Business and Business Environment: Analyzing Iceland Supermarket

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BUSINESS AND BUSINESS
ENVIRONMENT
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Table of Contents
INTRODUCTION......................................................................................................................................................... 3
LO1................................................................................................................................................................................... 4
P1................................................................................................................................................................................. 4
P2 & M1..................................................................................................................................................................... 7
LO2................................................................................................................................................................................... 9
P3................................................................................................................................................................................. 9
M2............................................................................................................................................................................. 13
LO3................................................................................................................................................................................ 15
P4 & M3.................................................................................................................................................................. 15
LO4................................................................................................................................................................................ 19
P5 & M4.................................................................................................................................................................. 19
P6............................................................................................................................................................................... 24
CONCLUSION............................................................................................................................................................. 27
REFERENCE............................................................................................................................................................... 28
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INTRODUCTION
Business and business environment refers to all factors that affect business process and
activity such as employees, customers, needs and expectations, demand and supply,
suppliers, owners, government activities, technology, and its evolution, etc. The study of
business and business environment benefits in to understand how internal and external
factors possess threats to a business organization as well as how threats can be change into
opportunities for the business (Bohari et al., 2017).
The assignment focuses on understanding how the sum of factors affects different types
and sizes of business. The reports show the difference between all three organizations
according to their size, scope, and structure. The 3 organizations include private, public and
voluntary organizations which are ICELAND (supermarket), NHS trust and CANCER
RESEARCH UK respectively.
This assignment report divided into 2 parts first parts presents the comparison of these
organizations and the second part presents how internal and external factors affecting
Iceland business process through Pestel and SWOT analysis.
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LO1
P1
An organization is a body that consists of multiple people for achieving mutual goals and
objectives. Organizations have a proper structure that shows the interrelationship between
different activities and employees. This part presents the knowledge of the private, public
and voluntary organization and their purpose:
Figure 1: Types of Organization
Source: Ballard et al., 2012
Private Organization
It is a type of organization that manages by individuals and companies and the government
has no right to interfere in its business process unless it is illegal. This is the most
important type of business organization as it contributes so much to the economy of the
country. The main aim and objective of the private organization are to maximize profit and
increase sells (Ballard et al., 2012). The private organization provides very good quality
and effectively satisfy the customer in terms of product quality. The competition is very
high in a private organization as a number of private organization in the UK is very Hugh.
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For example, Iceland is a retail supermarket private business organization that provides
good quality of frozen and non-frozen food and groceries to the customers. It is a
completely private business organization founded by Sir Malcolm Walker; he is the
executive chairman of the business as well. The business has 23,000+ employees and the
main objective is to maximize profit. The business approximately generates £160 million in
a year is only covering the UK market.
Public Organization
A public organization is usually run and manages by the government of the country that
aims to provide good quality services at an affordable
price. The public organization similarly like the
voluntary organization to some extent as their main
objective is to provide goods and services at an
affordable price rather than profit maximization
(Bohari et al., 2017). The service quality is usually
low compared to the private organization but high
than a voluntary organization.
For example, An NHS trust is operated by the government of UK country that aims to
provide good health care facilities to the patients at an affordable cost. NHS focuses on the
welfare of society. Government operates the NHS process through the funds received as a
tax.
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Voluntary Organization
The voluntary organization is also referred to as a not-for-profit organization that focuses
on the identifying needs of individuals, groups, and communities and provide services
according to needs. The voluntary organization is seen as a vital part within the country as
no other organization identifies the needs of individual and society and provides services
according to needs (Borkar, 2013).
For example, Cancer Research UK is a voluntary organization funded by investors to
effectively manage its process. Their main aim is to make the UK country cancer free and
reduce the number of deaths caused by cancer. The organization effectively focuses on the
patients of cancer and provides utmost help in order to treat them. They run the campaigns
that spread the awareness of the causes of cancer and appeal to quit smoking, drinking, etc.
through which cancer develops.
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P2 & M1
The size of Iceland business organization is limited to the UK only but covers most of the
part of the UK as it has 800+ retail stores in the UK. The size of Iceland can be measure
through by its employees to as it has 23,000+ employees working under it. The company is
a very effective supermarket chain and has around 2.2% of the food market share in the UK
that generates around £160 million in a year (Bouckaert et al., 2016).
The size of NHS trust was founded under national health services and community care act
1990. The trusts are public sectors corporations not really trust in the legal sense. There
were approx. 2200 nonadministrative across 470 organizations in the NHS in England.
Cancer Research UK is a voluntary organization that works for the welfare of society. The
cancer research UK is founded in 2002 through the merger of the imperial cancer research
fund and the cancer research campaign. The organization has 3964 employees and 40,000
volunteers in the whole UK that works for social welfare.
MICRO BUSINESS SMALL BUSINESS MEDIUM BUSINESS LARGE BUSINESS
Microbusiness
functions on a very
small level generally
manage by very few
individuals.
The small business
organizations are
basically managed
by owners of the
business and
regulate the capital
invested within the
organization
(Bouckaert et al.,
2016).
The private business
organizations
generally fall under
the medium business
as their aim is profit
maximization that put
these organizations in
this place.
The large business is
generally are public
companies as nature
is very broad and
invested a high
amount of capital in
it.
The condition of a
micro business is
they can maximum
have 6 members
including the owner.
The small business
focuses on effective
planning and
decision-making
that benefits the
The managers and
leaders play a key
part in the decision-
making process and
benefits in growth
The decision-making
is very complex in a
large organization as
the wide structure of
the organization the
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business
organization.
and profit generation
of an organization.
approval of each
department is
required as every
department works
for the benefit for
the business.
In the micro-
organization, the
owner can invest a
maximum of $50,000
and turnover should
be less than
$250000.
The planning is
short term within
the small scale
organization and
involves very
informal activities
and process.
The medium
organization requires
long term planning to
ensure the success of
the business (Bull et
al., 2016).
The large
organizations
eventually require
long term planning
considering all the
important investors
and managers.
Effective planning is
highly required in
order to sustain long
term business.
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LO2
P3
Iceland business has followed hierarchical and divisional based organizational structure
where all divisions are free to take decision with respect to their departments and later
give a precise report to the board of directors (Chen et al., 2014). This structure is very well
suited for the Iceland business this structure makes divisions such as sales department,
purchase department independent.
Figure 2: organizational structure of Iceland retail supermarket
Source: Chen et al., 2014
NHS organizational structure is management based and hierarchical that benefits
organization in effective functioning and organizing the resources and work activity. NHS is
spread all around the UK for which it is really necessary to effectively manage the process.
With the help of hierarchical and management based organizational structure, the working
process of NHS is effectively managed (Craig and Campbell, 2012).
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Figure 3: Organizational structure of NHS
Source: Du et al., 2010
The organizational structure of Cancer Research UK is totally division based as all the
division only report to the president of the institute. Various division of cancer research UK
such as research group etc. is independent in their work (Du et al., 2010). Being an
independent division significantly benefits cancer research UK in order to achieve its aims
and objectives.
Figure 4: organizational structure of Cancer Research UK
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Source: Hillary, 2017
Functions of various department of Iceland retail supermarket
The functions of different department of Iceland retail supermarket are:
Marketing Department
The marketing department of Iceland ensures that the reach of the business effectively
reaching to the target customers. The marketing department is responsible for using
effective marketing strategies that can be used in order to attract customers. The
marketing department of Iceland is also responsible for promoting business throughout the
UK with various advertisement strategies (Jackson, 2012).
Purchase and Sales Department
Purchase and sales department of Iceland is to record all the purchase sales related activity
to ensure that there should be a proper balance of supply and demand within the
organization. The sales and purchase department needs to report all the daily and weekly
transaction to the finance department so that proper accounting can be maintained within
the organization (López López, 2017).
Finance Department
The finance department of Iceland is responsible for managing all the financial activities
within an organization. The financial management record all the financial activities related
to sales, purchase, marketing expenses, etc. and properly fulfill the accounting activity of
the business. The financial department is also responsible for creating and managing cost
budget of various departments.
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HRM Department
The task of the HRM department is to make sure that business doesn't suffer from the lack
of human resource within the business organization. The HRM department is connected
with all the departments of Iceland retail supermarket as a human resource of all the
department is effectively managed by the HRM department (Lowe et al., 2012). From hiring
to issuing salary to the employees all the activities of the workforce is effectively managed
by the HRM department of Iceland.
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