Analysis of the Contemporary UK Business Environment for Penny Market

This report provides a comprehensive analysis of the contemporary UK business environment, specifically focusing on the potential entry of Penny Market, a German grocery retail company. It begins by examining the UK market structure, highlighting key characteristics such as the dominance of a few major players and the importance of competitive pricing and service quality. The report then delves into the economic factors impacting businesses in the UK, including supply and demand, inflation, recession, and the impact of income and employment levels. Furthermore, the report analyzes the likely impacts of Brexit on Penny Market's operations, acknowledging the uncertainty and potential challenges arising from the UK's departure from the European Union, along with the impact of COVID-19. The report emphasizes the importance of understanding these factors for strategic planning and successful market entry.

CONTEMPORARY
BUSINESS
ENVIRONMENT

Contents
INTRODUCTION:......................................................................................................................................3
1. Explain the market structure in the UK within which the company will be operating.....................3
2. What are the economic factors within the UK that will affect the business of the company?..........4
3. What are the likely impacts of Brexit on the business operations of the company?.........................7
Q4. Impact of COVID-19........................................................................................................................8
CONCLUSION...........................................................................................................................................9
REFERENCES:.........................................................................................................................................10

INTRODUCTION:
The contemporary business environment is quite competitive and so to co-operate with such
environment for the marketing purposes which can lead to improve a good item, or to price it
attractively and making it affordable for the consumers. To communicate with the current and
capable shareholders and the general audience is no longer a process of luxury but it is a
requirement of the competition. Marketing experts believes that a company is laid to the account
of a communicator and the promoter. Moreover the major concern in these days of technology is
not regarding the fact that how to communicate with other but rather what to say and to whom
and this is the time where the strategies of marketing are highlighted.
This report will discuss about the penny market which is a grocery retail company based in
Germany which are planning to start their operation in the UK. They wanted to analyse the
recent business environment of UK by knowing about the market structure in the UK, the
economic factors within the UK which will be affecting the business of the other companies, the
impacts of BREXIT on the business, and the impact of covid-19 on the business of the company
(Boone, Kurtz and Berston 2019).
1. Explain the market structure in the UK within which the company will
be operating.
The market is a competitive area and it is dominated by several suppliers. The market structure
of UK is characterized into three main areas onto which the penny market of Germany can
operate. Firstly, few firms should be the major supplier in the market sector. Secondly, the
market firms should be independent. Thirdly, the other firms should not be able to come into the
existing industry. Eventually, the customers in UK are largely attracted by these markets because
of the cheaper prices, good quality of service, the unprincipled balanced, and the reduced
competition. To the customers from the markets in the UK, these markets are beneficial as the
customers acquire the low and fixed range. As there four companies are quite dominating, it is
not necessary for them to compete with the other supermarkets. Therefore, they have the
capability to fix the price in order to make the highest profits in the course of time. Moreover
when the progression of the scale of these markets are leading to the increment of the supply and

the price of those products which will reduce or give a discount due to the decreasing cost
coming from the wholesalers. Furthermore in UK the customers are never worried about the
price of the products in these markets. According to the consumer’s perspective, the remarkable
quality of services provided by the markets of the UK is the point of advantage for the
businesses. Similarly, in a way to prevent other competitive markets to make an entry in these
existing ones, these markets still needs to improve on their services which includes the attitude
services, the after scale management services and the operating system management. For
examples the markets supply sufficient spaces for parking to the customers, they also provide a
separate sector for customer department in order to help the consumers to seek out any questions
regarding the shopping and the products, and it also provides the delivery services. According to
the market competitors the supermarket which will decrease the range of their products to the
prices set by this supermarket are much greater and save the prices if the prices set by them are
lower than those of the other super markets. The service system in the markets of UK is quite
different and also essential as it depicts the image of the market and the customers gave more
preference to those markets which have excellent service system. The excellent image of the
market not only attracts the consumers but also can preserve the good outlay of the add. Overall,
these markets serves the excellent quality of service to the customers in the UK. So, by these
perspectives of the market structure of US the penny market can operate their business here in
the UK and can be a part of various advantages faced by the business and can progress in the
market industry (Domanović, 2013).
2. What are the economic factors within the UK that will affect the
business of the company?
Every business whether it be a domestic or the international business, it is definitely been
affected by certain economic factors which are prevailing in the market. From many economic
factors affecting the business within the UK some of them are the rate of interest, supply and
demand, recession, inflation and so on. Each and every business in the market are willing to
expand on their profit status and all of this can be identified by the demands of the customers ,
and the provision of proper supply to them and to maintain the good quality of goods and
services. This operation looks so simple but is affected by many factors. The process of sales,
production and the procurement procedures of a business are highly affected by these economic
factors. The economic elements are basically associated with the goods, services and the money.

Despite of directly affecting the business fundaments these factors are pointing to the financial
status of the economy on a large level. The reason behind this can be the economic status which
decides couple of essential details which arises in a functioning company, which includes the
details such as the demand of consumer, taxes and the values of assets. The economic elements
which affects a business covers all the activities in an economy under it which can help the
company to acquire all its aims regarding the business. There are few legal regulations in the
country which can be defined as the legal factors affecting the business. And the examination of
the economic factors is a key part of all the strategic analysis method. Below is the list of
economic factors which is affecting the business of the company:
 Supply and demand: These are the two major economic elements affecting the business
models. Demand is the willingness and capability of the consumer to purchase a business
proposal and supply is how capable is the business to make it available what the
consumer is demanding for. For an example when a new mobile model has been
launched in the market, it attains higher price because of the high demand in the markets,
and the prices later on will remain high if the demand is higher than the supply.
 Marginal and absolute utility: after several attempts of buying the same goods, the
customer’s fulfillment starts reducing which is resulting in the short or long term fall in
the sales of the business. There are so many brands which are launched much before the
utility and the sales is been experienced. So the occurrence of new brand makes sure that
the revenues of the businesses do not fall off. The falling down of the utility factor is one
of the economic factor of the UK affecting the business of the company.
 Money and banking process: the banking procedures and the policies of fiscal affects the
business and the economic environment along with the consumers of the business.
Money in the whole process depicts the requirements of the consumers. In contrast to
this, banking facilities depicts the borrowing ability of the individuals and along with the
business. Banking procedures plays a critical role in the affection of the prices of goods
and the rates of interest together with the assets prices and the investments. The economic
elements and the inflation are attracted by the monetary procedures of the country
(Blahová, Haghirian and Pálka, 2015).
 Income and employment: another critical factor of the economy which is affecting a
business process, are the income rate and the unemployment of a country. The intensity

of the employment factor recognizes the demand rate in a company and also country
involving the purchasing power of the individuals (Kuiper and Clippinger, 2012).
 The general level of price: the price level is another economic factor in the UK which is
affecting the business and also plays a great role in its development. In any economic
area the production cost and the rates of transportation are the most essential factor which
can drop out the contribution to the retail price, and results in lowering down the profits
produced by a business.
 The trade loops: the trade cycles also plays a crucial role in fluctuating the cost of the
goods and service which are been sold by a business. This loop include but are not
limited to the loss and profits of the business.
 The inflation: it usually arises when the exchanges of money is too much in the economic
area and not supported by the similar accessible goods and services. The prices of goods
have to rise in one or the other in order to preserve the business. And therefore there is a
rise in the cost of goods which are needed for the production purposes. This increment in
the production of goods will be reciprocal to the retail price (Ali and Atan, 2013).
 The recession: the companies undergoes with the great losses in the process of sales and
profits during the recession and it is also a crucial factor which is affecting the business.
And in a way to reduce their costs they usually make the staff cuts, firing the staff, or by
lowering the capital expenditure by advertising the budgets etc. and as a result this affects
the firms and the organizations of each sizes with respect to the economic environments
they are established in (Dhingra, Ottaviano, Sampson and Reenen, 2016).
 The growth of the economy and its development: the range of money which has been
preserved into the sectors of long term enhancement and the finances of the individuals
staying in a society at a specific country is lowered by the economic progress of the
country. From all the above mentioned economic factors of the UK which are affecting
the business, the development is still at the top and the most essential one. As a business
requires a worker to fulfil the demands of an economic area (Amankwah-Amoah and
Wang 2019).

3. What are the likely impacts of Brexit on the business operations of the
company?
Impact of Brexit on the penny market company: Brexit has been absolutely different. It has been
originated with a crucial factor in the uncertainty after the United Kingdom has decided to leave
the EU in the year 2016. This uncertainty was on a high loop and has persisted throughout then,
as the time has been passes without any deal with the context of the UK’s withdrawal , the
companies had become more devastated about whether the deal will exist or not, or what will be
the terms of the deal. Brexit along with this was a political crisis against the economic one , and
the one which was not expected at all. Another way in which brexit was unusual was the couple
of factors which made it difficult and even impossible for the business to quantify. From many
researches this has been found out that Brexit has been an essential source for the uncertainty for
plenty of businesses in the UK. It has also been analysed that brexit is most likely to lower down
the further rate of productivity of UK. Most of the businesses predicted that the Brexit will
gradually become the reason behind the reduction in the sales and the increment in the costs.
Another crucial point which is concerning for the UK based businesses is that of Brexit which
had laid several negative implication on the operations of the company. The impact of no-deal
brexit describes that the company will lose its entire access to their crucial markets, and they
need to give up with their plans and they might face the uncertainty for long course of time. The
factor of innovation is also likely to be targeted by the impact of brexit as they would become
limited with the accessibility to the funding system. Along with this the film industry of the UK
are also under the impact of brexit. In addition to this, the UK businesses which are being
engaged in exports are hit by the effect of brexit most critically. This is due to the reason as these
businesses will be feeling the uncertainty by the limited access to the markets overseas (Combe,
2012).
The above analysis have represented that the impacts of brexit will be resulting in various
economic and the financial implications for the UK. The business in UK are already so many
problems and are encountering themselves to the larger borrowing costs and now with the arrival
of brexit these business of UK will be facing the extra challenges such as the shortage of labour
and the lowered affordance to the markets outside. These effects are also largely dependent on
the final agreement among the UK and the EU, which will then analyse the terms and conditions
to which the two sector are distanced (Gakure, 2014).

Q4. Impact of COVID-19
Impact of COVID-19 on Penny market: Penny Market which is known as a large retailer
company. Which has lost its place in the era of covid-19 epidemic. As the corona virus is
spreading all over the world, consumer demand, product availability and logistics services have a
profound impact. In view of this, the company has introduced some of its rules like that,
Estimates for global retail in 2020 will be halved from pre-COVID-19 forecasts, overall, but
impacts are uneven. Dislocated international supply chains and triggered steep selloffs in
financial markets. It has already become clear that the high street will take on a very different
form once the pandemic is over. Penny market discussed the impact and challenges of COVID-
19 on the retail sector as well as its longer-term outlook.
The impact and challenges of COVID-19 on the retail sector and future trends - Penny
market: Penny market examined the perception of the retail industry during the pandemic.
COVID-19 exacerbated challenges facing the industry and has thrust retail into the spotlight of
national efforts, especially the sector’s swift response to the pandemic and the efforts of
employees (for example, in the food industry) being particularly recognized. Penny market spoke
about the sharp rise in online growth, summarized by the startling statistic that it took 27 years
for on online grocery to reach 7% of the market, took 23 days to reach 10% and most recently
has reached 13%.Penny Market is a type of retail company that holds its special place as a daily
supplier of individuals. This company is also putting a lot of emphasis on online trading because
many people are not leaving the house due to corona epidemic. So, the purpose of supplying
their essential goods to the people has also been its purpose. Many people have considered it
very good that the receipt of goods sitting at home is a very good tool at this time. Therefore, it is
also sanitizing many types of goods so that corona can be avoided. The retail graph should be
decided by looking at the growing graph of online trading, how to deliver their goods safely to
the people. And as the online trade increases, the payment facility should also be easy so that no
money gets stuck in the time of this epidemic.
Due to Covid-19, Penny Market has changed its activities a lot. Like that, In many places,
they closed their small shops and opened a big retailer store so that all the goods would be
available at one place. And customers do not have to go far away from their places and open
small shops in many places so that the number of customers can be avoided. So that the corona

virus can be prevented from spreading. And traders have to change the price of many types of
goods so that people buy them easily
This has been a big challenge full time and the retail business will have to do the following to
deal with this catastrophic situation. Adopt a flexible and agile retail model, Shift from Business
Continuity to Crisis Management, Manage the supply constraints, Deal with the decline in
consumer confidence and try to infuse confidence, Cope with staff shortages and drop in
demand, Plan for the long haul.
CONCLUSION
From the above discussion, a lot of changes will have to be made in the retail business to attract
customers to the business. And the customers should be made available such a product so that
they can easily deal with this epidemic and their work should also be done easily. And it can take
a year or more for a business to come to its previous state. The closure of shops inside it is also
considered very important decision because it helps in reducing the death rate of mankind. And
due to repeated lockdown, these facilities also suddenly turn off and on due to which it can be
difficult to take decisions. This is the main reason of retail business, because of which he
repeatedly makes his place in the market and suddenly loses his place. Therefore, the penny
market will have to develop such activities so that even the common man can use everything and
bounce back into the retail field.

REFERENCES:
Books and journals:
Ali, M.A.M. and Atan, R.H., 2013. The relationship between corporate governance and
corporate social responsibility disclosure: a case of high Malaysian sustainability companies and
global sustainability companies. South East Asia Journal of Contemporary Business. Economics
and law, 3(1), pp.39-48.
Amankwah-Amoah, J. and Wang, X., 2019. Opening editorial: Contemporary business risks: An
overview and new research agenda.
Blahová, M., Haghirian, P. and Pálka, P., 2015. Major factors affecting contemporary Japanese
business environment. International Journal of Productivity and Performance Management,
64(3), pp.416-433.
Bloom, N., Bunn, P., Chen, S., Mizen, P., Smietanka, P. and Thwaites, G., 2019. The impact of
Brexit on UK firms (No. w26218). National Bureau of Economic Research.
Boone, L.E., Kurtz, D.L. and Berston, S., 2019. Contemporary business. John Wiley & Sons.
Combe, C., 2012. Introduction to E-business. Routledge.
Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J., 2016. The impact of Brexit on
foreign investment in the UK. BREXIT 2016, 24(2).
Domanović, V., 2013. The effectiveness of the performance measurement in terms of
contemporary business environment. Ekonomski horizonti, 15(1), pp.31-44.
Gakure, R., 2014. Emerging trends shaping contemporary business strategy (Doctoral
dissertation).
Hubbard, C., Davis, J., Feng, S., Harvey, D., Liddon, A., Moxey, A., Ojo, M., Patton, M.,
Philippidis, G., Scott, C. and Shrestha, S., 2018. Brexit: How will UK agriculture fare?.
EuroChoices, 17(2), pp.19-26.
Kuiper, S. and Clippinger, D., 2012. Contemporary business reports. Nelson Education.