Business Environment Analysis Report for Global Tech's Fast Food Chain

This report provides a detailed analysis of the business environment of Global Tech, a global manufacturer that has recently acquired a fast-food chain. The report begins by identifying the purposes of different types of organizations and then examines how Global Tech meets the objectives of its stakeholders, including employees, customers, government, shareholders, and communities. It then explores the company's responsibilities and strategies for meeting these stakeholder objectives. The report further delves into how economic systems allocate resources, discussing command, free enterprise, and mixed economies. It assesses the impact of fiscal and monetary policies on McDonald's and KFC operations in the UK and evaluates the influence of competition policies and regulatory mechanisms on KFC's UK activities. The report concludes with an examination of market structures, organizational responses to market forces, and the impact of the business and cultural environment on McDonald's. Finally, it considers the significance of international trade and global factors on Millie's Cookies and Southern Fried Chicken, as well as the influence of EU policies on these businesses.

Business Environment

Table of Contents
Introduction..........................................................................................................................................3
Task 1....................................................................................................................................................3
1.1 Purpose of different organizations.............................................................................................3
1.2 Extent to which Global Tech meets its stakeholders' objectives................................................3
1.3 Responsibilities of Global Tech and its strategies to meet its stakeholders' objectives.............4
Task 2....................................................................................................................................................5
2.1 How economic systems attempt to allocate resources ..............................................................5
2.2 Impact of fiscal and monetary on UK operations of McDonald's and KFC .............................6
2.3 Evaluating impact of competition policy and other regulatory mechanism on UK activities of
KFC. ................................................................................................................................................6
Task 3....................................................................................................................................................7
3.1 Market structures and how they determine output and pricing decisions of companies
business ...........................................................................................................................................7
3.2 Ways in which market forces shape organizational responses ................................................7
3.3 How business and cultural environment shape behaviour of McDonald's ...............................8
Task 4....................................................................................................................................................8
4.1 Significance of international trade on Millie's Cookies and Southern Fried Chicken.............8
4.2 Impact of global factors on Millie's Cookies and Southern Fried Chicken ...........................9
4.3 Impact of EU policies on Millie's Cookies and Southern Fried Chicken ..............................9
Conclusion..........................................................................................................................................10
References...........................................................................................................................................11

INTRODUCTION
Business environment of an organization consist of internal as well as external factors that
significantly affect its operations. External factors are those events that are difficult to predict and
are out of companies control. Internal factors re those vents that take place within an organization
and largely affects its business (Price and Chahal, 2006). The present report explores important
aspects of business environment of Global Tech which is a private limited company and global
manufacturer of consumer electronic products. The company has recently diversified its business
and acquired a new fast food outlet chain. The present report features different aspects related to
national and international business environment which play important role in formulating sound
operational strategies to sustain its new fast food chain business in target markets.
TASK 1
1.1 Purpose of different organizations
There are many type of organisation which has different type purpose in the market.
1. Private organization : KFC is a popular fast food chain that has its presence in multiple
nations. The main purpose of KFC is to provide good food to global consumers to make
them happy and satisfied (Porter, 2008). In addition to this, it also aims to increase its sales
and profitability by preparing food which can be enjoyed by consumers throughout the
world.
2. Government organization: These organizations are owned and exercised by the government
of UK. For example Transport For London (TfL) is a local government organization which
is primarily responsible for facilitating transport system in London. The main purpose of
Transport for London is to implement transport strategy and manage transport services to
people of London. TfL include London Underground, Tfl Rail, London Overground and
London Buses. Apart from management of transport in London, TfL also aims to construct
transportation infrastructure such as Cross rail lines across the region.
3. Charity Organizations: Charity organizations are non profit organizations that aim to achieve
philanthropic goals and social well-being. Activities of charity organizations are centred
around educational, religious and community interests activities that are philanthropic in
nature (Gavi's Mission, 2016). One of the biggest charity firm of UK is Gavi Alliance. The
main purpose of this firm is to provide underused vaccines to children who live in the most
deprived areas of the world.
4. Public organisation: In this type of organisations, maximum shares are contained by
government. Other shares are taken by private or other firm in the market. Main motive of
public organisation is to provide socials service and earning profit from consumers in the
market.

1.2 Extent to which Global Tech meets its stakeholders' objectives
The major stakeholders of Global Tech include customers, employees, global communities,
suppliers and investors. The company's operations have significant impact on its key stakeholders.
The extent to which the new fast food chain business of Global Tech can meet the objectives of its
stakeholders is described in the following points:
 Employees: Employees of the new fastfood bsiness of Global Tech play very crucial role in
executing strategic activities which are formulated by the top management of the company.
Staff of the firm directly affect the efficiency and profitability of the new business of Global
Tech. Therefore it is the prime responsibility of the company to meet the objectives of
employees to increase their job satisfaction which is very curial for retaining good
employees. The prime objectives of employees include job satisfaction, recognition, job
security and personal development.
 Customers: Consumers are the end users of the company's products and services. In a fast
food business it is very cardinal to meet the needs of consumers by developing quality
product and services. Consumers always look for value for their money. Therefore, the new
fast food business can meet its customers objectives by developing quality food items and
services to enhance the satisfaction level of consumers.
 Government: National and local governments are major players in the business environment
for the new fast-food business of Global Tech. The governments play monitory and
regulatory role to influence company's external business environment (Thompson and
Martin, 2010). In order to meet objectives of government bodies the new fast food business
of Global Tech is required to abide by various laws, policies and codes of practices
formulated by central or local governments.
 Shareholders: Shareholders are those entities that have a stake in the new business of Global
Tech through their share ownership. These shareholders look for better earning through sale
of shares or by dividends. The new fast-food business of Global Tech can meet the
objectives of shareholders by increasing sales to generate higher revenues.
 Communities: The new business of Global Tech is responsible towards local or inter
national communities such as environmental communities (Wetherly and Otter, 2014). In
order to meet the objectives of these communities the new fast-food business unit of Global
Tech is required to develop strategies that are focused to reduce the impact of business
activities on natural environment.

Figure 1Stakeholder identification
(Source: Porter, 2008)
1.3 Responsibilities of Global Tech and its strategies to meet its stakeholders' objectives
In order to explain the responsibilities of Global Tech's new fast-food business and strategies
to meet the objectives of its key stakeholders following points can be elaborated:
Responsibilities of Global Tech:
 Consumers: The Company has a prime responsibility to develop effective strategies to meet
the objectives of its consumers.
 Employees: It is the responsibility of new fast-food venture of Global Tech to provide good
working environment to its staff so that they can work with greater efficiencies.
 Government: The new business of Global Tech is held accountable for complying with
government regulations, acts and codes of practices in order to r\n its business in atonal or
global markets.
 Communities: Global Tech has major responsibilities towards communities in which it
operates its fast food business.
Strategies to meet stakeholder’s objectives: For its new fast food venture the company can
formulate effective strategies to develop menu that contain food items as per the choices and
interests of end users. The pricing strategies of the company should be in line with economic status
of target consumers. In order to increase the productivity of its employees the company need to
formulate and implement strategies that aim to impart effective skills and knowledge to staff. In

addition to reward strategies can be developed to motivate employees (Shokri and Nabhani, 2015).
The new fast-food business of Global Tech is required to form strategies related to organization
procedures and policies which would be line with legal framework in a business environment. For
example: In order to run operations in UK markets the company need to abide by Health and Safety
at Work Act 1974 to prevent accidents and mishaps in its workplace. The company can formulate
strategies to protect natural environment of a place in which it runs its operations. For example by
using biodegradable material in food packing it can positively impact natural environment.
TASK 2
2.1 How economic systems attempt to allocate resources
In order to explain the way in which economic systems make attempts to allocate resources
effectively following economic models can be referred:
Figure 2Economic system
(Source: Drucker, 2014) Command Economy: In command economy the resources are allocated primarily by
government of the nation in which organizations are operated. The resources are also
controlled by government bodies. The system is more responsive to political needs. Free Enterprise Economy: In free enterprise economies focuses on allocation of resources
by setting up interaction between self-directed and free market drivers (Upton, 2010).

According to this, the products are determined by producers and its consumption depends
upon consumers.
 Mixed Economy: In mixed economies resources are allocated privately. This economic
system contains characteristics of both capitalism and socialism. Government is involved in
planning the utilization of resources. Wealth is distributed by employing taxation on
privately owned businesses.
Figure 3Type of economic system
(Source: Porter, 2008)
2.2 Impact of fiscal and monetary on UK operations of McDonald's and KFC
Fiscal and Monetary policies of UK government significantly affect the operations of
McDonald's and KFC who are the top competitors of fast food business of Global Tech as per the
given scenario. In order to access the impact of both monetary and fiscal policies on fast food
organizations business is elaborated in the following passage:
The monetary and fiscal policies in UK are formulated by Bank of England's Monetary
Policy Committee to control the flow of money in UK economy. By changing the bank rate it can
control inflation and significantly affect the demand and supply for goods and services in UK
economies. For example if bank rate is increased then the business organizations will not be able to
lend money from banks for expansion. This also affect the business activities of fast-food
companies like KFC and McDonald's. These fast-food giants face hard times in dealing with price
of raw materials in case of food inflation. In addition to this, the increased bank rate negatively
impact its procurement practices (Hamilton and Webster, 2012). The supply and demand of
products and services of McDonald and KFC are negatively affected by increased prices of raw
materials. Apart from this consumers also tend to limit their spending on fast-food products and
services in case of inflation. This in turn negatively hit the sales of KFC and McDonald's in UK
markets.

2.3 Evaluating impact of competition policy and other regulatory mechanism on UK activities of
KFC.
Competition policies play important role in improving competition in UK markets. These
policies are important in ameliorating the efficiency of various organizations of different sectors
that operate in business environment of UK. In order to evaluate the impact of competition policy
and regulatory mechanism on UK business operations of KFC following poits can be discussed:
Impact of Competition Policies of UK
KFC is the most popular fast-food restaurant which operates ion a very competitive business
environment. To beat rivalry from other fast-food outlets it need to formulate strategies that are in
line with competition policy of UK to sustain its operations in UK markets and promote fair
competition in UK economies. The competition policies in UK are based on four major policies that
include market liberalization, state aid control and antitrust and cartels and merger control to control
competition among companies which are into same sector (Kim, Lee, Chun and Benbasat, 2014).
These policies regulate the pricing policies of KFC to safeguard the interests of consumers.
Therefore, KFC is required to effectively implement competition policies of UK to run its business
smoothly and competitively.
Impact of Regulatory Mechanism in UK
Regulatory mechanism include regulations enforced by UK government on the operations of
KFC. Some of these regulations are associated with codes of practices, fair trading, ecological
policies, etc. to regulate pricing band marketing activities of fast-food companies in UK. It can be
evaluated that regulatory mechanism can significantly affect the level of competition for KFC as
policies are same for its rivals as well.
TASK 3
3.1 Market structures and how they determine output and pricing decisions of companies business
Market structures play very vital role in determining the pricing as well as production
decisions of organizations in UK. There are different markets structures that affect the operations of
new business of Global Tech in various markets. These include monopoly and other is oligopoly. In
monopoly markets the number of firms is higher and all these organizations share small proportion
of market share. For example the new fast-food company of Global Tech need to share its market
share with other established fast-food restaurants such as KFC, Burger King, McDonald's. In this
market structures companies do not have much impact on pricing and output decisions.
In oligopolistic market structures the number of firms are less who together decide the prices
of products and services to be delivered in a market. These companies together control the supply of
their products (Brinkman, Navarro and Harper, 2014). In addition to this in oligopolistic markets

the sellers are more and end users are less. Thus, the sellers try to keep the prices low to attract large
number of customers and to increase the sales of their product and services.
3.2 Ways in which market forces shape organizational responses
Market forces play important role in displaying link between demand and supply within UK
markets. Organizational responses can be referred to reaction given by an organization to different
economic and market situations. Market forces play very crucial role in shaping organizational
responses which can be explained by using the illustration of McDonald's. The popular fast food
company carry out proper market research to understand important market forces and then
formulate sound strategies to reduce the gap between demand and supply. The company accurately
assess market demand for its products and services in UK markets. This helps the company in
meeting the expectations of its valuable customers by making products in a timely manner and in
correct amount. Producing food in right quantity and in stipulated time has some financial gains as
the company can save pounds by reducing food wastage. It can be observed that McDonald's is
making profits by correctly assessing its margin. This is very beneficial in reducing stocking of food
and generating revenue for its business. Another illustration can be stated to show the relationship
between market forces and organizational responses in different economic scenario. The
profitability of KFC was negatively impacted in Indian markets as the company before entering into
the market did not effectively carried out market research. This costed huge sum of money and legal
implications to KFC. Thus, from these two illustrations it can be summarized that market forces
need to studied carefully in order to shape organizational responses to make business successful in
chosen markets.
3.3 How business and cultural environment shape behaviour of McDonald's
McDonald's operates its operations in two different environments. One is economic and
other is cultural environment. Both these environments significantly affect the organizational
behaviour of McDonald's The fast-food company operates in more than 119 countries of the world
and its operations are greatly impacted by economic as well as cultural environments which prevail
in these nations. The economic environment of nations consist of economic policies, conditions and
systems (Groza, and Ragland, 2016). On the contrary the cultural environment encompasses social,
demographic , culture, values, beliefs, traditions and attitudes of people who belong to those
nations. For instance: The per capita income of UK customers is higher as compared to Indian
customers. Thus, McDonald's need to keep the prices of its products and services low in Indian
markets to provide the value for money. On the contrary the company will sell its products and
services comparatively at higher prices in UK markets. Besides this the company cannot include
beef in its food preparation in Indian markets as cow is considered as a sacred animal in Indian
mythologies.

TASK 4
4.1 Significance of international trade on Millie's Cookies and Southern Fried Chicken
International trade play important role in growing the potential of UK business organizations
such as Millie's Cookies and Southern Fried Chicken. Millies Cookies is UK based retail bakery
chain which specializes in cookies, muffins and hot drinks (Millie's Cookies, 2016). The company
has number of store in UK as well as in other countries like France, Germany, Egypt and Hong
Kong. The bakery retailer has to abide by different regulations of international trade to run its
operations in different economies. Similarly, Southern Fried Chicken is UK based fast food chain
which operates in UK as well as in 70 different nations across globe (Southern Fried Chicken,
2016). In order to discuss the significance of international trade on these two British based
companies following points can be referred: Increased potential: Millie's Cookies and Southern Fried Chicken can increase their
potential by selling their products in global markets other than UK markets. More sales
ensur greater profitability for these companies.
 Production cost: It can be analysed that by trading in international markets the companies
can have better opportunities for lower production costs. For example by trading in China
both these companies can save millions as the labour and production processes are available
at very cheap rates.
4.2 Impact of global factors on Millie's Cookies and Southern Fried Chicken
There are several global factors which affects the overall business operations of both retail
chain Millie’s Cookies and fast food chain Southern Fried Chicken such as: Political factors: Within the UK there are various policies framed by government
regarding consumer shopping as well as their health. Further, due to the changing
policies both the organization might leads to face several difficulties while serving their
consumer such as employment policy, health and safety etc. They must rely under these
policies in order to provide quality services to their customers. All the health and
hygiene related factors must be taken into consideration so that consumer trust can be
gained.
 Economic factors: At the time of economic downturn as well as recession Southern
Fried Chicken fast food center can increase their prices within their menu. It can be
reduce their number of customers and also decrease their satisfaction level.
 Social factors: It is considered as a most crucial factor as meet out the changing needs of

customers are becoming the most crucial task for companies these days (Brinkman,
Navarro and Harper, 2014).Providing those services as per there are highly difficult.
 Technological: Due to the advancements in technology whole business operations of
both the cited firms can be affected. They are able to go through more advanced and
quick services as well as related to billing procedures as well as order tracking etc.
Further, it also helps them in developing better relations with customers by connecting
them through various social media sites.
4.3 Impact of EU policies on Millie's Cookies and Southern Fried Chicken
Other than UK's legal policies, European Union (EU) also play important role in
influencing the operations of Millie's Cookies and Southern Fried Chicken. After joining EU both
these companies are required to follow policies and regulations which are same for all EU countries.
Under EU relations all UK based companies including Millie's Cookies and Southern Fried
Chicken can trade its products with other EU nations without any barrier (Shokri and Nabhani,
2015). If these two companies have licences of trade that they can easily operate their businesses in
other EU countries.
CONCLUSION
From the above report it can be concluded that it is very crucial for organizations to
comprehend business environment. By identifying internal and external business environment
companies can prepare sound business goals and objectives to run their operations in target markets.
There are various legal and regulatory mechanism that affect business activities of organizations in
national and international markets.

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