Business Environment Analysis of the Retail Sector in the UK

This report provides a comprehensive analysis of the business environment within the United Kingdom's retail sector. It begins with an introduction to the retail business, highlighting its significance in the UK economy and its contribution to job creation and revenue generation. The report then delves into the application of the Value Chain Model to retail businesses, examining primary activities such as inbound and outbound logistics, operations, and marketing, as well as support activities like research and development, procurement, and human resource management. The impact of micro-environmental forces, including suppliers, competitors, customers, and the public, on retail operations is also explored. Furthermore, the report discusses the usefulness of academic models, specifically the SWOT framework, in understanding the internal business environment of retail firms, emphasizing how it aids in identifying strengths, weaknesses, and strategic goals. The conclusion summarizes the key findings, underscoring the importance of factors like inventory management, marketing strategies, and micro-environmental considerations for the consistent growth and expansion of the retail sector.

Business Environment
Analysis

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
CONCLUSION...........................................................................................................................................6
REFERENCES............................................................................................................................................8
Books and Journal...................................................................................................................................8

INTRODUCTION
Business Environment consists of all the essential factors and forces that can potential impact
and affect the work operations of the business enterprises in the market environment. It
highlights upon the affect generated by internal as well as external factors upon the day to day
functioning and regulation of the business institutions. The concerned essay highlights upon the
business environment of Retail Sector in the United Kingdom. It involves the application of
Value Chain Model to the business practices of retail organizations. The impact laid by micro
environmental factors upon the retail business is also demonstrated within the report. Moreover,
the value derived by the application of academic model in context to understanding the internal
environment of retail business is also facilitated within the given report.
MAIN BODY
Retail Business in United Kingdom
The retail business can be characterized as one of the most successful sectors within the UK
market industry. Retail business encompasses the facilitation of goods and services to the general
public as per their utilization or consumption requirement. Foe instance, general shops,
supermarket and departmental, door to door sales, online services etc. are few of the prominent
examples of the retail outlets. In context to United Kingdom, retail business play the huge part
in the acceleration of the economy as it broadens the scope for income generation for the
country. In the year 2020, the retail output was estimated nearly 97 billion pounds. In addition to
that, more than 3 million jobs were generated through the business operations of requirements in
retail sector (Taecharungroj, Warnaby and Parker, 2020). It can be stated that retail business
assist in the economic as well as social growth of the United Kingdom by facilitating the nation
with optimum revenues and assisting the society by building job opportunities within the same.
H&M, Tesco, Aldi, Marks and Spencer etc. are few of the most popular and successful retail
organizations within the United Kingdom.
The main purpose behind conducting a retail business is to acquire outstanding profits by
facilitating a good difference between the expenditure incurred on the production or acquisition
of product as well as the revenue generated from the sale of the same (Nudurupati, Garnego and
Bititci, 2020). The retailing business provides an optimum leverage to the individuals to either
increase the price of their products and services or reduce the expenditure. In both the cases, the
retailer can capitalize upon the prominent advantage to acquire adequate profits in an effective
manner.
Value Chain Model of Retail Business

The application of value chain model can assist in the determination of the appropriate action
plan and tactics that can be incorporated by the business institutions indulging within the retail
business to advance the sale of their products and offerings within the target market. The
objective of value chain model is to understand the ways in which a particular business sector
can integrate a systematic and organized structure that can further assist in the acceleration of
revenue generation for the same in a consistent and reliable manner.
Primary Activities
Primary activity can be characterized as activities and processes that cause direct implication
upon the respective input, output and distribution of the organizational products and services.
Inbound and outbound logistics are extremely important for the functioning of the retail business.
The retail business is extremely dependent upon the acquisition, storage as well as distribution of
products and services in an organized manner. It is very essential for the retail business
enterprises to facilitate a competent and systematic process in order to maintain the adequate
inventory, facilitate the delivery as well as distribute the goods and services in a defined manner.
For example, Tesco is one of the largest retail supermarket chains in the United Kingdom. It
needs to maintain the optimum level of inventory and stock so as to meet the requirements of
global customers ((Springer, Cham. Prasetyo and Dzaki, 2020). Also, the distribution channel
facilitated by Tesco is very advance and integrated which in turn helps the company to raise
good revenues and margins in the market sector.
The operations management can also be characterised as one of the most necessary business
activities that needs to be conducted by the retail business enterprises. It focuses upon
assembling of the products and services through utilization of advance technical and mechanical
advancements, designing the packaging of the offerings etc.
Marketing involves optimization of attractive promotion tactics, aggressive advertising in order
to persuade the sale of products and services offered by retail business enterprises. The
concerned component accelerates the products and service awareness within the market
environment. It also concentrates upon building strong customer- organization rapport so as to
retain maximum number of the customers in the long run. For instance, H&M capitalizes upon
social media platforms in order to raise campaigns that can assist in the increase in the sales of
products created by the organization. It also helps the firm to approach the target audiences and
reach a larger number of customers in a deliberate manner.
Service quality also plays a significant part in the acquisition of a good market share and profit
margin within the target industry. The retail enterprises are required to maintain an optimum
standard of quality in their products and services in order to elevate the customer experience and
enhance the customer satisfaction to a higher extent (Davis-Sramek, et.al, 2020). The retail
business organization also exercises after sales service in order to assist the customers and
provide better purchase experience to be same.

Support Activities
Research and development is quite necessary for the regulation of retail business. The degree of
competition in retail business is extremely high. Hence, it is crucial for the enterprises catering
within the concerned business industry to invest into research and development in order to come
up with creative and innovative products and services that can help them to acquire a good
leverage and differentiation perk in the market environment. The companies need to constantly
upgrade their business process and procedure through Research and Development in order to
increase the level of efficiency and accelerate the overall productivity of operations.
In order to lead the reatil operations and functions in a continuous manner, it is significant for the
enterprises to lay emphasis upon procurement of advanced machinery, infrastructure facilities
etc. A prominent procurement procedure helps the firm to facilitate its business practices in a
routine manner without any severe implications or disruptions.
Human resource management can be termed as a component of management practice that
incorporates the recruitment of the talented and skilled employees within the organization,
facilitation of advance training to the same as well as ensuring effective retention of employees
in the long run (Mu, 2020). The retail business enterprises need to constantly provide training
and development platforms to its workforce in order to increase their knowledge and degree of
competence. It further results in an increase the productivity of business practices and attainment
of business goals and objectives in a relevant and efficient way.
Moreover, retail business organization also needs to prominently lead operations relating to
finance, information technology as well as legal obligation considerate manner. The above
mentioned managerial components are extremely necessary for the smooth functioning of the
business enterprise in the retail sector. The vital and adequate attention upon planning of the
respective components can deliver enhanced advantages to the retail business enterprises in the
business sector.
Micro-environmental forces that can affect the key activities of the retail business
Suppliers can usually hugely upon the business profitability of retail organization. The retail
firms need to excellently negotiate with suppliers’ chains in order to crack beneficial deal for the
same (Noga, Jarzębowski and Maciąg, 2020). The acceleration of supply rate can increase the
organizational expenditure which in turn can decrease the overall profit scale acquired by the
retail institution in the market.
The growing competition within the retail sector also contributes in the division of profit margins
to an extreme extent. The continuous rise in the degree of competitiveness leads to impact the
retail organizations as growth in the number of companies decreases the percentage of market
share acquired by the retail firms.

The success of retail business lies within the interest of customer. The reason for the same can be
stated as the necessary role executed by the customer in the process of retail business. The
company needs to regularly strive for facilitating the best quality products at affordable ranges in
order to attract the customers within the retail environment (Kawaguchi, 2021). The retail
business enterprises needs to upscale their service quality in order to meet the expectations of the
customers and engage the same within the organizational offerings and services for a maximum
period of time. The inability of the retail business organization to map the demands and
requirements of the customers can impact upon their stability and profits in the market
environment.
The public also affects the business activities of retail institution by shaping the image f the
company within the business environment. For instance, Marks and Spencer has been able to
emerge as a successful retail venture through the support of the public. The company’s
reputation and goodwill in the public domain has facilitated the firm to achieve the mass success
and profitability in the retail industry.
Usefulness of an academic model in your understanding of the internal business environment
SWOT Framework can be termed as a prominent academic model that can be utilized to study
the internal business environment and factors of retail business industry. The respective model
provides key insights about the various strengths as well as existing weaknesses of retail business
enterprise which in turn helps to study the internal business practices of the same. SWOT
analysis projects a detailed description of all the strength gathered by the business institution
through which they achieve a competitive edge over their existing competition. Whereas, the
weaknesses provides detailed information upon the drawbacks and challenges faced by retail
institutions in the market (Sokol, Holý and Cipra, 2021). Thus, it can be said that the internal
factors that are most crucial for the long-term success of the retail business firm can be termed as
its potential strengths as well as weaknesses. Swot assessment also helps to identify the
respective goals of the retail business as well as the strategy is optimized by the same in order to
facilitate the achievement of business objectives. It provides an outlook of the ways and process
through which the business enterprises facilitating their operations within the retail sector utilize
their strengths for achieving enhance sustainability in the business environment. It can be said
that that the effective application of SWOT framework upon the business activities and process
of retail industry can help to determine the business outlook of the concerned industry in our in-
depth manner. In addition to that, SWOT analysis is helpful in understanding the major and
significant business functions of the retail firms that assist them with higher growth and
productivity in the market domain.
CONCLUSION
From the above discussion, it can be derived that retail business sector is one of the top leading
sectors within the market setting of the United Kingdom. The respective sector has assisted in

major growth of economy for the United Kingdom. The most valuable components that facilitate
the consistent growth and expansion of retail sector can be termed as its inbound and outbound
logistics especially inventory management and distribution networking. Also, the marketing
strategies implemented by retail organization are very creative and attractive as well. It can be
said that micro factors such as customers, suppliers and competitors also affects the business
operations of retail firms in an enhanced manner. The use of SWOT framework is one of the
most significant modes in the acquisition of appropriate knowledge and understanding of internal
environment of retail business.

REFERENCES
Books and Journal
Taecharungroj, V., Warnaby, G. and Parker, C., 2020. Responding to the voice of the markets:
an analysis of Tripadvisor reviews of UK retail markets. Journal of Place Management and
Development.
Davis-Sramek, B., Ishfaq, R., Gibson, B.J. and Defee, C., 2020. Examining retail business model
transformation: a longitudinal study of the transition to omnichannel order
fulfillment. International Journal of Physical Distribution & Logistics Management.
Mu, H., 2020. Research on the Exploration and Development Countermeasures of New Retail
Business Model. Academic Journal of Business & Management, 2(5).
Kawaguchi, K., 2021. When will workers follow an algorithm? A field experiment with a retail
business. Management Science, 67(3), pp.1670-1695.
Sokol, O., Holý, V. and Cipra, T., 2021. Customer and Product Clustering in Retail Business.
In Recent Developments and the New Direction in Soft-Computing Foundations and
Applications (pp. 529-537).
Springer, Cham. Prasetyo, P. and Dzaki, F., 2020. Institutional performance and new product
development value chain for entrepreneurial competitive advantage. Uncertain Supply Chain
Management, 8(4), pp.753-760.
Noga, A., Jarzębowski, S. and Maciąg, P., 2020. Co-Productivity as a New Value Theory in
Value Chain Analysis. Central European Management Journal, 28(1), pp.52-65.
Nudurupati, S.S., Garnego, P. and Bititci, U.S., 2020. Impact of the changing business
environment on performance measurement and management practices. International Journal of
Production Economics, p.107942.