BITE College Unit 3 Business Environment
P3.2: Illustrate the way in which market forces shape Sainsbury plc responses using a range of examples
The market forces play a very crucial role in shaping up the businesses like the Sainsbury PLC responses to the market. As we have already seen in the above segment market are largely responsible for determining what should be produces, how much to be produces and what should be the price of the product. The market forces communicate with each other in order to have better profits and this depends on the market structure. For Sainsbury plc, the decision making is done depending upon the market preferences i.e. the customer preferences, the competitor analysis, price elasticity, supplier relations, etc. (Young, 1999). All these forces drive the way Sainsbury behave in the market.In a perfect competition the number of buyers and sellers re high and they play a crucial role in deciding the prices of the commodities traded in the market. This is often termed by the economists as the price taking property rather than a price making property as the sellers get to know that at what price they should sell their products instead of deciding it themselves.
P3.3: Judge how the business and cultural environments shape the behaviour of Sainsbury plc UK.
The cultural environments and the business environment shapes up the way the business behave be it in the caser of Sainsbury PLC. The businesses have grown global and they operate in many countries which have different cultures. These different countries have different cultures and impact the business and their activities. The culture of the UK where the Sainsbury is based is inherited from ancestors and the customer preferences define the behaviour of any organization. Different regions in UK have different cultures and business environment. Different regions also have different policies as they have different policies in different regions which affect the business. The competitor strategies also differ in different regions depending on the products offered by the competitors and the strategies adopted by the competitors. Sainsbury also have to act accordingly depending on the culture and the business environment in different regions.
Task 4: Be able to assess the significance of the global factors that shape national business activities
P4.1: Discuss the significance of international trade to Sainsbury plc UK
As we all know that the businesses are going global these days and they have expanded their business cross borders. Also as we have already discussed that the government in different countries have their own policies and rules and regulation which the organization needs to follow. There is high significance of the international trade to Sainsbury plc UK. In the beginning the organization was only based in UK but as the organization saw the benefits in expanding the organization in countries outside UK, they expanded accordingly. There are a lot of forces which motivate the companies to go global. These are the cheap labour present in certain parts of the world. There are also many geographical locations which are technologically very advanced so opening business in those geographies will help the business to take the advantage of those advanced technologies and use it all over. There are places where the cost of production is very low; the cost of raw materials is very low, so opening business in those locations will be very profitable for the businesses. All these factors are being made use by the Sainsbury UK. They have very well understood these benefits have properly made use of these benefits by expanding the business globally. Hence in a nutshell there is a great significance of the international trade to Sainsbury plc UK.
P4.2: Analyse the impact of global factors on Sainsbury plc
The global factors have a high impact in the businesses like Sainsbury PLC as the organization is present globally. There are many global factors which affect the business like the political system of different countries, laws and regulations of doing business in different locations, international trade policies, etc. The UK-based businesses which are operating at global scale face two major challenges in coping with the dissimilar business environment. The European Union has a major role to play here. It is the legal body who is responsible for formulating riles and regulation for the businesses to do business in UK. The political factors of different regions in UK also impact the business of Sainsbury. The economic conditions of different regions is yet another important factor to be considered in global; factors which affect the business in Sainsbury. The political changes affect fundamental economic drivers of the countries, and hence the tax rates, interest rates, etc. get affected.
P4.3: Evaluate the impact of policies of the European Union on Sainsbury plc
The European Union has a very major role to play to define the policies for the business to follow in the UK which helps to keep a control over the businesses. The European Union define the policies in such a way that it helps the common people. The European Union plays a very significant role in reshaping the businesses in UK. Sainsbury has to follow the policies set by the European Union. There are many factors and policies set by the European Union which affects the Sainsbury plc. Some of these are the taxation policy, interest rate policy, process of business operation, etc. Higher the tax rate, higher is the amount paid by Sainsbury plc which in turndecreased the profit margin and demotivates the company to expand its business in new geographical areas. The policies set by the European Union have to be beneficial for the organization and it should at the same time also be favourable for the common people. SO in a nutshell it should be a win-win situation for both the parties.
This paper can be concluded by saying that there are many different business environment in which the businesses like Sainsbury has to do business but the way Sainsbury is doing business is commendable. They are facing the fiscal policies and the monetary policies, competition policies and they make their strategies keeping all that in mind. The companies are going global and they are doing business understanding the different situation in different countries. This different situation can be the different business environments and different cultural environments. In the current scenario, it has become very necessary for companies to go global and expand enormously but the global factors sometimes acts as roadblocks to them. Hence the government should keep this in mind and should formulate such policies which should prove to be beneficial for both the organization and the government.
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