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Business Environment

Student's Name

Institutional Affiliation

Table of Contents
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Market Economy........................................................................................................................4

Economic Systems..............................................................................................................4

Business Economics............................................................................................................4

Impacts of UK Government on Businesses........................................................................5

Business Environment................................................................................................................5

Internal and External Business Environment......................................................................5

SWOT and PESTLE Analysis.............................................................................................6

PESTLE..............................................................................................................................6

SWOT.................................................................................................................................7

Market Competition...................................................................................................................9

Definition and Description..................................................................................................9

Porter Five Forces Analysis................................................................................................9

Pricing Analysis................................................................................................................10

Trends................................................................................................................................10

Market Framework...................................................................................................................11

Definition and Description................................................................................................11

Application in Business Enviroment.................................................................................11

Application of Framework................................................................................................12

Market Competitive Advantage...............................................................................................12

Concept and history of Market Competition....................................................................12

Modern Trends in Market Competition............................................................................12

Strategies marketing and its history..................................................................................13

Relationship between market competitive advantage and marketing strategies...............14

Relationship between market competitions and economy................................................14

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Market Frameworks.................................................................................................................14

Trade fair in UK................................................................................................................14

UK Legislation implied on market...................................................................................14

Market Economy

Economic Systems
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An economic system is a method used by governments or societies to organize and

distribute available resources, goods, and services across the United Kingdom. They regulate

factors of production, which include labor, capital, and land. It entails many agencies,

organizations, and patterns of consumption that all add up to the United Kingdom's economic

structure. There are four types of financial systems with unique characteristics. First is the

traditional monetary system based on services, work, and goods, all of which follow

established trends. Second is the command economic system, where a dominant and

centralized authority such as the government (Belyh, 2019) controls the economic structure.

The third is the market financial system is based on free methods. In simpler terms, there is

minimal government interference in the economy. The last one is the hybrid system, which is

a combination of command and market economic systems. This means that there are private

and public sectors in the government. Therefore, the government strictly controls the public

by exerting much more control than is needed (Belyh, 2019). The United Kingdom uses a

mixed economy with a capitalist system. This means that while the government is bound to

make some decisions, the market also takes part.

Business Economics

Economics can be used in all fields such as engineering, medicine, and constructions

as they plan how to use scarce resources they have. It plays a significant role in financing,

organizational market, market-related and environmental issues faced by companies.

Business economics entails subjects such as scarcity, product, consumption, and distribution

(Camargo et al., 2018). Businesses use economics to fulfill their aims to maximize profit and
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minimize costs. This is through the knowledge of market structures and analyzing the

economy to help in pricing strategies. An example is the Uber services. When the business

started, it did not expect to grow as it has now because at that time, market penetration was

not sure. As its market grew, Uber transitioned to a policy with an aim to fulfill its market

needs. This move is somewhat connected to business economics. Uber assessed its policies

by increasing its operating base. It concluded that it should expand its employee base to serve

the increasing demand.

Impacts of the UK Government on Businesses

In the UK, citizens elect a national government and local government in towns. By

doing so, they expect the government to manage the economy properly. Being a mixed

economy and a capitalist country, the UK government must make and pass laws to protect

businesses and business environments. The recent effect was the parliament law to exit from

the European Union (Brexit), which has just started to paralyze UK businesses (Bloom et al.,

2019). However, the country has passed outlaws to protect consumers from exploitation from

companies and other companies. A government can build an ideal business environment or

tear apart one.

Business Environment

Internal and External Business Environment

The internal business environment consists of the organization's elements (Seo & Lee,

2019), for example, mission statement, formal structure, organization culture, resources,
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organization climate, and philosophy of management. On the contrary, the external

environment is composed of all outside influences that influence the business's operation, and

it is beyond their control (Seo & Lee, 2019). It consists of economic, political, and legal

demographic, social, competitive, global, and technological factors.

SWOT and PESTLE Analysis

Company of Choice: Unilever

PESTLE

Technology:

i. The Company has digital tools on which they use to reach their customers, produce

their products, and provide their services.

ii. The Company has high and undisputed levels of automation compared to its

competitors (Frue, 2017).

Economic:

i. Due to the economic conditions and individual purchasing power the Company,

provide different forms of charging using separate tariffs depending on how you are

billed (Frue, 2017).

ii. Unilever belongs to several markets if one fails.

iii. Competition is ready from other rivals in Europe, such as France.

Political:
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i. Operations in Unilever are subject to European laws and America Laws, which can

cause legal complications if not adhered to;

ii. The Company operates not only in the United Kingdom but also in other regions such

as China and India;

iii. If the government decides to restrict imports, Unilever can be a deep mess (Frue,

2017).

Social:

i. With its various brands, Unilever can always focus on its reputation because as a

company, they emphasize environmental and social factors (Frue, 2017).

ii. The Company expresses robust personal well-being in its products while still attaining

and retaining customers.

Environment:

i. Unilever has laid strategies to promote sustainable and renewable resources with

products designed to be safe and clean for customers in every part of the country they

distribute (Frue, 2017).

ii. Their products are eco-friendly from how they design to how they package.

Legal:

i. Unilever is a consumer goods company that is bound to many rules and legal issues.
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ii. The Company is subject to product safety laws, copyright issues, the safety of

employees' rules, and taxes, in both the United Kingdom and internationally (Frue,

2017).

SWOT

Strength:

i. It is a multinational company; thus, it has a global presence.

ii. It has diversified and a wide range of products where they offer flexible prices.

iii. It uses research analysis for its decisions and development projects.

Weaknesses:

i. Other big companies can copy the products they offer in the UK.

ii. Unilever has a limited diversification in business and outside the consumer goods

industry (Bhasin, 2019).

iii. Being a consumer goods company, Unilever heavily relies on retailers.

iv. There are many substitutes in the market, which is a threat.

Opportunity:

i. Broad market due to millennials and their lifestyles.

ii. Increasing demand for the products they produce and growing United Kingdom

market (Bhasin, 2019).

iii. Unilever can utilize social media for marketing purposes to boost their sales volume.

Threat:
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i. The industry it operates has many rivalries such as Nestle that continue to launch new

products.

ii. Big companies in the UK can imitate Unilever's products.

iii. As mentioned earlier, Unilever heavily relies on retailers. These retailers design their

label brands, thus being a threat to the Company (Bhasin, 2019).

iv. Emerging trends are increasing the use of Ayurveda products, thus being a threat to

Unilever.

Market Competition

Definition and Description

Competition generally is the rivalry among organizations dealing with the same

products and services aiming to achieve profit, revenue, and market share growth. In the

United Kingdom, market competition is the competition between companies in the same

industry; for example, companies from construction industries, airlines, restaurants, etc.

Market competition is advantageous because it motivates companies to increase their sales

volume by applying the four Ps of marketing.

Company of Choice: Unilever Company

Porter Five Forces Analysis

i. New Entrants' threat: new companies in the industries are likely to be more innovative

with new ways of operation (Adamkasi, 2017). This can put Unilever pressure if they

set low prices, reduce costs, and provide a brand value proposition to the field.
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ii. Bargaining Power of Suppliers: Nearly all companies buy personal product industries

from numerous suppliers. If the suppliers are in dominant positions, they can reduce

the margins of Unilever's market share. Powerful suppliers are bound to use their

negotiating powers to extract significantly higher prices from the firms of personal

products.

iii. Bargaining Power of Buyers: Customers always demand a lot. They want to buy

quality products at the minimum possible prices. The smaller and more powerful the

buyer base is in the Company, the higher the bargaining power (Adamkasi, 2017).

That means they can seek for best offerings and discounts.

iv. Substitutes' threat: this affects the Company's profitability as customers may be forced

to go for unique substitute products and quality at affordable prices.

v. Rivalry among Existing Competitors: if its rivals are 'aggressive,' Unilever will suffer

intense effects, and it will dramatically reduce costs, thus affecting the overall

profitability of the Company (Adamkasi, 2017).

Pricing Analysis

Pricing analysis is an analysis of consumer's responses to theoretical prices. In other

words, it is the process of assessing and evaluating a proposed price without considering the

separate cost elements and proposed profits (Kaplow, 2018). Actions by different rivals

integrate all marketing mix and do not focus on price alone. Competition might change a

product or initiate offers and promotions that induce the customer's perception of value; thus,

their price perception.

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Trends

Consumers care about relevance as a service. Human brands are taking on smart

brands. Therefore, to win the competition in the modern business environment, a company

must consider being human and not trendy. Companies are also focusing on changing and

promoting the diversity in their workforce. Today, employees form the backbone of the

competitive advantage. For example, in the United Kingdom, older workforce continues to

leave companies to employ new and younger workforce to further their careers. In addition,

diversity and inclusion is another main issue in industries today. This is becoming a critical

need due to the rise of multicultural millennials in the UK labor force. An example of such a

company is EY (formerly known as Ernst & Young) in the United States, which majors in

assurance, tax, and other advices.

Market Framework

Definition and Description

The framework generally means the organization's management structure that outlines

its policies, aims, and rules to achieve a particular goal (Fuertes et al., 2020). For example, an

innovative framework may include policies, procedures, and management adaptation. In

marketing, a framework contains instructions for how a marketing plan shall be executed.

This applies to other fields, including the software department. It is essential because it

ensures the delivery of a project is following the right directions. In the United Kingdom

market, the government sets market frameworks to manage the needs effectively. The
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framework consists of a set of rules and regulations that determine firms' appropriate conduct

or behaviors and creates the necessary offices to manage and enforce the framework. Without

such rules and policies, markets in the United Kingdom should not be easily managed. An

example is a regulatory authority, which is tasked with ensuring the needs follow the

necessary guidelines.

Application in Business Environment

A framework, as defined earlier, is something that a company uses to execute its

policies. For instance, if Unilever wants to open branch offices or Companies in another

country or the United Kingdom, it will need to perform a PESTEL analysis. In this case,

PESTEL, which discusses the external business environment, is the framework. SWOT is

also a framework that helps a company to make decisions.

Application of Framework

There is a regulatory framework to guide the use of Cannabis, its operations despite

being legalized (Schlag, 2020). Without the framework, the government may suffer from

Cannabis, which can ruin or destroy its market. Another example is the PESTLE framework

used by companies that wish to change or open new operations overseas.

Market Competitive Advantage

Concept and history of Market Competition

Market competition is where different economic organizations seek to obtain a part of

limited goods or services by changing the market's marketing mix elements. Market
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competition makes firms develop new products or services that would give consumers good

selections and the best products (Lábaj et al., 2017). The level of competition within the

market depends on various factors, both on the firms involved in the economy. Market

competition is a dynamic aspect: it keeps changing. Traditionally, (until nineteenth century)

competition among companies was based on prices of goods, but now that customers are

“civilized”, they are more concerned of the quality of the product rather than its price.

Company traditionally had to use little capital and employ few employees to maintain their

profit. There was actually no competition as there is now. The modern competition began

after the end of the second world war

Modern Trends in Market Competition

o Personalization in product design and communications, more organizations are

learning to offer customized products and systems. For instance, pharma companies

moving towards personalized medication based on differences such as age, sex,

weight, and medical history.

o Mobile communications are becoming the center of marketing; organizations are

heavily investing in marketing platforms such as WhatsApp, Facebook, and even text

messages to deliver targeted ads.

o Transparency dictates the brand-customer relationship. Companies are learning that

they will not escape transparency in the media platforms. Failure to meet will lead to

the loss of clients due to losing their loyalty.

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o Personalized data will become accommodating; therefore, it will keep smartly

approaching individuals after analyzing the given individual's behavior.

o Metrics that are more accurate continue to emerge; it is being provided by digital

technology, and it offers precise trajectory; therefore, businesses will be able to make

sound decisions on their investment ventures.

o Difficult consumer purchasing increases. Consumers use more advertising platforms

to make shopping decisions, and consumers research their quality and price.

Strategies marketing and its history

Marketing strategies are plans by an organization to propel forward and achieve their

goals by using forms that could attain a sustainable competitive market and understand the

customers' needs and wants in the market sector. The historical side shows how different

strategic approaches are modified into a useful form.

Relationship between market competitive advantage and marketing strategies

The relationship between market competitive advantage and marketing strategies is

that marketing includes fundamental principles ranging from obtaining data on customers to

analyzing the gathered data and personalizing the relationship between organizations and its

customers through enhanced marketing strategies (Damilola et al., 2015).

Relationship between market competitions and economy

The relationship of market competitions and economics is that competitions between

many different companies and people through free enterprise and open markets of any
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country’s economy. When firms compete with each other, consumers will be able to get best

prices, quality, and quality goods and services, which can boost the economy of the country.

Market Frameworks

Trade fair in the UK

The fair-trade policy in the UK is designed to support the sustainable development of

small-scale enterprises. It seeks to promote equity. For instance, an Ethical Trade Initiative in

the UK aims to maintain an explicit focus on fair trade for small enterprises. Also, Fair Trade

Mark which check on standards to be met

UK Legislation implied on market

o The United Kingdom on advertising has enacted legislation that regulates it; this

ensures that the consumer is cushion from misleading advertisements. When

advertising, a company must be honest, legal, descent, truthful, and socially

responsible. For example, a tobacco company can only claim their products is ‘low in

alcohol’ if it contains from 0.5% to 1.2% volume of alcohol.

o Trade bill, UK business disruption prevention and protect consumers by enacting

powers, which aids in making regulations that will assist in implementing trade

contracts (Trade, 2018). It maintains UK business access opportunities. Create a new

UK trade solution framework.

o UK also regulates the market through pricing legislation through the Consumer

Protection from Unfair Trading Regulations 2008. They ban traders from misleading
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their customers by for example claiming a product has advantages that it literally does

not. For example, Unilever must be honest and fair to the retailers and their

customers.

Effects of UK legislation

o Protecting consumers from unfair trading practices protection to consumers and

illegalize misleading omission. This mostly affects the profit made by certain

companies. For instance, a tobacco company will be forced to prepare alcohol free

drinks, which are quite costly.

o Trade dispute act has influenced trade unions by offering protection from liability

arising from strike actions.

o The legislations have provided consumer protection, trade description act; prohibit

misdescription of goods and services provided in the goods being sold; it prevents

misleading factors as to the goods' cost.

o They are fighting for the rights of the consumers at all costs from outside interference.
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References

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