Impact of Macro Environment on Iceland Supermarket Business in the UK

This report examines the application of information and technology management within the context of Iceland Supermarket's operations in the UK. It begins with a macro-environmental analysis, assessing political, economic, social, technological, environmental, and legislative factors influencing the company's business environment. The analysis highlights how these external factors, including government regulations, economic conditions, and consumer trends, affect Iceland Supermarket's strategies. The report then delves into the impact of these environmental factors on the supermarket chain, emphasizing the importance of adapting to changes in the business landscape. Finally, the report identifies economic and social factors as the most critical macro-environmental influences, underscoring their significant roles in shaping the company's performance and strategic decisions within the UK market.

Managing Information and Technology
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Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
1. Macro environment analysis on the business environment of Iceland in the UK.......................3
2. Explaining how external environment will affect Iceland Supermarket in the UK.....................5
3. Two most important macro environmental factors that will most impact of Iceland
Supermarket business......................................................................................................................6
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................8
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INTRODUCTION
Information and technology are the most important resources for an organization to take
competitive advantage in the market place (Richard, 2016). It is very essential for the company to
manage both of them in strategic manner because if they are not well managed then it might result
into a big loss in the firm. Managing information and technology helps in planning, designing,
optimizing, operation and control of various operational activities. These ensure the growth of the
company and eliminate duplication of data (Saunders, Chan and Chan, 2002). The present report is
based on managing information and technology and to understand its importance, the UK based
retail supermarket i.e. Iceland is taking into the consideration. The following research will define
the role of information and technology system in business and assessment of business environment
in which cited business is operating its operational activities.
TASK 1
1. Macro environment analysis on the business environment of Iceland in the UK
Iceland is a British supermarket chain that focus over the sales of frozen food items such
meals and vegetables. It also sells non frozen grocery products like meat, dry goods, dairy items etc.
The company is having about to 18% share of the UK food market (Galliers and Leidner, 2014).
There are various external factors that make impact on the growth of the business of Iceland
Supermarket. To analyze those effects, a macro environment assessment can be carried out which is
as follows:
Political factors: Iceland Supermarket is operating in more than 10 countries with 1000+
stores. Thus it’s highly affects the performance of the company which also influenced by the
political and legislative conditions of those nations in which firm is running its business. The
political factors that make impact on business environment of Iceland in the UK are tax rates, act of
legislation and stability of government. From the employment legislation point of view, the UK
government encourages retailers to provide maximum opportunities of job to the local community
(Davenport, 2013). This opportunity can be varied from flexible, lower-paid and locally-based jobs
to highly-skilled, higher-paid and centrally-located jobs. It helps in meeting the demand of work
between different population categories such as students, working parents and senior citizens.
Iceland Supermarket has very well understood that retailing industry has made the greater impacts
on jobs. For this, the company has tried to give more employment to the students, elderly and
disable people at low wages rate. Although the retail industry consists high level of employees’
turnover issue but the workers of this sector shows high level of loyalty towards the retail
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companies.
Economic factors: This elements highly influenced demand, profits, costs and prices of the
company and its products in the marketplace. In this, high unemployment level in the UK is one of
the most influential aspects because it negatively affects the demand of good in the marker. Due to
this, the organizations need to minimize the production of those items (Valacich, Schneider and
Jessup, 2012). The economic factor is outside the control of Iceland Supermarket and sometimes, it
positively or negatively affects the performance and other business operational activities. Still
international retail market is growing and in the future, this opportunity will contribute greater
amount of profit level of the cited organization. The result of this, it will modify the economic
situation of the UK in positive direction (Bulgurcu, Cavusoglu and Benbasat, 2010). But, right now,
firm is highly depending on the domestic market for the growth and other competitive advantages.
But, in a case, if the UK economy slowdowns due to any reason then it will increase the risk of
market concentration for the UK retail industry. This will make impacts on performance of Iceland
Supermarket in terms of decrease marker share, profit level, closing of stores etc.
Social factors: The present culture trends of British consumers indicate that they have been
taken one steps towards one stop to bulk purchasing. This has been brought the variety of social
change in the local community. Due to this, Iceland Supermarket has increased the number of non
food and food items lines for the customers. Along with the changes in demographic such as
increase number of female workers, aging population, develop the trends of instant food making etc
defines that the retail organizations of the UK are starting focus over added value products and
services (Pearlson, Saunders and Galletta, 2016). Beside this, the retail firms are emphasizing on
own-label share of the business mix that includes supply chain and other operational activities that
will bring improvement in the performance of the business. In addition to this, it will cut down the
various costs of the business activities that will decrease the final prices of products and services. In
this direction, Iceland Supermarket has taken decision to tie up with the new suppliers. On the other
hand, the population of the UK becomes more aware towards their health and their attitude towards
consuming fat and unhealthy food becomes decrease (Sittig and Zuckerberg, 2010). So, on this
change, Iceland Supermarket has decided to offer organic food items to the customers.
Technological factors: It is major fact that influenced the growth and development of an
organization. The advancement in the technologies delivers benefit to both customers and firms in
different manner. These are raise in customer satisfaction, more convenient shopping practices, fast
shipment, make products more customized etc. In this context, Iceland Supermarket has adopted
Efficient Consumer Response (ECR) that has made greater shift in the management of food supply
chains (Bilbao-Osorio, Dutta and Lanvin, 2013). Along with this, company has used some other
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techniques at the stores such as Wireless devices, Intelligent scale, Self check-out machine,
Electronic shelf labelling and Radio Frequency Identification (RFID). On the other hand, the
adopting of EpoS (Electronic Point of Sale), EFTPoS (Electronic Funds Transfer Systems),
Electronic scanners etc has made huge improvement in distribution and products stocking activities
of the cited organization.
Environmental Factors: From 2003, the pressure over the different UK industries and their
organizations has increased regarding taking responsibilities of local community. The major
threatening issue for the food retail companies is environmental because it has affected the society
(Jerman-Blažič and Tekavčič, 2012). For this, Iceland Supermarket has started to show concern
towards the following problem by adopting the concept of sustainable business. For this,
organization has begun to cut down the volume of wastage during the operational activities and has
tried to optimize the existing resources in limited manner. Along with this, cited firm has increased
the recyclable materials at the time of packaging of the goods and their handling.
Legislative Factors: The UK government has made various legislations and policies for the
retail industry and thee have highly made impact on performance of the organizations of the
following sector. Food Retailing Commission (FRC) has imposed a Code of Practice on retail firms
by banning to different business practices such as demanding payment from suppliers, changing in
prices of the products without any prior notice etc (Unger and Eppinger, 2011). In addition to this,
the increase competition level in retail industry has created a threat of intense prices wears between
the retail firms. This has generated the strong requirements of the diversification or differentiation
in the products. Beside this, to reduce the monopoly and reduction in buyer power, the UK
government has developed some entry barriers in the cited industry (Borghoff and Pareschi, 2013).
So, in order to follow all legislations in right manner, Iceland Supermarket has lower down the
prices of the goods and offer several other benefits to the customers in the purchase of grocery
products from any Iceland stores.
2. Explaining how external environment will affect Iceland Supermarket in the UK
Iceland is operating its business in globalization environment. There are many political
factors that have made impact on the business of the organization in some in positive and negative
manner. External bodies such as the UK government, European Union (EU), World Trade
Organization (WTO) etc has influenced the working of business operational activities. By seen the
increase unemployment issues in the UK, the government has started to pressurize the retail firm to
raise the new employment opportunities for the local community (Tallon and Pinsonneault, 2011).
This will affect the Iceland Supermarket to take the decision of open the new outlets in the UK and
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other nations. By doing this, company will able to employ the people. On the other hand, as per the
instructions of WTO, the retail firms should make sure that the food being imported is safe with fair
trading. It will influence the working practices of Iceland Supermarket to follow the laws and
regulations or else they could be shut down or fined by the government or other external agencies
(Abdillah, 2014).
Beside this, the social aspects have changes with the time and this thing has affected the
retail organizations operational activities. For this, the impinging of this factor will affect the
success level of cited company in terms of customer satisfactions and survive in highly competitive
retail marketplace for the long time. In addition to this, it will affect the marketing activities of
Iceland Supermarket and will also affect the plans related to future market changes. On the other
hand, there are different laws and regulations have framed by the UK government such as National
Minimum Wage Act 1998, Health and safety at Work act 1974 etc for the employers to consider at
the time of giving employment to the employees (Mookerjee, Mookerjee, Bensoussan and Yue,
2011). The effect of this external environmental factor on Iceland Supermarket is organization will
need to make sure that staff would not face discrimination issues at the workplace. Along with this,
firm will ensure that workers should completely know the contract information of the employment.
By considering the technology factor for external environment analysis, it has determined
that it will affect the operational activities of Iceland Supermarket. For example, the increase use of
new technologies will deliver the benefits to the customers and the organization in terms of increase
consumer satisfaction level, making more customized goods, improve supply chain practices etc
(Borghoff and Pareschi, 2013). On the other side, from the research, it has found that economic
condition level of the UK has increased with the time. So, this will affect the Iceland Supermarket
business in terms of raise the profit and sales level. In addition to this, the presence of organization
is also increasing in international market that will contribute in the growth of the business.
3. Two most important macro environmental factors that will most impact of Iceland Supermarket
business
From the above discussion, economic and social factors are the most important macro
environmental factors that will most impact of Iceland Supermarket business. The reason of
considering economic factor as most essential is because this plays an important role in the growth
of the retail business in the marketplace of the UK. At the economy of the nation grows, it will
influence the level of expenditure of the customers. It will lead to increase the purchasing power of
the consumers (Unger and Eppinger, 2011). The result of this, Iceland Supermarket will able to
generate more sales of number as well as profit amount. But in case, any economic downturn occurs
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in the UK then it will surely make the impact of the business of the cited company in negative
aspects. On the other hand, the retail organizations have provided products and services to the
customers according to their needs and requirements (Sittig and Zuckerberg, 2010). So, it will be
important macro environmental factors that will most impact on Iceland Supermarket business in
the UK. For example, the preferences of the people related to packed food have changed. They have
become more aware towards their health. Therefore, to responds in the direction of healthy
products, it will require for the cited retail organization to deliver healthy food items to the
customers.
CONCLUSION
From the above study, it can be concluded that macro environmental factors have affected
the business of the retail organizations in the UK. These have made impacts on the business growth
and its development on both negative and positive form. So, it has become important for the retail
companies to become aware towards different external environmental elements and has taken the
right step to deal with them.
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REFERENCES
Books and Journals
Abdillah, L.A., 2014. Managing information and knowledge sharing cultures in higher educations
institutions. arXiv preprint arXiv:1402.4748.
Bilbao-Osorio, B., Dutta, S. and Lanvin, B., 2013, April. The global information technology report
2013. In World Economic Forum (pp. 1-383).
Borghoff, U.M. and Pareschi, R. eds., 2013. Information technology for knowledge management.
Springer Science & Business Media.
Bulgurcu, B., Cavusoglu, H. and Benbasat, I., 2010. Information security policy compliance: an
empirical study of rationality-based beliefs and information security awareness. MIS
quarterly. 34(3). pp.523-548.
Davenport, T.H., 2013. Process innovation: reengineering work through information technology.
Harvard Business Press.
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Jerman-Blažič, B. and Tekavčič, M., 2012. Managing the investment in information security
technology by use of a quantitative modeling. Information Processing &
Management. 48(6). pp.1031-1052.
Mookerjee, V., Mookerjee, R., Bensoussan, A. and Yue, W.T., 2011. When hackers talk: Managing
information security under variable attack rates and knowledge dissemination. Information
Systems Research. 22(3). pp.606-623.
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems,
Binder Ready Version: A Strategic Approach. John Wiley & Sons..
Sittig, A. and Zuckerberg, M., Facebook, Inc., 2010. Managing information about relationships in a
social network via a social timeline. U.S. Patent 7,725,492.
Tallon, P.P. and Pinsonneault, A., 2011. Competing perspectives on the link between strategic
information technology alignment and organizational agility: insights from a mediation
model. Mis Quarterly. 35(2). pp.463-486.
Unger, D. and Eppinger, S., 2011. Improving product development process design: a method for
managing information flows, risks, and iterations.Journal of Engineering Design. 22(10).
pp.689-699.
Valacich, J.S., Schneider, C. and Jessup, L.M., 2012. Information systems today: Managing in the
digital world. Prentice Hall.
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Online
Richard, L., 2016. Information Technology & Its Uses in Business Management. [Online].
Available through: <http://smallbusiness.chron.com/information-technology-its-uses-
business-management-51648.html>. [Accessed on 25th October 2016].
Saunders, C., Chan, Y. and Chan, Y., 2002. RAPID GROWTH FIRMS: THE CHALLENGE OF
MANAGING INFORMATION TECHNOLOGY. [Online]. Available through:
<http://iveybusinessjournal.com/publication/rapid-growth-firms-the-challenge-of-managing-
information-technology/>. [Accessed on 25th October 2016].
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