Business Environment Analysis Report: Iceland Supermarket (Module X)

This report provides a comprehensive business environment analysis, focusing on Iceland Supermarket (IS). It begins by examining different types of organizations, including sole proprietorships, partnerships, and public listed companies, with IS and other examples like KFC and Transport for London. The report then delves into the significance of stakeholders, including customers, employees, and investors, and explores the importance of transparency and ethical practices. The analysis continues by exploring the economic system, including monetary and fiscal policies, and their impact on business operations. Finally, the report examines competitive policies and protocols within the UK market, emphasizing the role of competition commissions and European regulations. The report concludes with an overview of how IS navigates these complex business environment factors.

Business Environment

TABLE OF CONTENTS
Introduction..........................................................................................................................................3
Task 1....................................................................................................................................................3
1.1....................................................................................................................................................3
1.2....................................................................................................................................................4
1.3....................................................................................................................................................5
Task 2....................................................................................................................................................5
2.1....................................................................................................................................................5
2.2....................................................................................................................................................6
2.3....................................................................................................................................................6
Task 3....................................................................................................................................................7
3.1....................................................................................................................................................7
3.2....................................................................................................................................................7
3.3....................................................................................................................................................8
Task 4....................................................................................................................................................8
4.1....................................................................................................................................................8
4.2....................................................................................................................................................9
4.3..................................................................................................................................................10
Conclusion..........................................................................................................................................10
References...........................................................................................................................................11

INTRODUCTION
A well-formatted and structured combination of all significant factors, that is, the internal
and external, constitutes business environment. The above-mentioned factors effect and influence
the organisational structure the most and also play a vital role in all operational activities of the
corporation. The below analysis is carried out on Iceland supermarket (IS) which is a responsible
retailer, committed to providing safe, healthy and ethical sourced food. Good food substance is
always the main motive of the quintessence (Twyman, 2010). The further analysis is conducted to
examine the significance of organisational purpose of businesses, effects of nation's environment on
company, role of an enterprise in its marketing segment and also the significance of international
factors that configure the national business activities.
TASK 1
1.1
Different types of organisations exist and operate within an economy. The varied range of
business units that operates within countries are detailed underneath: Sole proprietorship – The enterprise unit that operates at small-scale operation.(Brinkman,
Navarro and Harper, 2014). It is owned and controlled by single owner who takes entire
responsibility of managing collaborative operations. Partnership – It is a venture unit that is owned and controlled by two or more partners. The
partners mutually manage operational activities and shares all profits and losses. Public listed company – The established unit is managed by top management and owned by
venture capitalists. It is listed as a company whose real owners are equity holders
(Whittington and Delaney, 2011).
Iceland Supermarket – It is a private retail entity and the business provides all type of food services
to the consumers. It can be said that IS is a large retail firm, which provides dispense products to the
general public. The vocation sells all food services and this helps the entity to operate its
functioning. The aim of IS is to deliver prominent services to the clients so that they may not switch
to other brand.
KFC – It is a fast food restaurant chain that specializes in fried chicken and the major headquarters
are in United States. The main purpose of KFC is to deliver quality and different variety of chicken
to the customers so that they can enjoy fast food (Craig and Campbell, 2012). It was one of the first
fast food chains to expand internationally and has opened outlets in different parts of USA.
Transport for London (TFL) – TFL is a statutory corporation and it is a local government body
responsible for most aspects of the transport system in Greater London. Its role is to implement the
transport strategy and also to manage transport services across London.

Cancer Research – It works as a charitable organisation. The main purpose of cancer research is to
treat patients suffering related issues (KazCham, 2014). It raises money through donation, events,
retail and corporate, partnership and community fund raising.
1.2
IS has been managing all the business practices in an effective manner with the support of
all its venture capitalists. The major investors of IS are its customers, employees, owners, suppliers
and shareholders. All the objectives of equity owners need to be fulfilled in such a way so that they
can contribute in organisational resources (Rogers, 2016). The organization has been delivering
proper assistance to the customers and all endeavours results in customer satisfaction. At the same
time, the business also makes sure that customers are not cheated from any ground and fair
indulgence are provided to them. For retaining the customers, IS has been considering quality
aspects in relevant delivery process so that needs and demands of clients can be fulfilled.
Employees plays a prominent role in Iceland Supermarket which efforts to provide the
services to their marvellous clients. These types of assistance provides a relevant feedback which
tries to manage the financial earnings and profitability statements. Its the millstone for the
enterprise to ensure about the welfare about the members. The entity limelight on elements which
depicts the importance of employees in organisation. It should measure welfare's success by how
many people leave welfare, not by how many added ( Aas and Pedersen, 2010). It is integral to
grease the wheels to penetrate proportionate roles and responsibilities for all the employees so that
they can perform there assigned duties effectively. Entity needs to establish the appropriate business
relationship with transitory so as to acquire desired belongings as per the stipulation. Some of the
appreciable capital ventures are discussed as follows: Direct Holders: The share owners who directly participate in the operations of the entity and
gets most priorities. They are the one who design the innermost and outermost frames of the
company on which the operations are being performed. Like employees, managers, owners,
etc. Indirect Holders: These stay ringed near the organisation but didn't have any direct
involvement. Occasionally they may have some sort of vigorous encounters. The most
pertinent holder is Society in which the establishment is active. Employees: These are the backbone for performing the business activity. Their main motive
is to perform the task and fulfils the relevant objectives which inculcate motives (Aggarwal
and Selen, 2011).
 Financial Structures: It provides the financial assistance so the entity which helps in
meeting the compulsions. This helps them to keep check on the institution about their proper

utilisation of funds and analyse about their returns and risk management factors.
1.3
Iceland Supermarket is culpable for managing the business operations in a decent manner to
optimise the maximum and plausible outcomes which should stabilise for long term casting ballot.
A large number of people is engaged in these activities and its the stand-pat for the organisations to
execute the needs of the equity owners (Chen, Tsou and Huang, 2009). Stake owners should be
administered with all appropriate benedictions and its the paramount advantage provided to them
that they can access the books of accounts, financial statements, audit reports in the annual general
meeting organised by the business at the end of every financial year. Institutions accentuate on the
transparency and fair conditions just in case the members associated with it can examine the
internal corporate working. Its the prime duty of the organisation that what they are providing
should comprise with charter. Market also district here as the talking doesn't depicts everything it
should be proved in deposition. Enterprise should adopts the approaches of performing ethically and
morally which ensures that proper allocation of resources, distribution of dividends among its
owners in a legitimate manner (Crook and et. al., 2011). Everyone who sustain with the operational
activities should constrain some position within. “We need business to understand its social
responsibility, that the main task and objective for a business is not to generate extra income and to
become rich and transfer the money abroad, but to look and evaluate what a businessman has done
for the country, for the people, on whose account he or she has become so rich. ( Vladimir Putin)”
TASK 2
2.1
The nature of economic system is complex but its the only path to create a relationship
between the owners and society in which it habitats. The integrated economy is in workforce under
several monarchs who commute it in stipulated inclination. The price mechanism portrays an
efficient role examining the basic economic dilemma in context of society. Operational activities
should be performed under legal procedures and applied norms by the law. Some policies and
restrictions implemented under some unusual circumstances which directly governs by the National
Authorities and have to be followed by the entity. Consideration of new structures of enhancement
of working plight. Benefits and problems are the two basic components of the economic activity.
Iceland Supermarket also faces these types of situations and they should be prepared with the
strategies to handle this (Dawson, 2014). Decisions regarding the strategic aspect of the of
organisations working policies should be entitled to be change periodically to keep the ball rolling.
Carrying out the operational activities. In perfectly outlined economic system, intrinsic authorities

tries to fulfil all the demands inside economy. With this there is some stability conserves. But as it
has benefits its also have some problems like the ignorance of environmental impact which may
lead to the eradication of natural as well as human resources leading the situations to jeopardy. The
basic elements of economic problem are discussed here: What to produce: Economy comprises of users who consumes the final product. Those are
the one who review the products with which it is decided in the economy whether they
should be produced or not. The most difficult task is to select the range of the product.
Therefore to maintain and stabilise the equilibrium, its necessary to balance the demand and
supply. How to produce: The situation here arises which appropriate method of productions is
adopted. Mainly two methods are suggested: labour intensive technique and capital intensive
technique (Gunday and et. al., 2011). The selection of the concept depends on the pricing
policy which the entity has adopted.
 For whom to produce: The purchasing power only resides with the customer who is the final
user of the commodity. Determinations of the pricing factor in relation to production may
rescind the situation of plight.
2.2
The two basic components which effects the financial system of an economy are: Monetary
Policy and Fiscal Policy which controls the movement of money. The purpose of both the policies
are same but with different artery. Stabilise economic growth, ossifying the price level, balance of
payments, etc. are the important aspects. Financial policy which refers in controlling the supply of
money in the economy. Where as in the fiscal policy the main aim is to arbitrate the tax reforms
policy is formulated, preparations of budget coordinated, etc. (Ingenbleek, Frambachand Verhallen,
2010). Repo rate and reverse repo rate are comprised in monetary terms which manages the flux in
the market which influence on company's operations. Policies are framed for evolving the
tremendous profits and utilise them in the organisation where as fiscal policy can intensify the
mercantile accomplishment of nation. On the contrary financial concept implicate the tax reform
which associate with the level of expenditure that higher authorities implements. Therefore it is
appropriates that fiscal policy of an economy with the budgetary facet. Its is an probable fact that
budgetary demeanour which helps to gather the resources. It is the fiscal policy that assists the
company to determine the tax ratio and its impact on organisations profit (Jaw, Lo and Lin, 2010).
The Iceland Supermarket should adopt the techniques which provides them a platform to perform in
global market and helps the organisations to analyse its profit figures, improvise their budgeting
techniques. Business administration assist the advantage offered by fiscal policy including the

support of internal and external bodies so that they can perform effectively and efficiently.
2.3
Competitive policies and protocols are required to be understood and taken into picture by
the organisations that operate in UK market place. The approach also ensures that market will work
well for consumers by assuring fair competition and trading. Iceland Supermarket has been
considering this act and this accommodates in managing all the business entities in an adequate and
legal manner (Johannessen and Olsen, 2010). Furthermore, competition commission is also
followed up by IS at the same time, which is a public body and assists in taking charge of
investment for mergers and other judicious purposes.
Considering such an act, it can help the business entity to facilitate an atmosphere of healthy
competition among all the similar entities. Whereas, norms defined by the European commission
are also taken care of and abide by since, it upholds agreements that manage day to day firm
activities. In retail industry of UK, healthy competition is being commanded and as a result all the
competitors are working in an ethical manner. These rules and regulations strictly affect Iceland
Supermarket in numerous ways. Firm needs to comply with these rules very precisely and if not
followed, then strict action can be taken against it for non compliance with rules and regulations
(Kanchanda and Ussahawanitchakit, 2011).
TASK 3
3.1
Different market structures determine pricing and output decisions. They are as follows :-
Perfect competition market- Large number of buyers and sellers are present in the market
place which is on a highly competitive edge. Iceland Supermarket has been operating in such a
market place from decades. Due to this frame of market structure, IS is allowed to trade freely with
other countries and can alter the pricing factor depending on the quantity of the product demanded
in market place (Liao and Rice, 2010). Its response to demand is remarkably high and purchases
merchandise when demand arrives. Also demand forecasts are planned therefore, goods are bought
accordingly. Hence, company follows a provisional approach in responding to a demand.
Monopoly market – One seller has the monopoly. It has the advantage of capturing the whole
market and enjoy the privileges of a king. Prices keep fluctuating and this can also change the entity
operations. Monopoly is a favourable condition since no other firms exist in the same market place.
Duopoly market – In this market, two sellers are present to compete with each other, having
similar products and that changes the output level. It comes between monopoly and perfect

competition (Oke, Walumbwa and Myers, 2012). They rule in pricing decisions as well, because of
no competition present.
Oligopoly market- There are large number of suppliers present which further impacts the
decision making of the organisations. In such a scenario, organisations are not able to make changes
in pricing strategy whenever they desire to.
3.2
Market forces determine the relation between demand and supply within an exchange.
Organisational response is the manifestation of the entity to a business circumstance. It is necessary
for Iceland Supermarket to bring attention to the competitive aspects in order to introduce new
products in the market place (Ordanini and Parasuraman, 2011). The eminent factor that forms the
organisational responses is demand and supply feature, as when the crowd demands for more, the
business must have the capacity to cope up with that demand to provide for as per the needs.
Purchasing power makes it possible for people to buy things thus, increasing the demand factor.
Buying power at the same time also determines the elasticity according to the resource flow that
prevails in the economy. Furthermore, the elasticity of substitute products also specifies activities of
Iceland Supermarket and the retail industry of UK is comprised of large number of competitors. The
plane of competition has been increasing as there are substitutes present that are innumerable. It
further changes the probability of customer switching to other brands therefore IS has to work on its
products and services to retain in the market and maintain the brand image(Perez-Luno,
Gopalakrishnan and Cabrera, 2014).
3.3
Organisational behaviour has an immense impact on the cultural and business environment.
Iceland Supermarket has been functional in competitive market place although different cultural
aspects have been considered by the firm to fulfil customer needs in a satisfactory manner. Political
factors affect the business scenario of UK and it contours the internal activities. Simultaneously
policies are to be kept on top most priority. (Ponsignon, Smart and Maull, 2011). The corporate has
to give more significance to cultural aspects and for that each staff member should be given equal
importance and centre of attraction being the social and cultural aspects, which can assist Iceland
Supermarket for managing social support at all the stages.
Economic affluence of the business has been intensifying because the flow of resources in
the husbandry is pertinent and thus it helps in managing the demand and supply aspect. This shows
the business process of Iceland Supermarket. IS has to use technological resources in magnificent

numbers which gives way to innovation and creativity which help increase the productivity. The
firm has been trying to minimize the portion of resource wastage which shows that company thinks
from environment point of view also. (Ren, 2009). It also helps in promoting the value of corporate
in the eyes of customers.
TASK 4
4.1
International trade (IT) is significant of every nation, otherwise, it would not be possible to
develop or produce all products and services within community. All the products cant be made
available by the country and thus, it needs to trade commodities from other nations. When any
company enters in global market place for the purpose of trading with the overseas business
corporations; then the process is termed as international trade. This means that the entity has grown
its functional activities in global market place (Roca-Puig, Beltrán-Martín and Cipres, 2012). The
corporations operating business in UK embarks in international trade because it develops the extent
of acquiring greater profits and as a result, competitive edge can be attained. International trade
seems to be beneficial for Iceland Supermarket as that can grow and develop the image of the
organization and more consumers will be attracted towards the same.IT can create a few issues to
the corporation; but it would definitely increase the market share and growth potential. Moreover,
Iceland can make huge use of technological aspects by entering into global market place.
If Iceland Supermarket enters into global market, then the business would get the
opportunity to bring various products in different varieties to all the other divisions of consumers.
This can make a wider choice of array which will not only improve their quality of life but also it
will help the nation to develop and cherish more(Santos and Spring, 2013). Along with this, IT
promotes efficiency in production as economy will try to adopt good methods of manufacturing to
keep the cost down in order to remain in the competitive market. Its a significant fact that having
international business can assist Iceland Supermarket to generate more opportunities for
employment; thus it will help the country to bring down their unemployment rates. At the same
time, international trade can be helped by managing which can help UK to make optimum use of its
natural resources and wastage of resources can be avoided.
4.2
There is a huge impact of globalization on UK business organisations. Globalization means
firms that are performing in more than one nation with having targets of earning higher profits,
increasing scope of business and the wealth of economy. When any corporation enters in global

market, issues related to economic, social and political are faced. Thus, Iceland Supermarket may
also face such constraints at the time of entering into new market. Global forces like policies and
strategies of companies can impact the existing work processes and it can also hamper the interest
of stakeholders in the business. In UK retail entity has the potential to enter in international market
since that they have all such products which the customers prefer to have (Sousa and Voss, 2009). It
is require that concern is to be given on competition policies and acts so that healthy rivalry can be
generated in the market without any issue. So it is clear that, IS can got many benefits from
international trade but at the same time it cam impact the persistent operations of business entity.
Once such impact of global factors is that Iceland supermarket will be considering
technological factors highly so as to facilitate innovation and creativity in the business processes. To
enhance the productivity of the organization new techniques and innovations should be made in
use.. Further, IS can face issues concerned with economic condition of UK because it changes
frequently as per the market structure and high propensity to import may cause reduction in the
domestic savings of the country and this may adversely affect the rate of capital formation along
with the process of growth (Storey and Kahn, 2010). Under foreign trade, when a country tends to
specialize in a few products, job opportunities are generated on higher extent and it augments
economic stability of the country.
4.3
Several advantages are deliverer by the combination of policies in the European Union (EU)
however on the other hand, this could also lead top consider numerous policies for business
management. UK businesses have to maintain all type of rules and All EU nations have some
European Union laws that they have to follow while running their business. If any corporate or EU
nation want to do business, it needs the EU money and to be transact in Euro. Policies of EU have a
huge impact on the firms of UK through taxation law and by encouraging business activities
through subsidies. The policies under European Union can also assist the supermarket to augment
the skills of the employees to generate more revenue. To face the legal issues from legal concerns
can assist the Iceland Supermarket it is also considered in the policies of EU. With the help of
European Union policies, many organisation can enter in the new market with maximum benefit in
amount (Twyman, 2010). The policy is also beneficial for s the organization as the corporation will
be able to enter in the competitive market without facing may boundations because EU allows easy
entry and exit in the retail industry.
The European Union is considered as the biggest market territory in the whole world and
this reflects that all the concerned of EU can freely conduct the business and trade practices
throughout other member states. In the retail market, IS can acquire benefits like reduced selling tax

and freedom from other restrictive fiscal measures. So, the enterprise will be able to earn huge
amount of profits and it can also operate more freely without facing interference from norms and
regulations laid down by the governing bodies. Another important aspect of EU membership is that
it helps the companies from other areas of the globe to oblige the regulations and policies of
respective European nations (KazCham, 2014). So, Iceland Supermarket have to oblige different
policies and norms for adequate business operations.
CONCLUSION
The above analysis helps us to understand the organisational purposes of various
corporations, for instance private companies, government, public companies and voluntary firms.
Furthermore, the responsibilities of Iceland Supermarket towards the stakeholders is explained.
Also the needs, desires, interests and objectives of the organisation should be given higher priority
in the corporate. The study evaluates the Iceland Supermarket has been obtaining immense
assistance from cultural forces and thus, helping to retain customers for a longer time. From the
research study, it is analysed that IS should expand the business operations in international markets
as well to gain a competitive edge over the rivalries and also it has been explored that economic
system plays a vital role in determining the flow of resources in the country.