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Analyzing Impact of global factors on UK Business

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Business Environment

3604 Downloads 13 Pages 3229 Words

Introduction

Business environment comprises of internal and the external factors which influences the overall functioning of business units. Sainsbury is the second largest chain of supermarkets in the retail sector. It specializes in dealing with different types of product (Aterido, Hallward-Driemeier and Pagés, 2011). This report discusses about the purpose of different types of organization with the missions, goals and objectives. Different ways are adopted to meet the objectives of the different stakeholders. It evaluates the responsibilities of organization to allocate the resources. Further, fiscal and monetary policies are assessed and the competition policies are ascertained through which the pricing and output decisions can be determined.

TASK 1

1.1 Purpose of different types of organizations and comparison of missions, goals & strategic objectives with the similar organization

In today's context, there are various types of organization which serve in fulfilling the single objective which is associated with generating profits. It is essential to determine the vision, goals and objectives for the purpose to sustain within the business environment for longer duration of time. There are three types of organization which operates in accordance to meet strategic objectives.

Sole proprietorship

It is the single legal entity which is operated by the single individual. The purpose of this entity is to generate maximum profit out of various operations (Baron, 2003). They are legally obligated with the reforms and need to be handle by themselves. For instance: Kurt Geiger is the retail sector brand which operates into the footwear industry for the purpose to generate profit.

Listed company

They are the companies which serve wide range of customer by making best profit along with providing the valuable experience to the customers regarding the purchase of product and services. For instance: Sainsbury is the listed company which function for the purpose to generate maximum profits.

Non profit organization

These are those organizations which do not operate for the beneficiary purpose. They carry out various activities for the betterment of public. For instance: National Health Service England is the organization which operates for the welfare of the public.

Organizations have different mission, goals and objectives which they serve to sustain for the longer duration of time. Sainsbury integrate all the activities to serve best quality of product to the customers to create the positive impact on the customers to whom they are offering their products (Berger and Udell, 2002). The main objective of Sainsbury is to make the products available to wider number of customers. By modifying the offering procedure Sainsbury can enhances its customer services in more appropriate manner. This will help Sainsbury to function in an efficient manner over the performance parameters as per the standards ascertained by them to cater large number of customers.

1.2 Stating the extent to which organization can meet the objectives of the different stakeholders

There are several stakeholders which are associated with the overall functioning of the organization. Sainsbury is associated with several stakeholders that help the company in enhancing their performance and which further result into longer sustainability. The stakeholders of the Sainsbury are discussed underneath:

Suppliers

They are the important stakeholders which makes resources available to Sainsbury to make the offering to the customers (Björklund, 2011). All the information related to the customer requirement need to be passed on to the suppliers for making goods available to the customers with the help of these stakeholders.

Customers

They are the key personnel which determine growth and development of Sainsbury as they operate to meet requirement of them by making appropriate offering of the products. Sainsbury adopt proper planning and assessment tactics to identify need of the customers and fulfil them in an appropriate form.

Employees

These are those individual who carry out entire functioning of Sainsbury to fulfil the requirement of the customers. As per the transformation into business environment, Sainsbury is required to ascertain effective framework related to the performance and reward them to meet the objectives.

Sainsbury can prioritize the entire work and program the activities in a systematic manner so that different objective of the stakeholders can be achieved (Bowman-Amuah and Accenture Llp, 2003). Thus, the entire information can be floated in a proper form which results in delivering the best values as per their needs and requirements.

1.3 Stating the responsibilities of an organization and strategies employed to meet them

Responsibilities play a very dynamic role within the organizations as effective strategies are implemented to meet them. Sainsbury plays a significant role to fulfil their responsibilities towards them.

Suppliers

They are the major elements which helps Sainsbury to meet the objectives. By making the entire information available to suppliers will make the product available as per the requirement. Through this, Sainsbury will be able to meet the customers’ expectations with the help of them. This will enhance growth and development perspectives of the organization .

Customers

The firm perform responsibilities by serving the customer in a best and fulfilling their requirements as stated by them. Sainsbury can ensure to provide better services by modifying customer assistance policy and adopting effective work behaviour to meet requirement of the users.

Employees

Sainsbury determine their responsibilities towards employees by providing an efficient workplace so that they are able to carry out operations in a proper form (Chavis, Klapper and Love, 2011). The employees are provided with lots of growth opportunities which help them to enhance their performance. This influences their entire working and they become responsible towards the work which is assigned to them.

TASK 2

2.1 Economic system attempts to allocate resources

Economic system plays an significant role to allocate resources and meet the demand which is present into the marketplace in which it operates. Demand and supply of the products and services are interrelated with each other. Economy need to be balanced in an proper form in to fulfil the requirement as the resources are limited. The major emphasize is laid upon the providing effective goods and services to the customers. Which help the organization to sustain in the economic system by providing better services to attain the growth perspective over the greater extent.

Sainsbury operates into the free market economy in order to make the offering of the goods and services to the wider range of customers. The entire economic system of Sainsbury is determined as per the demand of the customers. All the decisions are made over the market mechanism which is influencing the entire economic system (Chow and et.al., 2011). All the prices of the product and services are determined with the profit seeking objective which helped Sainsbury to allocate the resources in an appropriate form. Thus, equilibrium of price is being determined between the customers and the suppliers that are satisfied with the product and services offered by them.

2.2 Assessment of impact of fiscal & monetary policy on business organization & their activities

The fiscal and monetary policy regulates the activities of business organization and has a greater impact over the entire performance. The fiscal policy is determined by the government against the tax which is paid by them to the government. With the increase in the income tax, the people spend less money in comparison with the earlier spending over the purchase of goods and services. Thus , the entire activities of Sainsbury re4alted to the product offering gets affected by it. As this cut down the demand of the product and services which are being offered at a greater price.

Likewise, monetary policy determine the proportional distribution of money in relation to the demand and supply of the products and services. With lowering of the interest rates that are associated with the products which are being offered to the customers will rise the demand as the money is available in sufficient amount to buy (Hazlina Ahmad and et.al., 2010). Moreover, with the lowering of the interest rate the purchasing power of the customer will increased. Hence, Sainsbury will be able to attain better and high profits by making the offering of the product and services.

2.3 Impact of competition policy and regulatory mechanism on the activities of the organization

Competition helps the organization to frame up the policies in order to ascertain growth into the business environment. The policies which are associated with competition are inevitable as they regulate by proper mechanism to assure proper trade activities within the market place were it operates. With effective competition policy, Sainsbury is able to carry out the various activities and compete with the other brands supermarket chains which are present in United Kingdom.

As the market of UK is very intense over the competition perspective as they need to adopt those activities which enhances their performance criteria and make them able to meet the market trends in an effective manner (Hult, Hurley and Knight, 2004). Moreover, with the regulatory mechanism the entire activities will be enhanced such as wages of the workers, employment opportunities and effective working environment for the betterment of the employees. With the help of these activities, Sainsbury will be able to effectively deal with the impact of competition policy and regulatory mechanism on the activities which are being performed by them. With the proper follow up of the regulatory framework Sainsbury will able to sustain over the longer duration of time and help to standardize the growth perspective of Sainsbury.

TASK 3

3.1Ways through market structure determine the pricing and output decisions of business

Pricing and output related decisions need to be ascertained in an proper form as they are the essential components which help the business to operate into the market economy. The pricing and output decisions determine the overall functioning of Sainsbury to make high profits.

The market structure of Sainsbury is perfect competitive in which the customer are able to make choice regarding the purchase of the goods and services offered to them. Sainsbury is the identical chain of supermarket into UK economy which make the customer to make the choice regarding the purchase of products. However, the prices of the products are not determined by Sainsbury as they are influenced by the competitive prices which are present in the market (Sen, 2011). The strategies related to the pricing need to be formulated strategically so that Sainsbury does not encounter with huge loss and meet the demand of the customers in an effective manner. Sainsbury need to consider all the aspects that are related to the price and output decisions of the customers regarding the product and services offered by them.

3.2 Different ways through which market forces shapes organizational response with example

The market forces shapes the entire organizational response in an proper manner with the help of efficient handling of the several perspective which are associated with the organization. The different type of market forces which helps in shaping the organizational response is discussed underneath:

Demand and supply

These are the important aspects that influences the entire operations of the organization in an appropriate manner. All the market forces are involved to meet the requirement of the customers. For instance: Sainsbury can make modification in the product range which are offered by them. Through this they will be able to cater large number of customer and meet the requirement in an appropriate manner.
Customer's expectations: They are the essential element of the market force and proper response need to be given in order to meet the requirements. For instance: Sainsbury need to prioritize its offering to meet the customer expectations and provide quality product to them (Kaplan and Norton, 2001). This will increase the customer satisfaction as the options are being modified through which they can make their choice and meet the customer requirement.

Technology

This plays an important role as this help in enhancing the employees skills to make the offering and shape the market as per the response of the customers . For instance: Sainsbury can provide customer with the online option to make the order for the products which are required by them. This will help in responding in an effective manner to the demands of the customers.

3.3 Business and cultural environments of Sainsbury

Sainsbury has strong business culture in context of integrity, discipline, helping approach towards society and also they set strong belief and trust of customers then other supermarkets like ASDA and TESCO. Many European Union policies affect the business environment of Sainsbury such that it is targeted by Climate Change Act to limit the emission of carbon and its compounds. Moreover it is committed to sport activities like Active Kids programme and Paralympics. It has social impacts on long term partnerships, having ten farmer developments groups. Salisbury's transforming its corporate culture through some values like providing best food and health, making positive impact on communities, respect for environment, great infrastructure to work, maintaining the product quality and offering services at fair prices (Sekaran, 2006). In early 1990's, Sainsbury prevent itself from competitive change in market by maintaining its ethics and values. So this approach is used across the business, there are more than 157000 employees are working over 1000 stores increasing Sainsbury's retail chain.

TASK 4

4.1 Significance of international trade on UK business

UK is expanding its business through international trading. It has flourishing economy due to large developed market. Sainsbury is second largest leading retailer in UK. International trades have broaden horizons and market for Sainsbury, attaining benefits by exchanging resources and services. For many raw materials it has to export materials from other countries. It is also exporting its commodities and services in many regions worldwide, due to which it is attaining profits. Similarly many other countries require engines and machineries which they import from UK (Solomon, 2014). It has also gives benefit of reduction in transportation cost and communication cost. Moreover Sainsbury PLC is also getting opportunity of technological advancements and innovative ideas in international business. There is significant role international trading on Sainsbury as it widens the retail outlets over the world and also increases the sustainable growth of business. It also become easier for Sainsbury to exchange its intangible assets like knowledge, skills, ideas and technology worldwide, give rise to increase in employment rate and investment opportunities. By trading over world its brand image is also increased. Further it avail the opportunities of low production cost, for instance McDonald's has many franchisees in many countries and it import its products at low price and availability.

4.2 Impact of global factors on UK Organisations

The global factors are directly influencing the operations of Sainsbury. The rise in economies of developing countries threatening the international business. It should concerned an important issue as due to globalisation it becomes easier to expand the business organisation. The main global factors affecting the UK organisations are: Political, Economic, Social, Technological, Environmental and legal issues.

  • Political: If government of any country is not in favour, then the organisation may find it difficult to establish their business unit that country. Government rules and regulations also have an impact on UK business organisation (Teece, 2010). However, WTO 's policies can also affect Sainsbury as well as other organisation.
  • Economical: Economical factors like inflation rate, taxations, exchange rates, tariffs and quotas on imported goods highly affect the business trade between two units so economic conditions should be in favour of Sainsbury. Economies of China, India, Russia and Brazil is growing drastically threatens UK economy.
  • Social: The Company should make synergies with other organisations as well as other countries worldwide. There must be wide social network of the organisation across the world so that business can survive. It is very crucial for business unit to understand the customs, habits, traditions, likes and dislikes of society.
  • Technological: Business organisations should also be availed of technological support to survive in competitive market. Modern techniques and innovation of new product are also some major factors like online shopping, bar code system, automation techniques are boosting UK economy. For example, in UK many firms are technically sound so it is giving support to other developing countries.
  • Environment: Changing in weather and temperature will impact many industries like agriculture, poultry, farming, tourism and leisure (Xue, Shen and Ren, 2010). Global warming and greenhouse effect are important issues to consider for Sainsbury.
  • Legal: There are many legal factors affecting the business of Sainsbury globally and nationally, like discrimination of age, legislations, employment based law and monetary policies are responsible legal forces.

4.3 Impact of the European Union Policies on UK business organization

European Union Policies have a greater influence over the entire business operations of Sainsbury. As the UK business unit need to follow up all the rules and regulations in order to make the offering of the products. European Union policies helps Sainsbury to transect the respective business activities to exchange the product with the other EU countries without any barrier.

The policies were reformed to provide license to easily make the exchange of goods and services among the different nations and countries (Hutt and Speh, 2005). All the conditions are properly monitored to identify the unfavourable conditions which impact the performance of Sainsbury. With the identification of the negative aspects, European Union Policies helped Sainsbury to increase the production target and increase the sales outcomes.

Conclusion

Business environment need to be analyzed in an proper manner which help in allocation of the resources so that the entire functioning of the organization is carried out in an smooth manner. All the environmental aspects are monitored in a proper form by regulating the entire functioning to determine the sustainability of Sainsbury. All the aspects are presented while considering all the policies associated with the growth and development perspective of Sainsbury.

References

  • Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’ growth? Business environment and employment growth across firms. Economic Development and Cultural Change.
  • Baron, D.P., 2003. Business and its Environment (p. 2). Upper Saddle River, NJ: Prentic
  • Berger, A.N. and Udell, G.F., 2002. Small business credit availability and relationship lending: The importance of bank organizational structure. The economic journal.
  • Björklund, M., 2011. Influence from the business environment on environmental purchasing—Drivers and hinders of purchasing green transportation services. Journal of Purchasing and Supply Management.
  • Bowman-Amuah, M.K., Accenture Llp, 2003. Attribute dictionary in a business logic services environment. U.S. Patent 6,601,234.
  • Chavis, L. W., Klapper, L. F. and Love, I., 2011. The impact of the business environment on young firm financing. The world bank economic review.
  • Chow, A.T., and et.al., 2011. Broadband network with enterprise wireless communication system for residential and business environment. U.S. Patent.
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