Business environment can be termed as the different factors such as internal or external which can affect working of company such as employees, customers as well as management. For achieving success it is essential to know about the environment of business which offers various types of opportunities. There are certain conditions in environment which impact the operations of business to a greater extent (Al-Debei and Avison, 2010). Present report is based on Next PLC which is British multinational and it is engaged in selling clothing, home products as well as footwear. In this report, the business environment of Next PLC is examined with reference to different factors including structure of market, main responsibilities of Next PLC etc. Further, the impact of monetary and fiscal policy on the enterprise of Next PLC has also provided the significance along with the effect of cultural environment. Moreover, importance of international trade along with the impact of global factors on Next PLC is also discussed with globalization. Lastly, the European Union policy and their relation to the Next PLC is also described with respect to some of the policies (Bertillo and et. a
A. Identifying purpose of different types of organisation and their purposes
There are different types of organisation in which some of the businesses are profit seeking and other is non-profit organisation. Organisations are different because of their culture, environment and structures (Bøllingtoft, 2012).
Public Limited Company- Next PLC is a public limited company which has started their journey in the year 1864. It was started as a small retail store and now it has become one of the largest clothing retailers in UK. It has around more than 700 stores and it is also listed in London Stock Exchange (Brannon, 2010). Some of the main purposes of Next PLC are to serve high quality of products and to create a positive difference. Thus, one of the objectives of company is to achieve high level of growth with respect to market share and to increase in the number of customers.
Charity- Cancer Research UK is an example of charitable organisation which provides services to the patients suffering from cancer. The main aim of the organisation is to reduce number of deaths due to cancer and it is also world's largest self-directed cancer research charity. The work of the research is completely funded by the public (Carpenter, and Sanders, 2006). Further, it raises their money from donations, events along with the retail and corporate partnerships.
Private Limited company- McDonald Corporation is an American food restaurant chain which has their own global identity. It is one of the largest food chain that is highly known for the hamburgers. The main purpose of McDonald is to make efforts for providing appropriate quality of products and services to their customers (Carroll and Shabana, 2010).
B. Extent to which Next PLC meet the objectives of their shareholders along with the different responsibilities of strategies of organisation in order to meet the requirement of stakeholders
An individual or a group who have their stake in the different activities of Next PLC are considered as stakeholders. There are some of the stakeholders of Next PLC which plays an important role such as customers, employees along with the government which helps in attaining the goals and objectives of the business are described below:
Customers- They are considered as key stakeholders of the company to whom Next PLC offering appropriate quality of products and services of clothing and home products (Commander and Svejnar, 2011). Further, it has been evaluated that customers have high level of interest in getting appropriate quality of services. Thus, for satisfy the needs of customers the management of Next PLC is needed to focus on the pricing strategies for attracting large number of customers.
Employees- It is also considered as one of the most significant stakeholders who provide appropriate services to the customers in the stores (Doh, McGuire and Ozaki, 2015). There is one of the main aim of the employees is to get proper environment of work and appropriate remuneration which assists them in giving services as per requirement. In order to meet the goals of organisation it is important to consider the issue related to the salaries of employees for achieving objectives.
Suppliers- The suppliers are also considered as an important stakeholder for Next PLC who provides appropriate materials for the carrying out the different activities of the business. Further, it is essential to have proper interaction with the different types of suppliers for the production of goods with the specification in order to achieve success (Hamilton and Webster, 2015). They also offer appropriate resources which can be utilise by the organisation for the production of goods and also assists the organisation to carry out the activities and achieve the targets.
Government- The government monitoring all of the activities of organisation related to the corporate social responsibilities which are adopted by the company or not. It is important for Next PLC to follow all of the rules and regulations which are framed by the government for smooth running of activities of operations (Markides, 2006).
It has been analysed that there are certain major responsibilities of Next PLC as an organisation that helps to develop an appropriate plans by making different strategies in order to accomplishing the goals of shareholders. Further, Next PLC is required to ensure that there is no discrimination in terms of employees are working at all of the levels of management (Narangajavana and et. al., 2014). It is required for Next PLC to develop proper practices and code of conduct along with the working policies. It can be expressed that Next PLC is also responsible to ensure appropriate products and services which are delivered to the customers according to the needs and requirement of customers. For meeting the responsibilities, the cited business entity also have to develop the strategy in order to carry out the research of market in particular time period. Thus, it helps to analyse the changes in the demands and requirement of the customers as per the people in market and to carry out the different changes. Other than this, Next PLC is also required to carry out the ethical code of conduct of marketing strategies so that it helps in satisfying the requirement of customers (Papatheodorou and Lei, 2006).
A. Explaining the nature of UK economic system and it effects on Next PLC
All of the countries have their own economic system as their main focus is on the activities which are related to the allocation of resources in the nation along with the proper arrangement of the services in a specific areas (Paulose and Nair, 2015). The economic system of UK and it affects on Next PLC is discussed below:
United Kingdom Economic System- In the economy of UK there is mixed economic system where all of the decisions are considered by the people in market. For example, choice related to purchase of products is depend on the people. However, there are some of the decisions are taken by the government which covers the supply related to medicine and road buildings. Further, there are several decisions are developed by the government of UK in order to provide services as per the requirement of customers. In case of Next PLC, there are some of the positive impact due to the economic system of UK as the company can produce goods according to the needs and demands of customer (Samy, Odemilin and Bampton, 2010). It is considered to be advantageous for them in order to achieve high level of growth and development. Thus , cited business is required to comply with all of the rules and regulations which are developed by the government.
B. Assessing the impact of fiscal and monetary policy on businesses
In order to create changes in the economic environment of the country so that there are two ways adopted by the government. It includes the fiscal and monetary policy and in case of fiscal policy it refers to a technique which concentrate on assessing the taxation and the different activities of central government spendings (Solomon, 2014). On the other side, monetary policy is considered as to maintain the interest rate with the cash supply in the economy by the central government. This tools affects the farming as well as housing sector. It can be identified that both of the policies plays an essential role which is discussed below:
Farming- In farming sector, there is positive impact of the monetary policy as there is increase in the interest rate which assists reserve bank to increase the spending on farm (Solomon, 2014). In addition to this, there is also maximisation of the subsidy by the government to the farmers which is helpful for them to harvest the crops in farm. Therefore, it has been analysed that because of increment in the interest rate so that government have to provide appropriate spending to the people.
Housing- It is an another field that is housing which is impacted by the fiscal and monetary policy that is developed by the government. For instance, if there is increase in the rate of taxes so that there is reduction in the inflation by the government that leads to reduce the spendings (Tayur, Ganeshan and Magazine, 2012). At the time of recession the UK government decreases the tax rate and also increases the power of spending in the different infrastructure that enhances the standard of living. On the other hand, in fiscal policy there are some of the spending which are made by the government so that there is increase in the rate of growth of economy so the government cut down the taxes.
C. Evaluating the impact of competition policy and other regulatory mechanisms in UK on the activities of Next PLC
There is requirement of appropriate competition for the purpose of growth in the marketplace. For maintaining the competition in market in similar industries there are certain policies which are created which encourages and enhances the organisation. The competition policy is introduced by the UK government for the purpose of increase in the level of competition in market (Trkman, 2010).
Competition Policy 1998- Through competition policy, it ensures the fair competition among the different organisation in marketplace. With the help of competition policy Next PLC is competing with other organisation such as Asda, Sainsbury and M&S. Furthermore, Next PLC is growing towards the new innovation and their own branded products which dominate the market of UK in future (Ullah and Lai, 2011). Moreover, through the compliance of Regulatory mechanisms which includes the opportunities of employment, wages to workers and to work in better manner of the environment which is to be given importance by the Next PLC. Thus, Next PLC is able to develop an appropriate sustainable image in market along with it to satisfy the customers as per their needs and requirement.
A. Impact of market structure on pricing
Market structure can be defined as the various characteristic of the market and their major focus is on those characteristics which can have impact on the pricing and competition. It can be stated that Next PLC's price and output decisions which are affected by the structure of market where they carrying out their operations (Weiss, 2014). For instance, if stated business operates in perfect competition market then there is high level of impact on price and output decisions. One of the main features of perfect competition is that there are wide ranges of companies along with buyers. Further, Next PLC is not required to set prices of their goods and services which are based on pricing strategy which is adopted the competitors. On the other side, if Next PLC operates their business in monopoly market then they have the opportunity to make their own price and output decisions (Welford, 2013). The key characteristic of monopoly market is that there is only one seller so that they can charge the prices according to their requirements. In context of present scenario of Next PLC which is operating their business in monopolistic market where they are not dependent on their competitors with respect to pricing and output decisions.
B. Influence of market forces
It can be identified that there is a direct impact of market forces on the practices and operations of Next PLC. While carrying out different activities, the business is required to consider different forces of market which includes demand, supply and also have to develop some strategies for the same (Wild, Wild and Han, 2014). If there is high demand and supply is low, Next PLC is needed to lower down the activities of marketing and to increase the prices in order to maintain the demand and supply. However, it can be critically evaluated that at the time of low demand and high supply, Next PLC is required to carry out appropriate strategies of marketing for bringing equilibrium among the demand and supply. Marketing will helps for developing need among the different people in market and attract them in order to purchase the products and services which are provided by Next PLC. Other than this, there are certain markets factors such as economic situations, changes in demand of customers along the technological changes which affect the practices of Next PLC (Xue, Shen and Ren, 2010). For instance, technological changes encourage the stated business to adopt new technology for survival in market. Moreover, changes in requirement of customers also motivate business to carry out modifications in products and services.
C. Cultural environment of Next PLC shapes the behaviour of organisation
It is important to study the environment of the business for the purpose of running business successfully. There are two factors in business environment such as internal and external (Al-Debei and Avison, 2010). The cultural environment of the business is not controlled by their own which can be termed as the production, placing, promotion of the business enterprise such as Next PLC. There are some of the external factors of cultural environment of Next PLC such as attitude and customers beliefs which influence the business and the choice of production of Next PLC. Furthermore, the employees at workplace and their attribute and cultural demand from the internal factors of cultural environment of Next PLC. If the employees have strong values which make sure the ethical awareness of the business. If the employees morally weak so that there are certain possibilities of misuse of resources at Next PLC so that cultural environment shapes the behaviour of the stated business (Bertillo and et. a