Business Environment Analysis Report: Iceland Supermarket - BUS101

This report provides a comprehensive analysis of the business environment, focusing on Iceland Supermarket. It begins with an introduction to the business environment and its significant factors. Task 1 examines different types of enterprises, with a detailed look at Iceland Supermarket, and identifies key stakeholders and their roles. Task 2 delves into the economic systems, including command, transitional, and free enterprise economies, and discusses monetary and fiscal policies. It also explores competitive policies and protocols within the UK market. Task 3 analyzes market structures such as perfect competition, monopoly, oligopoly, and monopolistic competition, explaining their impact on pricing and output. Task 4 considers the impact of political, social, technological, environmental, and legal factors on Iceland Supermarket. The report concludes with a summary of the findings and references.

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1...........................................................................................................................................1
1.2...........................................................................................................................................2
1.3...........................................................................................................................................3
TASK 2............................................................................................................................................4
2.1...........................................................................................................................................4
2.2...........................................................................................................................................5
2.3...........................................................................................................................................5
TASK 3 ...........................................................................................................................................6
3.1...........................................................................................................................................6
3.2...........................................................................................................................................7
3.3 .........................................................................................................................................7
TASK 4............................................................................................................................................8
4.1 ..........................................................................................................................................8
4.2...........................................................................................................................................9
4.3.........................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
A structured and well formatted combination of all significant factors i.e. internal and
external constitutes the business environment. These components closely influence the
surroundings of an enterprise. Besides this, these inside and outside factors affect and influence
the structure of the entity the most and also play a vital role in the operational activities of the
corporation (Morrison, .2011). The present report is based on Iceland Supermarket (IS) which is
a pledged retailer and committed to the consumers to provide safe and healthy food. Good food
substance is always the main motive of the quintessence. The further analysis is conducted to
examine the significance of the purpose of the company. . Further, it will also shed light on the
role of an entity in its marketing segment and also focuses on the significance of international
factors which configure the national business activities.
TASK 1
1.1
There are different types of enterprise which operate and exist in the nation. The varied
range of trade units that operates within countries are detailed below: Sole Proprietorship – These kinds of business are carried on the basis of individual
capacity.. It is owned and controlled by the single owner who takes whole responsibility
of managing collective operations.

 Partnership – It is a venture unit that is owned and controlled by two or more partners.
The partners manage the operational activities and share all the profits and losses
(Keillor, 2013). Public listed company – The established unit is managed by the top management and
owned by the venture capitalists. It is listed as a company whose real owners are equity
holders. A company whose securities are traded in the stock exchange and these shares
can be bought and sold by anyone in the public company. Objective of this is profit
maximisation and wealth of society. Government – It improves quality and cost effectiveness of public services, increases
wealth of economy and maintains a macroeconomic framework with low inflation.
Iceland Supermarket (IS) – It is a private retail entity and it provides all types of food
services to the consumers is a retail firm which provides various products to the general public.
The aim of it IS is to deliver prominent services to the clients so that they do not switch to other
brand.
KFC – The main purpose of KFC is to deliver quality and different variety of chicken to
the consumers so that they can enjoy fast food. It was one of the first fast food chains to expand
internationally (Guay, 2014).
Transport for London – It is a statuary corporation and a local government body
responsible for most aspects of the transport system. 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 this is to
treat patients suffering from different issues. It raises money through donation, events, retail and
corporate, partnership and community fund raising.
1.2
IS has been managing all the trade practices in an effective manner with the support of all
the 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 the resources of the enterprise. The organisation is delivering proper
assistance to the consumers and all results in the favour of customer satisfaction. Along with this,
IS also makes sure that consumers are not cheated from any ground and fair indulgence are
provided to them (Sinay, 2014).

Employees play an important role in Iceland supermarket in providing services to their
clients. These types of assistance need a proper feedback which tries to manage the financial
earnings and profitability statements. For the entity it is a milestone to ensure about the welfare
of the members. The enterprise focuses on the elements which depicts the importance of staff
members in the IS. It is integral to penetrate the proportionate roles and responsibilities for all
the working stiff so that they can perform there assigned duties effectively. Organisation needs to
establish the appropriate business relationship with transitory. . Some of the capital ventures are
as follows: Direct holders– The share owners who directly participate in the operations of the entity.
They are the one who design the innermost and the outermost frames of company on
which the operations are being performed like employees, managers, owners etc. Indirect holders – They stay near the enterprise but they don't have direct involvement
and they have some sort of vigorous encounters. The most pertinent holder is society in
which the establishment is active (Bataglia and Meirelles, 2009). Employees – They are the backbone for performing the business activity. The main
motive is to perform the task and fulfils the relevant objectives with inculcate motives.
 Financial structures – It provides the financial assistance which helps the entity to meet
the compulsions and also help them to check on the institution about their proper
utilisation of funds. Along with this analyse about their risk and returns management
factors.
1.3
IS is capable for managing business operations in a proper manner to achieve maximum
and possible outcome which should stabilise the long term casting ballot. Stakeholder should be
administered with all appropriate invocation and its paramount advantage provided to them so
that they can access the books of accounts, financial statements in the annual general meeting
organised by the business at the end of every financial year. Institutions have the transparency
and fair conditions in the case of members associate with it can examine the internal corporate
working (Bataglia and et. al., 2009). The main purpose of the enterprise is to earn profit. Various
acts such as acts of justice charity work fot the betterment of the society. The ethical way for
handling the business for earning maximising the profits responsible activities are globalisation
effect, education ethics, fair trade, legal ethics, local community, research ethics, social work

ethics etc. . Entity should adopt the approaches of performing ethically and morally which
ensures the proper allocation of resources, distribution of dividends among its owners in a
legitimate manner. Everyone who sustain with the operational activities should constrain some
position within. In the IS, need to understand the social responsibility, the main task and the
objective for the business is not to generate extra income and to become rich and to earn the
maximum profit.
TASK 2
2.1
The nature of the 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 dilemma in the context of society.
Under legal procedures and applied norms by law operational activities should be performed.
Consideration of new structures of enhancement of working plight (Porto and et. al., 2009).
Benefits and problems are the two basic components of the economic activity.
IS also faces these types of situations and they should be prepared with the strategies to
handle this. Intrinsic authorities tries to fulfil all the demands inside the economy. The basic
elements of economic problem are discussed below:
Command Economy – it is the government that decide what to produce, hoe to produce and how
to distribute the goods and services within the economy. It is often associated with the political
system of communism (Bohdanowicz, Zientara and Novotna, 2011). A command economy
works in contrast to a free market economy. In this goods and services are produced by the
private enterprise with distribution according to market forces.
Transitional economy – it undergo economic liberalisation where market forces set prices rather
than a central planning organisation and trade barriers are removed, privatisation of government
owned enterprise and resources and the creation of the financial sector to facilitate the movement
of private capital.
The most crucial form of economic system is the free enterprise economy. This form of a system
is free or rather shielded from government interference. The economy promotes free flow of
ideas and implementation.

2.2
The two basic components which affects the financial system of an economy are:
Monetary and Fiscal policy which controls the movement of money. The purpose of both the
policies are the same but with different scope. Stabilise the economic growth, stiffen the price
level, balance of payments etc. are the important aspects. Financial policy which refers in
controlling the supply of money in the nation. On the other side the main aim of fiscal policy is
to arbitrate the tax reforms policy is formulated, preparations of the budget coordinated etc. repo
rate and reverse repo rate are comprised in the terms of money which manage the flux in the
market which influence on the company's operations (Bonilla-Priego, Nájera and Font, 2011).
Policies are framed for evolving the tremendous profits and utilise them in the entity where as
fiscal policy can intensify the accomplishment of nation. On the contrary financial concept
implicate the tax reforms which associate with the level of expenditure that higher authorities
implements. Therefore, it is appropriate that fiscal policy of an economy with the budgetary
facet. It is a fact that budgetary attitude which helps to gather the resources. It is a fiscal policy
that assists the Iceland Supermarket to determine the tax ratio and its impact on the profit of the
entity. The IS should adopt the techniques which provides the platform to perform in the global
market and help the enterprise to analyse the profits, improvising their techniques of budgeting.
Business administration helps 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 by the
organisations that operate in UK market place. The approach also ensures the market will work
well for consumers by assuring fair competition and trading. Iceland Supermarket has been
considering this act and this accommodates in managing the business entity in an adequate and
legal manner. Along with this, competition commission is also followed up by IS at the same
time, which is a public body and other judicious purposes.
It can help the trade enterprise to facilitate an atmosphere of healthy competition among
all the similar entities. Where as, norms defined by the European commission are also taken care
of., 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. Institution needs to comply with these rules very preciously and if not followed, then strict
action can be taken against it for non compliance with rules and regulations.
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 from decades. Due to this market structure, IS is allowed to trade freely with the
other countries and can alter the factor of price depends on the quantity of the product demand in
the retail. Its response to demand is remarkably high and purchases commodity when demand
arrives. Along with this demand forecasts are planned therefore, goods are bought accordingly.
So, organisation follows a provisional approach in responding to a demand.
Monopoly market – In this market, there is only one seller. It has the advantage of
capturing the whole industry and enjoy the privileges of king. Prices keep fluctuating and this
can only change the operations of the enterprise (Chan, 2013). Monopoly is a favourable
condition since no other firm 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 change the output level. It comes between monopoly and perfect
competition. 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 power of the enterprise. In these type of strategy, organisation are not able to
make the 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. For the
Iceland Supermarket it is necessary to bring the attention to the competitive aspects inn order to
introduce the new products in market place. The eminent factor that forms the response of the
enterprise is demand and supply feature, as when the crowd demands for more so the business
must have the capacity to cope up with the demand to fulfil as per the needs. Purchasing power

make it possible for the people to buy the things so that it increase the demand factor. Buying
power at the same time also determines the elasticity according to the flow of resources that
prevails in the nation. Furthermore, the elasticity of substitute products also specifies the
activities of Iceland Supermarket and the retail industry of UK is comprised of large number of
competitors. The competition has been increasing as there re substitutes present that are
innumerable. It further changes the probability of consumer switching to other brands therefore,
IS has to work on its products and services to retain in the market and maintain the brand image.
Changes in the quantity demanded or the supplied of a change in the existing price (Chan, 2009).
Changes in the demand and supply in a related factor other than that price which is existing in
the market. The producer can use with the supplier over the surplus which is exceeding the
minimum cost of producing the products. Market equilibrium is that which denotes the supply
equals to demand and there is no excess or shortage. It supports to determine the equilibrium
price and quantity. Retail disequilibrium is that demand and supply are not equal at any price in
the market, there is a excess or shortage of the price. It supports to determine the size of shortage
and increment in the price.
3.3
Organisational behaviour has an immense impact on the business and the cultural
environment. Iceland Supermarket has been functional in competitive market place although
different cultural aspects have been considered by the firm to fulfil the consumer needs in a
satisfactory manner. Political factors affect the business of UK and it delineates the internal
activities. Simultaneously policies are to be kept on top most priority (Chen and Peng, 2012).
The corporate has to give more significance to the cultural aspects and for that each working stiff
should be given equal importance and centre of attraction being the cultural and social aspects,
which can assist Iceland Supermarket for managing the social support at all the stages.
Economic affluence of the trade has been intensifying the flow of resources in the
husbandry is pertinent and it helps in managing the demand and supply aspect. This shows the
business process of Iceland Supermarket. IS has to use the technological resources in
magnificent numbers which gives way to innovation and the creativity which helps to increase
the productivity. The firm has been trying to minimise the portion of wastage of resources which
shows the enterprise thinks from the environment point of view also. It also helps in promoting
the value of corporate in the eyes of consumers. Managers should care for the behaviour of

Iceland Supermarket members progresses and employee behaviour is formed by the social
communication. Cultural environment is to influence on manger when making a decision. The
organisational culture of IS is to define the set of principles, rules and values which are protected
by the employee behaviour that symbolizes the features of Iceland Supermarket (Darnall and
Sides, 2008). Operations in the entity is affected by the organisational culture, direction and
management style of the environmental changes as employee inspiration. Behaviour and
emotions of employees, ethics, attitudes and effects in the work, working in groups,
communication with the employees, rules and policies of the enterprise. Direction of the working
members, decision making for the entity, creativity in the work and organisational culture.
TASK 4
4.1
International trade is a significant of all nation, otherwise, it would not be possible to
develop or produce all products and services within community. All the products can't be made
available by the country and thus, it needs to trade the commodities from other nations. When
any enterprise enters in the 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 (). The operating activities of the
organisation in UK embarks in international trade because it develops the extent of acquiring the
greater profits and as a result, competitive edge can be attained. This means that the enterprise
has grown its functional activities in the global market place. Oversees market seems to be
beneficial for IS so that they can grow and develop the image of the enterprise and more
consumers will be attracted towards the same. International trade can create the few issues to the
corporate but it would be definitely increase the market share and growth potential. Iceland can
make huge use of technological aspects by entering into global market place.
If IS enters into global market then the trade can get the opportunity to bring the various
products in different variables to all the other divisions of consumers (El Dief and Font, 2010).
This can make a wider choice of array which will not only improve their quality of life but also
helps in the developing of nation. Along with this, international trade promotes the 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 overseas business can

assist the IS to generate more opportunities for employment so, it will help the country to bring
down their unemployment rates. At the same time, international trade can be helped by managing
the corporate of UK to make optimum natural resources and wastage of resources can be
avoided.
4.2
There is a huge impact of globalisation on UK business organisations. Globalisation
means institutions are performing in more than one nation with the targets of earning higher
profits, increasing scope of trade and the wealth of an 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 in the new market. Global
forces like policies and strategies of companies can impact the existing work processes and can
also hamper the interest of the 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. 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 can 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 corporate new techniques and innovations should be made in
use (Han, Hsu and Sheu, 2010). Further, IS can face issues concerned with the 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 affect the capital
formation rates with the process of growth. Under the foreign trade, when a country tends to
specialize in a new 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 the policies in the European
Union (EU) however on the other hand, this could also lead to consider numerous policies for the
administration of the trade. UK businesses have to maintain all types of rules. All EU nations
have some European Union laws that they have to follow while running their business (Heras-

Saizarbitoria, Molina-Azorín and Dick, 2011). 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
IS 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. The policy is also
beneficial for the enterprise as the corporation will be able to enter in the competitive market
without facing any issues 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 (Hu, 2012). So, the enterprise will 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. So, Iceland Supermarket have to oblige different
policies and norms for adequate business operations.
CONCLUSION
The above analysis helps to understand the organisational purpose of the various
corporations, for instance private companies, government, public companies and voluntary firms.
Furthermore, the responsibilities of IS towards the stakeholders is explained. Also the needs,
desired, 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.

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