LSBM103 Business Environment Report: UK Subsector Analysis

This report provides a comprehensive analysis of the business environment within the UK's restaurants and bars subsector. It begins with an introduction to the business environment and identifies key issues affecting the subsector, including rising food costs, market fragmentation, and challenges in liquor sourcing. A PESTEL analysis is then conducted to examine the political, economic, social, technological, environmental, and legal factors influencing the sector. The report further assesses the impact of these issues on business sustainability, highlighting the importance of adapting to market changes and addressing regulatory hurdles. A reflection section discusses the need for broad knowledge and skills within the subsector and the importance of reducing economic segments. The report concludes by summarizing the key findings and emphasizing the significance of strategic decision-making in navigating the complexities of the business environment.

Business
Environment

Table of Contents
Introduction .....................................................................................................................................3
Issues that affected the sub sector...............................................................................................3
PESTEL Analysis .......................................................................................................................4
Impact of issues on business sustainability ................................................................................5
Reflection ...................................................................................................................................6
Conclusion ......................................................................................................................................7
References .......................................................................................................................................8

Introduction
Business environment is a marketing term that refers to various forces and practices that
affect the ability of organisation and maintain the successful customer services. The following
discussion is divided into three parts in which the first part includes two important issues that
affected the restaurants and bars which is one of the sub sector that contains operators of
restaurants, fast food facilities, coffee shops and brewing companies. This report also includes
PESTEL analysis on the basis of two issues and its impact on the sustainability of businesses. In
addition to this, the report also suggest reflection where there are two challenges which needs to
be followed by such experiences of these issues (Ding and Wu, 2016). The impact of internal and
external factors that effect various arenas of the company including customers, employees,
management, consumption, production and business regulations are known as business
environment. The basic aim of business environment is to understand that how well the
expectations of customers relies.
Restaurants and Bars
For consumers, different type of meals, snacks, drinks and beverages are provided in restaurants
and bars organisation. There are some famous restaurants operators from United Kingdom such
as Greggs, Compass group, SSP group, Sodexo and many others. Brewing companies includes
Carlesberg, Heineken, Molson Coors Brewing, Las Iguanas and many others are all included in
the restaurants and bars sub sector (Waal and Frijns, 2016).
Issues that affected the sub sector
Market Factor:
Rising food cost: One of the most important factor that affected the restaurant and bars sub
sector is the rising inflation on food services. Rising of the inflation can be occur due to
slowdown in the economy, climatic change and unfavourable demand & supply (Kirchoff, W.L.
and Mollenkopf, 2016).
Competition and the fragmented market: It has been suggested that there are number of
owners or can be called as players who compete with each other. There is an existing of low
consumer loyalty and sometimes their performance exist on low key. In order to expand the
business preposition and increase the diversification in consumer segments there is a need to

have a regular check on menu, format or concept. There is a need to increase innovative ideas to
remain in competition. In relation with Las Iguanas, the fragmented market reflects number of
challenges and opportunities to avail the services to their guest. In order to achieve maximum
benefits and satisfaction, there is a need to always provide best practices for the food outlets
because lack of food and bar outlets will automatically decreases the popularity of any restaurant
and bars organisation.
Liquor Sourcing:
In terms of Liquor sourcing, United Kingdom has a complex regulation in central as well as state
level. It has been suggested that there is a need of series of licensing to sell alcohol to the
customers or keep them in a restaurants or bars. There are some challenges which needs to be
focus if there is an issue of liquor sourcing so that there will be a proper safety and there is
nothing illegal. There are following challenges which needs to be adhered in liquor sourcing and
these are mentioned below
Long gestation period: To get the license for drinks and alcohol, a person can get the license
with proper certification and documents between 1 month to 1 year of applying for the same.
Anti-liquor mindset: Restaurants and bars should understand that not all people needs to have
alcohols and non-veg. Therefore, there is a need to strictly think and maintain their decorum on
the basis of every guest will enjoy with the best of it.
Huge and recurring licensing fees: To full fill the requirements of licensing from sign the
documents to verify with the government, there is a huge fees and burdens. The annual licensing
fees for all the beverages and drinks is as high as 20,802.38 pounds.
Burden of licensing are usually high: It has been suggested that many indirect taxes such as
custom duties, imports, excise permits and additional fees like government education tax are
levied on imports and especially on the alcohol. For example, restaurants and bars levied 150%
tariff on imported wine.
PESTEL Analysis
A PESTEL analysis is a framework used by marketers to analyse macro-environmental
factors. The two issues are market factor and liquor sourcing which greatly affected the
restaurant and bars because such are directly affected to the growth of this chosen sub sector.
PESTEL analysis can easily help to control inventory and sales goals (Stacey, 2016).

Political factor: On the basis of market factor, government impose various schemes on
people so that there is a better functional access in the society. There are lot of taxes that
imposed on foods and services for the betterment of society. Also, on the basis of liquor sourcing
there are all lot of political influence when attain for the licensing in the market. Sometimes
when the elections have been held then such political parties likely worked the best out to of it to
deliver license to the owner for raising their popularity if the bar is popular (Biloslavo, Bagnoli
and Edgar, 2018).
Economic factor: Increasing inflation leads to economic slowdown, there are high
chances of minimum wages which needs to be access on the right direction. If things will go
systematically or appropriately then there will be high chances of employees can better paid or
else employees can reasonably afford.
Social factor: Many religions in United Kingdom still does not raise the popularity of
Bars. They strictly avoid these bars because alcohol is against their religion. It negatively affect
the body. Restaurants and bars have higher employment ratio then any other businesses.
Technological factor: Technology is always advancing and works at the best level. The
technological advancement automatically raise the growth of business. In avoidance of high
payment stuffs and scenarios, restaurants are now provided online payments with vouchers so
that people receive maximum benefits. Apart from this, for licensing there are government
agencies which fill up of forms and verify their documents online so that things will be go
symmetrical in lesser period of time.
Environmental factor: Surrounding around the restaurant and bars can affect the
business in number of ways. A restaurant environment is an essential part to take marketing
decisions. Environmental factors in the restaurants and bars simply raises competition in the
market.
Legal factor: Legislation have a specific role in the restaurant business. The most
important point come under legal factor is licensing of all alcohol and drinks. There is a need to
have legal segments of every products avail in the restaurants and bars. Sometimes legal factors
affect the market decision of various products and services.
Impact of issues on business sustainability
Sustainability on businesses is an important concept for the development of long period.
Sustainability is build on the assumptions that company's longevity is quiet based on

development of the strategies. The two issues including market factor and liquor sourcing can
easily impact the sustainability of businesses.
Impact of market factor
Market factor suggested that if there is climatic issues, slow down in the economy then there is a
great economic factors which needs to be addressees. Some changes in businesses can be
possibly occur to develop growth and success in the market.
Nowadays the UK based food retailer company Sodexo completely shifted there structure
in their online websites. It is because Restaurants and bars have a broader picture in terms of
various issues and explanation including market factors, operational factors and many others.
Apart from it, mergers and acquisition could lead to be more subdued. Restaurants and bars sub
sector has been actively acquire the in the recent years in better reflect the consumer interest and
make it possible if there is a new entry of firms organisation.
One of the great example of Nestle suggested that it is one of the largest food company
but due to COVID-19 pandemic the company has been simply faces unfavourable demand and
supply of their products and services which genuinely affected their sustainability of business.
Low attrition rates increases the cost savings. In the long run, liquid sourcing impact a higher
value of proportion. In a global economy, 59% of businesses impacted from liquid sourcing
because there are some products and events which needs to be legal and for this there is a need of
licensing. It greatly impacted the sustainability of businesses because there is a need to have a
proper functioning in the society (Trad and Kalpić, 2017).
It has been also suggested that for many years, the businesses implemented various
strategies to work on such issues which impacted the businesses to maximise the sourcing and
distribution efficiencies to minimize the cost of various product. Heineken is one of the brewing
company which sometimes not able to get license of drinks and alcohol at the right time due to
which they some illegal issues by the government. This kind of problem simply decreases the
market values of the company and also reduces the popularity.
Reflection
Sub sector needs broad knowledge and skills: This point is seems out to be the most
understandable one because it has been suggested that to properly elaborate about the sub sectors
there is a need to have proper knowledge and skills about sub sectors. To decrease the prices and
market factors there is a need to shift the business online as well. Online websites of the food

retailers can help the organisation to increase the productivity. There can be a possibility to add
more flavoured and taste in items so that consumer will really attract from the products and there
is a possibility that food prices will be balancing. In terms of talking about the sourcing liquid
there is a need to implement various strategies to raises the growth in bars. It has been also
suggested that owners of the bars suffer from huge problems because of the permit of licensing
because there is a huge importance of licensing and it cannot be easily get it from the
government. But there is a need to reorganise the structure for giving the license at right times to
the owners of Bars and restaurants. There is a need to have broad skills and knowledge for
properly examine and functioned the restaurants and bars. Hence it can be states that every
employee and staff members of restaurants and bars needs to have knowledge and skills to
expand their business and achieve growth (Yang, 2017).
Focus on reducing the economic segments: Economic segments include high inflation,
cost inefficient, financial risks and many others which needs to be taken into the consideration so
that there is a huge possibility to achieve growth and success in such organisation including
restaurants and bars. Economic segments can be simply arises when there is an occurrence of
climatic changes, economic slow down or any increases in the inflation. For this, the owners andf
managers needs to implements such strategies where so that they will not face any problems if
such has been arises. Hence, it can be said that there is a need of having a regular check on
economy and execute their further plans on the basis of it (Abdelkafi and Täuscher, 2016).
Conclusion
The above discussion concludes that business environment has broaden the companies
immediate actions and attain them to make the proper decision so that sub sectors will achieve
maximum benefits and growth. The discussion is based on two issues that affected the sub sector
namely as market factor and Liquor sourcing. The PESTEL analysis based on such issues has
been mentioned above and gives an impact on business sustainability. At last, the discussion has
been contain a reflection that highlights the recommendation from these issues.

References
Books and Journal
Abdelkafi, N. and Täuscher, K., 2016. Business models for sustainability from a system
dynamics perspective. Organization & Environment, 29(1), pp.74-96.
Biloslavo, R., Bagnoli, C. and Edgar, D., 2018. An eco-critical perspective on business models:
The value triangle as an approach to closing the sustainability gap. Journal of Cleaner
Production, 174, pp.746-762.
Waal, A. and Frijns, M., 2016. The influence of the UAE context on management practice in
UAE business. International Journal of Islamic and Middle Eastern Finance and
Management.
Ding, S., Qu, B. and Wu, Z., 2016. Family control, socioemotional wealth, and governance
environment: The case of bribes. Journal of Business Ethics, 136(3), pp.639-654.
Kirchoff, J.F., Tate, W.L. and Mollenkopf, D.A., 2016. The impact of strategic organizational
orientations on green supply chain management and firm performance. International
Journal of Physical Distribution & Logistics Management.
Stacey, R.D., 2016. The chaos frontier: creative strategic control for business. Butterworth-
Heinemann.
Steiner, A. and Teasdale, S., 2016. The playground of the rich? Growing social business in the
21st century. Social Enterprise Journal.
Sun, H. and Richardson, J.T., 2016. Students’ perceptions of the academic environment and
approaches to studying in British postgraduate business education. Assessment &
Evaluation in Higher Education, 41(3), pp.384-399.
Trad, A. and Kalpić, D., 2017, June. A neural networks portable and Agnostic Implementation
Environment for Business Transformation Projects the framework. In 2017 IEEE
International Conference on Computational Intelligence and Virtual Environments for
Measurement Systems and Applications (CIVEMSA) (pp. 159-164). IEEE.
Yang, J.S., 2017. The governance environment and innovative SMEs. Small Business
Economics, 48(3), pp.525-541.
(Abdelkafi and Täuscher, 2016)( Biloslavo, Bagnoli and Edgar, 2018)(Waal and Frijns, 2016)
(Ding, Qu, and Wu, 2016)(Kirchoff, Tate and Mollenkopf, 2016)( Stacey, 2016)
(Steiner and Teasdale, 2016)( Sun and Richardson, 2016)(Trad and Kalpić, 2017)
( Yang, 2017)