Analyzing the UK Business Environment: A Case Study of Waitrose

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Introduction to Business
Environment

Table of Contents
Introduction......................................................................................................................................1
A. Using the UK as an example, discuss the role of fiscal and monetary policies in the
economy and assess how these policies affect the performance of business
organisations.............................................................................................................................2
I B. considering some major developments at global and regional levels, analyse how
these global and regional factors shape business activities............................................20
Conclusion and Recommendation.................................................................................................27
References......................................................................................................................................29

LIST OF FIGURES
Figure 1:The home Office in UK.................................................................................................2
Figure 2: Waitrose organisation..................................................................................................3
Figure 3: Cancer Research UK in London................................................................................4
Figure 4: Different steps of stakeholder mapping....................................................................5
Figure 5: Influence/ Power of stakeholders..............................................................................6
Figure 6: different forces under Porter's model........................................................................8
Figure 7: Net borrowing of UK in % of GDP (Source: https://www.economicshelp.org )
.......................................................................................................................................................13
Figure 8: Changes in Inflation and interest rates in UK of different years.........................14
Figure 9: Economic growth of UK in % of GDP......................................................................15
Figure 10: The UK growth relevant with world and GDP growth.........................................22

LIST OF TABLES
Table 1: SWOT analysis of Waitrose.......................................................................................10

Introduction
The economy of the UK can be considered as the most globalised in the world.
However, in recent years it is experiencing some economic problems, like, large budget
deficit, inflation, unemployment, etc. The different business organisations in the UK face
a recession as well as inflationary conditions that impact their business practices across
the nation as well as the world. Hence, to stabilise the market conditions, the UK
government utilise their tools of monetary and fiscal policy that are intending to boost
economic growth and prosperity. Both these policies are concluded in this report in the
context of the UK government. Monetary and fiscal policies are the major tools of
government that help to manage the inflationary pressure, borrowing rate, government
spending, along with the reduction of the budget deficit, stabilise economic growth, and
reduced unemployment in the UK market.
The present report has provided stakeholder mapping along with the analysis of macro
and micro business environment factors of Waitrose, so that strength and weakness
can be identified and improved. Waitrose is a food retail subsidiary division of John
Lewis Partnership that deals in groceries, and other food products. The report has
outlined the roles of fiscal and monetary policies on the business practices and their
growth in the UK as well as at the global level. Besides, global and regional factors are
discussed in this report that focuses on the different business sector growth in the UK.
Regional factors are concentrated on the development of business economy at the
national or regional level, i.e., within the UK while global factors prepare the
multinational organisations to expand their business and contribute in the global
economic growth of the UK. The global factors are presented with the help of PESTEL
analysis while regional factors include government support, transportation facilities,
infrastructure development, etc.
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A. Using the UK as an example, discuss the role of fiscal and monetary
policies in the economy and assess how these policies affect the
performance of business organisations.
Different business organisations and their purpose
The different business organisations in the UK can be analysed with the following
categories:
Public sector organisations: These organisations raise their funds from public
investments and are governed by the UK government. The prime objective of this sector
is to serve society by providing products and services at low rates. This helps the
economic expansion of the UK market through the availability of high employment,
growth opportunities, and a high living standard of people. For example, The Home
Office, UK is a ministerial department liable to serve the society in relation to
immigration, fire, police, and other security services. It considers its first duty towards
the citizens and country regarding keep them safe and secure. Hence, it plays a vital
role in the economic prosperity of the UK (Home Office, 2019).
Figure 1:The home Office in UK
(Source: https://news.sky.com)
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Private sector organisations: Business organisations in this sector operate its
business with an intention to earn a high amount of profits by offering quality goods and
services to the customers. These organisations focus only on profit-making business
activities and therefore, charge a higher amount for their products and services. The
business operations of private organisations are not governed by the UK government;
however, it requires following some mandatory provisions provided by it (Roberts,
2018). For example, Waitrose & Partners is a British supermarket chain that operates its
business through different shops across the UK. It sells its grocery items, spirits, wines
etc. to the customers in good quality so that high-profit margin support long standing in
the UK market.
Figure 2: Waitrose organisation
(Source: https://www.bucksfreepress.co.uk)
Voluntary sector organisation: It is a charity based or non-profitable organisation that
operates its business for the welfare of the public. It is not established with the profit
motive objective, as it concerns the social upliftments, and better society so that UK
economic growth and prosperity can be attained efficiently. For example, a charitable
organisation, Cancer research UK establishes with a major objective of awarding the
people about different cancer diseases, their causes, and precautions. This organisation
gets funding from the public, government, other businesses, etc. in the form of
donations and charity that support the life of those people that are suffering from cancer
(Cancer Research UK, 2019).
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Figure 3: Cancer Research UK in London
(Source: https://www.cruk.cam.ac.uk)
Stakeholders mapping to meet out the objectives of different stakeholders
It is the process through which an organisation, like, Waitrose can assess the
procedural changes within its business and their potential impact on the interested
stakeholders. For example, the decision making of business expansion of Waitrose
requires stakeholders mapping so that its impact can be identified on the different
customers, employees, suppliers, contractors, etc (Ferretti, 2016). The stakeholder
mapping requires extensive research in the market that requires setting up of objective
so that planning can be forwarded to such direction that ensures a positive outcome.
The stakeholders of Waitrose can be classified on the basis of internal and external
categories which include employees, managers, directors, suppliers, salesperson,
customers, local community, media, investors, etc. The interdependency of
stakeholders impacts the business functions and decisions of Waitrose, and therefore, it
is essential to analyse their impact.
There are four steps involved in Stakeholder analysis and mapping, as are:
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Figure 4: Different steps of stakeholder mapping
 The first step includes identification of different stakeholders of Waitrose that will
be impacted with the decision making of business expansion. For example, the
business expansion brings growth opportunities for the employees, managers,
suppliers, etc. along with the work pressure on them. Hence, it is essential to
consider their opinions and views before taking any decisions.
 The second step is to analyse what stakeholders are expecting from Waitrose
regarding its new project. The impact on different stakeholders will be different,
and therefore their expectations and needs will also be different. This will be
analysed on the basis of different roles played by different stakeholders
regarding Waitrose (Bourne, 2016). For example, the investors expect that they
get a good amount of return on investment; customers expect availability of good
quality of products at affordable rates due to enhanced economies of scale, while
employees expect to get high wage rates for their hard work and contribution in
the growth of the business.
 The third step is to prioritise the stakeholders on the basis of their level of interest
in the Waitrose project. In addition, the Waitrose is required to manage those
stakeholders that are highly influenced by the project by informing them with the
right information, providing them appropriate satisfaction, managed closely, and
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monitoring. However, those stakeholders that have a low level of interest cannot
be ignored and therefore required to manage accordingly.
Figure 5: Influence/ Power of stakeholders
(Source: https https://www.showme.com)
The last step is to engage those stakeholders that support correct decision making of
the Waitrose. For example, managers, investors, survey from customers ar the effective
way of stakeholder engagement (Missonier and Loufrani-Fedida, 2014).
Impact of business environment (micro and macro factors) on the Waitrose
The business environment consists of both internal and external factors and therefore,
Waitrose is required to analyse them so that informed decisions can be effectively taken
that acts in favour of the organisations.
PESTEL analysis of Waitrose (macro factors)
Political factors: It involves the factors like political instability, terrorism policies, tax
rates, etc that impact the operational functions of Waitrose intensively. For example, the
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Brexit results in low availability of skilled labour for the business and has impacted the
UK market negatively (Briaza, E. and Tzezairlidou, 2016).
Economic Factors: It include the factors like, borrowing rates, economic growth,
inflation, deflation, exchange rates, disposable income, etc. that influence the working of
Waitrose and its profitability highly. The negative impact of the UK economy on
Waitrose can be seen with high interest rates and taxes that leads to low purchasing
power of customers. However, the positive impact is in the form of high growth
opportunities.
Social factors: these are the factors that belong to the attitude, preference, behaviour
and shared beliefs of the society (Evans, 2013). It includes factors, like, population
growth, career attitudes, age distribution etc. For example, the changing needs of
different age Group impact the demand and supply of grocery and other items of
Waitrose. Also, people of different geographical areas prefer different products and
therefore their expectations and needs are required to be considered.
Technological Factors: The changing technological landscape in the supermarket
industry highly impacts the sales and revenue of Waitrose. For example, e-commerce
has raised the sales of Waitrose as it provides the facility of ordering and delivery of its
different products and services online. However lagging behind the development in the
technological area may affect the brand recognitions of Waitrose in the market.
Environmental Factors: Waitrose is required to sell and distribute those products and
services that are environment friendly as it is a serves an effective image in the eyes of
customers along with the showing duty towards the environment conservation (Taylor,
2013).
Legal Factors: It is essential to compliance of different ethical standards and legal
provisions while serving grocery items, drinks, and eatable products to the customers.
In addition, Waitrose is required to comply different provisions regarding employment,
selling, marketing, etc as it also contributes in influencing the consumer mind positively.
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Porter’s Five Force model
This model provides a foundation for the analysis of different industry forces so that
competition intensity and profitability level of organisation can be analysed. This model
is beneficial for the Waitrose as it helps to understand the business environment forces
so that business strategies can be adjusted accordingly (Lees, 2013). For example,
Waitrose can improve its weak position in the market or get a competitive and fair
advantage by avoiding the wrong steps. Following are the forces analysis of which
provides the competition level and industry structure to which Waitrose is relevant: the
supermarket. Those forces that are strongly competitive in the business environment
will be less profitable for the Waitrose.
Figure 6: different forces under Porter's model
(Source: https://www.business-to-you.com)
The threat of new entrants: These forces specify the level of barrier to entry in the
supermarket industry. As supermarket is profitable and therefore there is a high
potential of new entrants that affects the profitability of Waitrose negatively. More
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