Competitive Market Business Sample
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6987 Downloads I Published: 24 May ,2017
The changes that occur in the environment have direct impact and influence on the business environment (Meng, sand Layton, 2011). There are external and internal business environment that affects the business such as political changes, economic crises, social factors and technological advancement. Internal business environment includes personnel, finance, marketing, production, operational research etc. This report is based on Jamie Oliver case study born on 27 May 1975, he is an English celebrity chef, restaurateurs, and media personality, known for his food focused television shows, cookbooks and more recently his global campaign for better food education (Meštrović, 2000). Further, this report explains and understands the organisational purposes of business and explains the extent to which an organisation meets objectives of different stakeholders.
It also mentions the way economic systems allocate the resources to the businesses so that it can run smoothly in the market. Moreover, it mentions the way in which business organisation get affects by the fiscal and monetary policy (Lyons, 2009). Also, it evaluates the impacts of competition policy and other regulatory mechanisms on the activities of this organisation. Furthermore, it signifies the merits and advantages of international trade to UK business organisation and analyses the impact of global forces on UK businesses organization.
The comparison of different organisations can be seen as Prezzo is a private restaurant and headquartered in the Woodford Green; Essex is a chain of Italian restaurants in the UK (Hammett, 2001).The first restaurant opened at New Oxford Street, London in November 2002; it has 150 branches all over Great Britain. It is operated as part of the Prezzo restaurant group, which also operates the Chimichanga, Immo and ultimate burger chains in the UK. The other one is Jamie Oliver’s fifteen restaurants established in 2002 by James Trevor Oliver. The purpose of establishing both the restaurant was different from each other as Prezzo established to increase its market share and it is business oriented but in case of Jamie Oliver, it was established to spread awareness for food and is the company oriented and operates through YouTube shows.
The organisation being taken in this report is Jamie Oliver Fifteen restaurant has explained above it aims to educate, empower and inspire people to love and enjoy good food. It makes the people learn the different styles of cooking food through its shows been showed through YouTube (Basedow, and Wurmnest, 2011). It delivers community education programmes about cooking and nutrition to youth and adults.
Mission – The mission of Jamie’s Oliver is to provide high quality training to youth and spread awareness in all over the region. It wants to give everyone the tools, skills and knowledge to make a lasting, positive impact on their lives (Somers, s2010). Further, to raise awareness and individual responsibility, towards the dying food culture around the world and ultimately, keeping cooking skills alive.
Vision – The big vision of Jamie’s Oliver is to train over 1000 disengaged young people for careers in the food industry and to establish a ministry of food centre in every city in the country further, for every primary and secondary schools in the UK to have a curriculum- based growing and cooking programme and to see a decline in diet- related disease as a result of better food knowledge and cooking skills (Dudovskiy, 2013).
Values – It works hard for betterment, happiness, fun and enjoyment, honour all differences, and invite creative thinking and creative being from all.
Jamie’s Oliver stakeholders are divided into two parts like primary stakeholders includes those persons who are involved in the economic transaction of this business such as stockholders, customers, suppliers, creditors and employees (Eekhoff,2004). In secondary stakeholders of this business, it includes the general public, communities, activist groups, and media, business support groups. The extent of this organisation to meet the needs of its different stakeholders can be seen as, in case of government it pay proper taxes, VAT, legislation, and report very truthfully and it fulfil all the legal formalities so that the government policies not become a hurdle in the success of the business. Then employees are being satisfied by giving them good payment so that they become all time motivated with the working environment of this organization and provide the best services to their customers, The overall objectives of this organization is to spread awareness of foods (Reeve, 2014).
Employees are being given proper job security, compensation and respect so that they work with full dedication towards the organisation. Further, it communicates well with the employees of their organisation and listens properly the issues regarding the work and gives them the best solutions. By this way, they are involved in the process of satisfying their employees (Tran, 2003). The customers of this organisation are given proper value, high quality, customer care and ethical products so that the customers get satisfies with its services. It satisfies the community by protecting environment and solves the problems that are related to the environments very calmly. Moreover, the owner get satisfies by fulfilling its motive of spreading its products awareness in the market and to train over 1000 disengaged young people for careers in the food industry and to establish a ministry of food centre in every city in the country.Economy of United Kingdom is fully involved in allocating the resources to its business as UK has the 6th largest national economy in the world. The UK economy comprises the economies of England, Scotland, Wales and Northern Ireland. In UK, there is a mixed economy in which both the state and private sector direct the economy (Julian, and Ahmed, 2012). Jamie’s Olive business works effectively in this economy as the basic plan of the mixed economy is that the means of production mainly comes in private ownership. That markets remains the dominant form of economic coordination and that profit seeking enterprises and the accumulation of capital remains the fundamental driving force behind economic activity. Thus, the private firms like Jamie’s Oliver business firm are free to produce and sell goods. It helps Jamie’s Oliver business to run in an efficient manner, because there is a less inequality of income because intent of government is to have a balanced economic growth of an economy (Donders, 2010). This economy allows the Oliver’s to run their business and make profits. This economy helps this business because of a mix socialism and capitalism in this system. The freedom in the economic activities is influenced by the government’s regulations and licensing policies.
The fiscal and monitor policies has great impact on the business of the James Oliver restaurants, as monetary policy influence the supply and demand for money through interest rates and other monetary issues (Hughen, 2003). This policy is targeted to achieve low inflation in the United States. The Federal Reserve is in charge of monetary policy; it is one of the ways that the US government attempts to control the economy when the money supply grows too fast. The rate of inflation increases and the growth of money supply is slowed too much then economic growth is also low. In general, the US sets inflation targets that are meant to maintain a steady inflation of 2- 3%. In fiscal policy, when government changes the level of taxation and government spending, it influences the aggregate demand and the level of economic activity. It is used to stabilize the economy over the course of the business cycle. It affects Jamie’s Oliver business as it tends to affect particular groups disproportionately (Neal, 2009). A tax decrease might not be applied to the taxpayers at all income level, or some groups might see larger decreases than others. Fiscal and monetary policies are two major drivers of a nation’s economic performances. Through monetary policy, UK’s central bank influences the money supply. In fiscal policy, it directly affects Jamie’s Oliver business as if the tax rates increases then the production cost also increases in that case, it become difficult to survive, business will slow production which means profits also gets decline (Leitch, and Richardson, 2003). In case of decrease in the tax rates, Oliver’s have more money so that it becomes helpful for this business to operate in an efficient manner and to satisfy its regular customers.
Competition policy is made by the government to achieve the highest sustainable level of economic growth. The impact of this competition policy on the Jamie’s Oliver business can be seen as this policy is to guarantee consumer welfare by encouraging optimal allocation of resources and granting economic agents appropriate incentives to pursue productive efficiency, quality and innovation (Hornsby, 2010). Further, it removes the anti- competition outcomes of existing acts, harmonizes laws and policies of centre and state and promotes competition principles proactively. Effective economic policies foster economic welfare by applying a set of market rules that guarantee a level- playing field for this business. A successful implementation of competition policy results in the elimination of anti- competitive regulation and unnecessary barriers to competition imposed by government policies. Anticompetitive business practices are also discouraged by effective enforcement of competition rules. Apart from this, it is very beneficial for the customers as they get the products in low prices. The simplest way for Jamie’s Oliver to gain a high market share is to offer a better price. In a competitive market, prices are pushed down. It is not only good for the consumers when people can afford to buy products; it encourages businesses to produce and boost the economy in general. Further, it provides better quality competition and encourages this business to improve the quality of its products and services to attract more customers and expand market share. Quality means various things: products that last longer or work better, better after sales or technical support or friendlier and provide better services.
There are four basic types of business structure that helps to determine the price and output decision in the business (Hornsby, 2010). Market structure is best defined as the organisational and other characteristics of a market. It focuses on those features that affect the nature of competitions and pricing but it is important not to place too much emphasis simply on the market share of the existing firm in an industry. The different market structure that has direct impacts on the pricing and output decision of Jamie’s Oliver business that can be seen as under:
Perfect competition – It is a market structure that maximizes efficiency, as determined by total surplus. Perfect competition gives more consumers and more total output at a lower price than other market structures (Carr, and Stone, 2013). The only competition is a price competition as firm is a price taker. There is an ease of entry and exit means that Jamie’s Oliver restaurant earns normal, not economic, profits in the long run.
Monopolistic competition - It is differentiated products that allows for more consumer choices than perfect competition. This restaurant does not produce at minimum average total cost. However, this lower efficiency results from consumer’s preference for more choices, not from economic profits (Meng, and Layton, 2011). In the long run, economic profits do not exist. Advertising is an important part of product differentiation.
Oligopoly – Oligopoly is the market structure most responsible for technological advances. Price is above and long run economic profits are possible as long as entry is restricted.
Monopoly – It is a market structure with single seller producing a product having no close substitute. This single seller in this restaurant such as single firm in market is called monopolist. Monopolist can do either of two things i.e. price or output. It means he can fix either price or output but not both at a time.
The organisation based on the case study is Jamie’s Oliver Fifteen restaurant, which operates in the perfect market structure as they allocate resources in most efficient way both productively and allocating in the best manner. It is efficient in the long run and there are no information failure as all knowledge is spread out evenly (Asika, sand Odugbesan, 2000). Only normal profits made just cover their opportunity cost and emphasis on maximum consumer surplus and economic welfare.
Market forces includes the forces of demand and supply representing the aggregate influence of self interested buyers and sellers on price and quantity of the goods and services of Jamie’s Oliver offered in a market (Weil, 2008). In general, excess demand causes prices and quantity to rise and excess supply causes them to fall. Along with these forces, there are some other external forces that are affecting business activities of Jamie’s Oliver such as external environment for marketing is comprises of these uncontrollable forces outside of this organisation. These forces can influence business because businessman does not have any control over them. The uncontrollable forces in the external environment are:
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Competition – Number of similar competitive products’ brands, their size and market capitalization (Zhang, 2006). But it is more important for the manager of Jamie’s Oliver to monitor their activities and then design effective strategies using controllable variables.
Governmental policies – The government policies refers to the laws and legality that guides the land, they go a long way to affect its business operations as a marketer. Like government restriction on the import of a particular product might hinder the marketers playing in that particular field.
Social and cultural forces – The social and cultural forces refers to the structure and dynamics of individuals and groups and their behaviours , believes, thought patterns and lifestyles, friendship etc. Many of these trends goes a long way to affect its marketing operations.
Technological changes - Change in technology affects the business of Jamie’s Oliver in many ways as it is operating its business through uploading its video on the YouTube (Neal, 2009). But because of changing technology again it has to make its strategy regarding posting its video so that it can reach up to the people.
Business, social and cultural environment that helps to shape the behaviour of the Jamie’s Oliver restaurants like social environment of the business means all factors that affect the business socially. This business works in society so societies’ different factors like family, educational institutional and religion affects the business (Lyons, 2009). It includes the culture that the individual educated or lives in and the people with whom they interact. The cultural factors; like buying and consumption habit of the people, customs and traditions, tastes and preferences, languages etc. are the factors that affects the strategy of this restaurant. Further, the cultural environment means an environment that affects the basic values, behaviours, and the preferences of the society. All of that have effect on the marketing decisions. There are some major factor that shapes the behaviour of Oliver’s restaurant is:
Attitude of the people – It includes the people buying behaviour, their choices for buying any goods that directly affects the business as higher the quality of the products results in generating more profits out of it because people are ready to pay the price but the thing is they want worth of it and want the best quality.
Educational institutions – Educational institutions are also main part of the society. They provide good knowledge, education, awareness and thinking that help them to take proper decision.
Income and lifestyle – This is the main and important factor that directly affects or influences the business of this company (Basedow, and Wurmnest, 2011). This is a business that is affordable for the rich people or for those who like to spend outside for their fun and getting pleasure from it. So, it depends on the market also where is operates; their people are able enough to spend money or not.
International trade is the exchange of services, goods and capital among various countries and regions, without much hindrance. The international trade accounts for a good part of a country’s gross domestic product. It is also one of the important sources of revenue for a developing country (Somers, 2010). It helps the Jamie’s Oliver restaurant to expands its business across the world and enhance the domestic competitiveness and takes advantages of international trade technology. It helps the Oliver’s business to gain a global market share. It helps to increase efficiency of trading globally it allows to use their resources like labour, technology or capital more efficiently. If a country cannot efficiently produce an item, it can obtain the item by trading with another country. This is known as specialisation in the international trade.
The impact of global factors on the UK Business can be seen as through diversity as it operates in the different markets and in the different countries the rules and the policies directly affects the business practices in the UK (Zhang, 2006). Economic recession is a business cycle contraction; it is a general slowdown in economic activity. It is period of general economic decline and is typically accompanied by a drop in the stock market, an increase in unemployment and decline in the housing market. Generally, a recession is less severe than a depression.
The role and impacts of the European Union Policies on the UK business organization can be stated as the EU external policies, strategies, instruments and missions overseen by the European external action services. It has four main aims: they support stability, promotes human rights and democracy, seek to spread prosperity and support the enforcement of the rule of law and good governance. The policy mix is vast, ranging from bilateral agreements to guidelines and legislation (Dudovskiy, 2013). Much of the EU’s work with international partners is focused on tackling the challenges facing Europe as well as the rest of the world. It is clear that problems as diverse as climate change terrorism; drugs and energy security have the potential to pose a threat across the world. Through its policies, programmes and partnerships, the EU is an active player in confronting these challenges head on and finding solutions appropriate for the global community.
The report that has been carried out concluded that in order to survive in the competitive market, the business has to be globalised so that it can operate worldwide and can generate maximum profit. This report has assessed the significance of the global factors that shape national business activities (Julian, and Ahmed, 2012). It has also understood the behaviour of organizations in their market environment and explained market structure that determined the pricing and output decisions of Jamie’s Oliver business. Moreover, it assessed the impacts of the fiscal and monetary policy on the activities of Jamie’s Oliver’s business and it further found that this business is in perfect competition market.
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