best, this feeling will
help them reaching
their goal (Allen and
Raynor, 2011).
Kentucky Fried
Chicken mission
is to sell its
product in good
pace, amiable
nature that
request to aware
for joy and make
avail health food
to consumer.
Cancer Research
mission is to
remove the cancer
with the support
of everyone.
To see everyone
healthy and provide
harmful radiation free
society and good
quality
Vision Iceland vision is to be Is to be the Cancer Research The vision is to make
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the number one
supermarket is selling
the preserved food and
also wants to be the
producer with
innovated idea in
frozen food items and
provide best working
environment.
fastest food chain
in the leading in
the country and
maintain good
equality through
the coming years.
vision is to lead
that moment
where all cancer
patient are cued
(Casile and
Blake, 2002).
essential use of cycle
for transportation
purpose and make
everyday part of life
similar as their clothes
in which they feel
comfortable and don't
think much while
using it.
Goals and
Objectives
Make ensure that
correct address is
being taken for
costumer delivery
To increase the loyalty
of consumer and tempt
more costumer
To increase in the
percentage in
food market
Increase the profit
of the company
To provide good
quality of food
with new flavors
and good
ambiance
Little change in
the lifestyle of the
people of that
they cannot get
cancer
Reduce the cancer
up to the age of
75
Mostly the
community with
lower income will
be cued first
make them avail
the best treatment
at the early stage
by knowing the
details and cause
of cancer (Halbert
and Ingulli,
2014).
Reduce the harmful
reduction of the gases
produce from cars
make healthy lifestyle
of the people
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1.2 Organization meeting the objectives of different stakeholders
Table 2: Objectives of the Stakeholders
Stakeholders Objectives Strategies
Government  Payment of taxes
 Helps in the growth and development
 Social objectives should be meet
 Legal terms and condition should
followed
Customers  Provide the value for the product
purchased (Jones, Comfort and Hillier,
2006).
 Also make avail the number of
different categories of commodity and
services
 Some seasonal or other benefits should
be provide
 Healthy products should be provide so
the disease like obesity and cholesterol
don't occur
 Time to time changes
in the product
according to the taste
and preference of the
consumer.
 To provides offers and
discounts such 20%
discount and other
healthier option
included in their
options.
Employees  Provide secure job
 Healthy working surroundings
 Satisfying salary
 By timely providing
them salary and reward
benefits and have an
2yrs contract so that
they feel secured
 Hygienic conditions are
kept in mind and
provide friendly
environment
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 providing employee
benefits scheme such
as medical benefits,
etc.
Shareholders  Increase share value
 Provide dividends
 Generate large amount of Revenue
 By increasing the sale
demand can increase
the value of share so
that their profits can be
increased (Rafiq and
Fulford, 2005).
 Like 10% increase in
the price of the
commodity can leads to
higher profit margin
 increase brand image
so that people can trust
an by shares
1.3 Responsibilities of an organization
Responsibilities Customers: The organization responsibility towards the consumer is that they provide the
quality product which is certified (Venter and et. al., 2009). These Iceland supermarket
provide value for product which are at reasonable and affordable prices . It ensure that
good quality product are maintained. The company also make sure that raw material are
purchased from the approved by government for safety food supplied. It technologies are
kept being supervised so that new product are provided to consumer and its been tested in
their working space before it get supplied in the market.
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 Employees: The organization responsibility to is to provide job satisfaction to the
employee and also give healthy working condition and also job securities (Hackney,
Grant and Birtwistle, 2006). Society: Company has a responsibilities towards the society that it should not pollute the
environment. Along with that they want that company should fulfill the corporate social
responsibilities such as providing education to the lower section of the society (Ho,
Wang and Vitell, 2012). Moreover, the firm has to provide employment opportunities in
order to eliminate the evil of unemployment.
 Environment: The Iceland supermarket are certified and it has achieved in reducing
carbon emission by near about 15% and in a year it reduces 2.5%. The organization has
adopted and fitted energy saving equipment in the retailer stores and swap the freezers
with the one which produces less warm air (Snyman, Kourie And Botha, 2014). They
have robust that's keep an eye on the electricity so that it cant get wasted and also adopt
lots of projects which save lighting. Iceland always one step ahead in respect to the
environmental policies.
Strategies
1. Customer reasonable price range of product and tempting offers to consumer will keep
the consumer loyal towards the organization. Also people are becoming health conscious
so they can provide healthier food option.
2. Provide Eco friendly environment which are biodegrade packaging option should be
available and used those technologies which produce less amiable radiation or harmful
gases which pollutes the environment.
3. Iceland do two years contract with the employees so that their job get secured and
provide medical benefits and compensation so that an accident at the time of working
hours can be compensated.
4. The strategy used towards society is by providing lots of employment opportunity to the
people and CSR activities can be done.
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TASK 2
2.1 Economic systems attempt to allocate resources effectively
Economic system basically refers to as the system of production and exchange of
products and services along with the allocation of resources in a society or nation. In other
words, every country has its own economic system and there the resources are allocated in order
to meet out the expectations of the people of the country (Casile and Blake, 2002). There are
mainly three types of economic system that is free economic system, command economic system
and mixed economic system. Free Economic System: In this type of system business is set free in order to carry out
their operations and activities (Giulietti, Price and Waterson, 2005). In this, the task of
allocation of resources are totally depended on the market forces that are demand and
supply. It implies that allocation of resources are done on the basis of supply of producers
and the demand of consumer in the market Command Economic System:This is a type of economy in which the government of a
country focuses on its financial system. Moreover, in command economy, the allocation
of resources is determined by the government with the assistance of a centralized plan
(Hackney, Grant and Birtwistle, 2006).
 Mixed Economic System: Such kind of economy has both government and private sectors
and they both play a very significant role in the economy of a nation (Halbert and Ingulli,
2014). Resource allocation in public limited companies take place with the help of
centralized planning while in that of private sector, resources are allocated on the basis of
market factors such as demand and supply.
2.2 Impact of fiscal policy and monetary policy on Iceland supermarket
Fiscal policy is that means by which government adjusts their spending levels and tax
rates in order to monitor and affect the economy of nation (Harrison, 2013). There are various
kinds of fiscal policy that is taxation rates and exchange rates which impact the working of
Iceland supermarket. For instance, if the tax rates are increased by the government than company
have to sell the products at higher prices. This will reduce the sales of the company because
customers will reduce the consumption of products at higher prices. Thus, this hamper the sale
turnover and eventually profitability of the firm will get reduce.
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On the other hand, monetary policy refers to as the process through which monetary
authority of a country that is apex bank controls the supply of money in the economy by
controlling interest rates (Ho, Wang and Vitell, 2012). There are many policies such as interest
rates, inflation and deflation rate. If the apex bank increases the interest rates, than company has
to acquire the loan by incurring heavy cost. Thus, due to this reason company cannot invest more
in expansion and other activities. This will reduce the level of innovation by the supermarket and
thus eventually growth rate will start declining.
2.3 Impact of regulatory mechanism and competition policy on Iceland Supermarket
The competition policy laid down by the UK government has a direct impact on the retail
sector. And due to this, Iceland Supermarket will get impacted. Competition policy and
regulatory mechanism has reduced the rule of monopoly in the industry (Jones, Comfort and
Hillier, 2006). The government provided the opportunity to many firms to enter the market and
play fair game in the industry. Through this, customers can get variety of products in terms of
quality and price. Iceland Supermarket has to adopt the policies such as Competition Act 2002 so
that firm can get skills and abilities to play fair game in the industry. The impact which the firm
has is that it became innovative in providing services so that competitive edge can be achieved.
Along with that, expansion has also been done so that competition level can be increased which
provides several opportunities to the business. Due to this competition, the workforce of the
company will also become highly competent so that they can survive in the adverse situation.
On the contrary, company has also get impacted in a negative manner due to the
imposition of competition policy and other regulatory mechanism. After the imposition of
policies, the level of rivalry got increased because every firm wanted to be at top of industry.
Moreover, the firms in the industry started adopting unfair practices so that they can achieve top
position. Also the firm got impacted as the quality got compromised in order to reach at the top
position (Jones, Comfort and Hillier, 2009.). It has been implied that the competition policy and
other regulatory mechanisms has restricted the operations and activities of Iceland Supermarket
to a great extent. This has forced the organization not to get involved in any kind of unfair
practices. Additionally, it has affected the overall sales, profitability and growth of Iceland
Supermarket.
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TASK 3
3.1 Market structures determining the pricing and output decision
There are basically 4 types of market structure in which the organization has to decide its
pricing and output decision (Kandil, 2006). The types of market structure and the pricing and
output decision of Iceland supermarket are discussed as follows:
Table 3: Types of Market Structure
Market structure Key
characteristic
No of players Output decision Price
determination
Perfect
Competition
Large number of
buyer and seller
who sells
homogeneous
products (Rafiq
and Fulford,
2005).
Many There are large
number of buyers
present in the
market, thus
Iceland
Supermarket can
sell whatever they
have produced or
service generated.
Prices
determination is
done by the
industry as many
sellers are
engaged in
production and
sales and firm
adopts the prices
given by industry.
Monopoly Single seller and
large number of
buyers. No
substitute of the
product and
services are
available in the
market.
Single Firm. Iceland
Supermarket can
sell more number
of products when
it set low prices
for its products
and vice versa.
There is only one
seller or firm
present , thus they
decide the price
and industry
accepts it
(Snyman, Kourie
And Botha,
2014).
Monopolistic Very large
number of buyers
Many firms If Iceland
operates under
Different sellers
set different
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and many sellers.
They sell
differentiated
products in the
monopolistic
market.
this structure than
output level is
decided at a point
where marginal
revenue and
marginal cost
equate each other.
prices for their
products as they
have individual
control over their
products.
Oligopoly Large number of
buyers but few
sellers are present
in this market
structure.
Products can be
homogeneous or
identical (Trehan,
Trehan And Jain,
2013).
Few Firms or
more than three
firms.
Output level is
decided by
considering
competitors
product prices
because if prices
are reduced by
other firms then
customers may
shift to their
products.
Market leader of
the industry sets
price when there
are differentiated
products and
collusion is made
by all sellers in
case of identical
products.
3.2 Market forces shape Iceland Supermarket
Various market force such as demand, supply, customers perception, elasticity of demand
and supply, etc are present. This play an important role in Iceland Supermarket in order to shape
its long term and short term responses. For instance, company charges high price for the milk
product when demand for that product is high (Venter and et.al., 2009). This is done so that
company can earn extra profits in short period of time. In a similar manner, when perception of
customer changes and they look out for the same product having lower price in another retail
store, than Iceland tries to form strategies in order to lower down the costs. For example,
company can control its cost and lower down the prices by planning to hire a farm from where
milk comes.
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