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The environment of business can be stated as the combination of both internal and external factors which influence the operating situation of business. Further, business environment involves factors such as customers, suppliers, owners and competitors. Also, it is essential for business to ensure that workers should be working in good business environment so that they can be more productive. For instance, it is crucial for firm to develop effectual business tactic so that different challenges can be overcome. In the current study, Iceland Supermarket has been undertaken which is the subsidiary firm of Associated British Foods Group. However, the company was launched in 1969 in Ireland (Blocher, 2006). However, company has grown subsequently by the end of 2012. Iceland Supermarket owns 238 branches across the UK, Ireland and Europe. Main focus of supermarket is on selling frozen meals and vegetables. Further, the report depicts the purposes of different businesses. Also, it is focused on describing the extent to which Iceland Supermarket assists in meeting the objectives of its different stakeholders. Moreover, the importance of different economic systems such as command, free, mixed and transitional etc. are also discussed that attempt to allocate resources effectively (Clarkson, Miller and Cross, 2010).
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Following are the purposes of different businesses which are discussed underneath-
Iceland Supermarket- It is a public company that focuses on selling frozen food items such as prepared meals and vegetables. Further, it also sells non-frozen grocery items such as meat, dairy and dry products. Main purpose of Iceland is to provide all types of food products i.e. from Pizza's to fish and raw vegetables to desserts. Additionally, business also focuses on providing better quality goods and services to clients at cost effective prices (Macdonald, 2007). Thus, with all such factors, business aims to become the number one leading company not within UK but in the worldwide market.
KFC- It is a private fast food company and specializes in fried chicken. However, main purpose of company is to deliver joy and happiness in the world and provide a convenient place for all the individuals to come together and spent their quality time. KFC focuses on to provide healthy food products with a wide range of products in chicken to grab attention of clients (Commander and Svejnar, 2011).
Transport for London- It is a public transport body who is responsible for the different aspects of effective transport system within Greater London in England. Main aim of TFL is to provide the best transport facility so that London can effectively work and grow at the fastest speed. In addition to this, business focuses to render safe and secure journey to every person residing in London (Dawes, Zhang and Sarkis, 2005). Thus, providing safe transport facility helps London to grow effectively.
Cancer Research- It is a charitable organization which was formed by the merger between Cancer Research Campaign and Imperial Cancer Research Funds. However, cancer research institute focuses on providing better facilities to individual and decreases the death rate of cancer patients (Eales-White, 2004). Further, institute carries out varied researches in order to prevent individuals from such type of diseases and provide the best treatment to the patients who are suffering from cancer disease.
It can be evaluated that stakeholders are the individuals who carry out different activities and functions in order to meet the objectives of business. However, at present time, these stakeholders are influenced by the business’s actions, objectives and policies. Following are the different stakeholders of Iceland Supermarket which are as follows-
Customers- Customers are valued as the king of every business. Thus, they simply require value in return of their money that is invested for the products of firm. Also, they want the best quality products at reasonable prices. Thus, it is essential for Iceland to effectively meet the objectives of clients and provide them required products at minimum prices. Hence, in order to gain customer satisfaction, business should undertake required steps to achieve targets. Main focus of Iceland Supermarket is to provide fresh frozen and non-frozen food products at affordable prices (Gani, 2011).
Employees- They are the main integral part of business and also work effectively for the improvement of enterprise. Therefore, it is essential for Iceland Supermarket to determine the needs of workers and fulfill it accordingly with the aim to provide proper satisfaction. Human resources of any organization require job security so that they can earn better livelihood (Craig and Campbell, 2012). In order to satisfy employees in an effective manner, organization needs to provide better salary, incentives and working hours to them as per the industry standards.
Government- In order to satisfy the need of government, it is essential for company to generate employment opportunities for the citizens. Along with this, it is also needed for Iceland Supermarket to perform their business practices in a legal manner by following the rules of government (Dave, 2012).
Suppliers- In case of suppliers, timely payment should be provided to them in return of their raw material so that they can be satisfied effectively. Due to this aspect, management of Iceland Supermarket is focused on rendering advance payment at the time of purchasing raw materials (DeVries, 2011).
Following are the different responsibilities that Iceland Supermarket need to adopt with the aim to satisfy the needs of clients. Also, business is required to employ effectual strategies to meet the responsibilities of firm. These are discussed underneath-
Iceland Supermarket is required to follow all such responsibilities with the aim to satisfy its stakeholders. Following demonstrative strategy by firm is the best in order to meet all these responsibilities in an effective manner. Business is required to follow different policies and procedures so that Iceland can perform effective operations and satisfy consumers (Miller and Cross, 2009). Also, such strategies are employed in order to help human resources of business and gain the best outcomes.
In regard to this, it can be stated that there are different types of economic systems available that helps in allocating the resources effectively and efficiently. It is as follows-
Command economy- It is also stated as planned economy. However, in such type of economy government bodies play a crucial role in managing and controlling the activities. Here, government is the main body who is responsible for deciding the quality and quantity of the raw materials used within firm for producing the products. Labor, capital and oil are the certain factors that are managed and controlled by the government forces (Pirttilä, 2008). Thus, resources are effectively allocated by the government in order to keep in mind the welfare of society.
Free economy- Furthermore, in such type of economy, enterprise is solely responsible for managing and controlling the operations. Also, in free enterprise economy there is no involvement of the government as decisions are taken by organization themselves. For instance, when there is no involvement of government then it helps business in effectively implementing the actions in order to gain customer satisfaction (Dransfield, 2005). Thus, free enterprise economy allocates the resources in order to attain profit maximization.
Mixed and transitional economy- It is the last type of economic systems that involves both the government and businesses in order to equally operates and control the functions. In regard to this, it can be stated that internal functions are managed by business while the external factors are controlled by the government. However, in such type of economy allocation of resources are done in order to attain welfare of society as well as profit maximization (John, 2002).
Here, the example has been taken of India because it is a developing country and thus operates all its functions within mixed and transitional economy. Also, the allocation of resources are managed and controlled effectively by both the government and shareholders of business. It is essential for the firms operating within India are required to share the information of its operations with government (Keillor, 2013). Thus, such organizations are required to pay taxes and duties timely. Also, it works for the betterment of society and maximizing profit. Further, Iceland supermarket is the public company that operates under the mixed economy. Hence, it is crucial for firm to involve different shareholders in order to develop strategies and overcome the problems to attain desired goals.
Following are the impact of fiscal and monetary policy upon the functioning of Iceland Supermarket-
Fiscal policy- Such policy helps in controlling the inflow and outflow of the cash from the country. Introducing such policy by government badly affects the profitability of enterprise. In addition to this, government also imposes high tax rates upon the organization that impacts their sales and demand of goods and services. Because of high tax rates company is forced to charge high prices from customers and thus it raises competition among industry (Sohal and Perry, 2006). As a result of this, business decreases its brand image in market and profitability of firm decreases. Also, customers search for varied options available such as substitute products or switch over to other businesses.
Monetary policy- It is another policy that was introduced by the Federal Reserve Board in regard to fight with the unavailability of monetary sources within the economy. However, the main aim of this policy was to stabilize the economy and thus enhances the current value of nation. Thus, introduction of such policy not only affected the working culture of business but also affected the financial conditions of both the business and clients. Further, monetary policy also affects the research and development strategies undertaken by business. Monetary policy forced the banks to minimize the interest rates so that companies can take more loans and attain growth and development (Sparks, 2011).
Following are the competition policy and other regulatory mechanisms and its impact upon the Iceland Supermarket working are as follows-
1.Competition policy- Such policy has been introduced by the government in regard to introduce new and innovative products and that too at affordable prices. Government focuses on such policy in order to develop the level of competition among businesses so that it helps in providing benefits to clients in getting better products at effective prices. Also, it assists in increasing the efficiency of firm in market (Ward and Lewandowska, 2008). However, introducing such policy has affected the Iceland Supermarket within different ways-
2.Regulatory mechanisms- However, such policy was introduced by government in order to supply the best quality products to client at affordable prices. Additionally, regulatory mechanism also focuses on reducing the unemployment rate by providing employment opportunities to people. Thus, introduction of such policy affects the profitability of Iceland Supermarket. Such mechanisms also forces company to maintain its price level in order to gain maximum profits (Conner, 2010).
Following are the different types of market structure that helps in determining the pricing and output decisions of businesses-
Perfect competition- Within the perfect market competition it involves varied number of businesses present that are producing the identical products. Thus, the level of competition is very high within such market and the size of firms is small. On the other hand, there are large number of buyers and sellers present within the marketplace (Scott, 2009).
Monopoly market- In such type of market there is only one firm present with no close substitutes. Also, entry of new business is restricted as firm owns monopoly of producing the product. Thus, there is zero level of competition available within such market structure (Blocher, 2006).
Oligopoly market- It involves the firms who are producing uniform products. However, industry possesses large number of buyers with limited or few sellers. Also, the level of competition is high within such industry. Here, medium size firm operates in order to attain goals.
Monopolistic market- In such type of market structure, it involves large number of businesses producing substitute products. Thus, the level of competition is high as compared to that of any other market structure. However, the substitute products are differentiated on the basis of branding. Here, the market structure of firm is comparatively small (Macdonald, 2007).
Trough analyzing the different market structure it can be stated that Iceland Supermarket undertakes oligopoly market in order to operate the business. Business operating under such type of market structure is the price maker. Thus, Iceland Supermarket determines the pricing and output decisions in regard to attain desired goals (Ga
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