200820: The Contemporary Business Environment - Essay/Report Assessment

The Contemporary Business Environment

Task- This group case assessment is designed to develop your ability to analyse a particular business. Set as a group task, this assessment will enable you to draw on the collective learning of your group. The assessment is expected to demonstrate your capacity to synthesise and utilise the frameworks, theories and concepts introduced in Sessions 1-5 to: 1. Identify the economic, socio-cultural, political and technological environments within which it operates. 2. Discuss critical issues that influence the effective operation of the business in a global business environment. 3. Interpret, from a strategic perspective, the implications of the business’s decision making across all key areas of business activity.

1.0 Introduction

Businesses have environments in which they operate. These environments affect the manner in which operations are conducted within the business activity. Therefore, it has an integral component with significant impact on the operation's success. The business environment is a combination of both internal and external factors that exist to influence the operations of the business in various ways. The internal factors include the operations that affect the running of the business from within. These factors can be controlled or influenced by the management of the organization. On the other hand, the external factors refer to elements that are beyond the control of the organization yet they influence their operations (Conklin 2011, pp. 80). The business environment is characterised by people such as clients, customers, government, employees, suppliers, and laws, among others. Various factors influence the occurrence of these environmental factors. In some cases, these factors may work for the benefit of the business while in other cases they may work against the performance of the business.

2.0 Business Environments

Haldiram’s is a company that deals with the manufacture of sweets and snacks within the Indian Republic. The economic environment has a great influence in the operations of a business. The economic environment is comprised of the employment, income, interest rates, inflation, productivity, and wealth. Their interactions and cross linkage makes operations possible or a success based on the underlying factors. These factors influence the buying behaviour of consumers. The company is in the business of manufacturing sweets and snacks. These products are highly common among people of different age groups. The different age groups form the key clientele bases, hence determine the sales capacity. However, the young population is most fond of the products the company manufactures (Hamilton 2012, pp. 90).

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The company sells its products internationally and offers free shipping. This raises the revenue income for the company. The socio-cultural environment consists of the customs, and beliefs within the society. For the company, this is targeted at the people who make up the target market for the company. The social environment is constructed by the society that is in place. His company’s social environment is comprised of the consumers. For example, some of the products produced by the company were banned in the U.S because of pesticide adulteration. The pesticide chemical is in violation of the U.S laws (Bowles 2007, pp. 90). One of the customer markets has imposed various a social laws, that are used to govern the operations of the business transactions. The political environment refers to the state, the government and its legislations that have an influence on the business system. The government passes forwards legislation that will influence how operations are conducted in any business. At Haldiram’s, the government of India makes up the political environment. The government has passed laws that control what is produced and sold by the company. For example, the American government has passed laws that have barred the importation of some products belonging to the company (Autor, Dorn & Hanson 2013, pp. 2150). However, the same laws are not present in India, which makes it possible for them to produce these products. The technological environment refers to the external factors in technology that may influence the operations of the business. Technology may cause a business to drastically change its operating strategy. This company has a technological environment that is comprised of the software platforms it operates in. The company has a website that it runs and uses to interact with the consumers. Consumers can interact with staff members within the company through the website. The use of emails is also high;ly popular. The company also has some social

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media platforms, which it uses to for the interaction processes. Consumers can also make their order through the website, and the products will be delivered to their desired locations. 3.0 Discussions The business environment possessed by Haldiram’s, influences its operations within the business environment. The company is a global company based on the expertise it does in other countries. It is a major exporter of the sweets and snacks that it manufactures. However, there is a global business environment that influences the operations of the business. The global business environment is a combination of the influencing factors of all the countries that import the company’s products. The legislation implemented in other countries may affect the business operations of the company. For example, some of its products are banned from the U.S. This is because they have traces of pesticide adulteration. Such food products are banned from U.S. following legislation that was enacted in the year 2015. This means that the company will reduce its production capacity due to a reduced customer base (Shim 2008, pp. 78). Therefore, the political environment plays a major role in the operations conducted by the company within the global business environment. The socio-cultural environment plays a major role in business operations within the global business environment. People from different cultures have different beliefs and customs that they follow and observe. Also, different cultures have varying perceptions on is the best product they should consume. Haldiram’s Company should place focus on these cultures. For example, there exist some countries that do not consume certain food products. This means that the company will not be able to sell the products it manufactures to all countries in the world. It is for this reason that the company should examine the target market and ensure that the products produced are conducive to use in every location that has been identified as a

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target market (Velasquez 2012, pp. 60). Therefore, they must consider the feelings and beliefs of other people in the world, during the manufacturing process. The economic environment of the company also affects the operations of the company from a global perspective. When there is an economic crisis in one country, the company will experience diminished sales in that company. However, the company will have incurred huge expenses in the process of transporting the commodities to these other countries. The currency power of the respective countries also plays a critical in the business operations of the company. This environment gives the company an opportunity to conduct its operations in the most effective and efficient manner. 4.0 Strategic Perspective The business environment results in the critical decision-making process that is associated with the business operations that are conducted in the company. The business decision- making process is facilitated by these environmental factors. The business decisions will exist for the benefit of ensuring that the company is in a position to make the most out of the business operations that are conducted. The business decisions that are made are meant to alter the business operations for the better. For example, the company can alter the ingredients that are used to manufacture some of the products it produces. This means that the products will be accepted in many countries across the world. The decision means that the business will have increased sales and revenue collection streams. Increased business opportunities directly translate to increased profit margins, thereby making the company more successful (Bovee & Thill 2013, pp. 67). This decision also means that the company will comply with the legal requirements of other countries. This is a strategic decision that's been made that works to the best benefits of the company.

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The company can also make financial decisions bases on the economic environment. When there are minimal buyers, the company can implement measures that help it to cut down on the operational costs. This will make the company more profitable and economical. These decisions will also be dependent on the location of the target market. This information will be used to determine the cost of delivering the finished products to the market. Minimal operational costs will directly translate into increased profit margins. All these decisions are made to ensure that the company remains as efficient as possible (Kew 2008, pp. 101). Increased efficiency and effectiveness will help in improving the profit margins of the company. Companies require gaining a competitive advantage within the market. A competitive edge will help the company to make increased profits. 5.0 Conclusion The business environment plays a major role in the operations of business. The business environment dictates the success or failure of a company. Also, it dictates the strategic decisions that can be made to improve the operations of the company. The global business environment has a different effect on the local business environment. These environments dictate the rules to be followed when conducting the business practices. Haldiram’s Company made use of the business environments to develop strategic decisions that will help the company to gain a competitive edge in the market. Gaining a competitive edge means that the company will increase the revenue collections in the form of profits. Also, the sales will increase, and it will attract a wider customer base. The company has followed all legal requirements to ensure it has complied. This will give it the authority to sell its products in the current state.