Business Environment Assignment

Business Environment Assignment

Introduction

This assignment will look into the business environment in a comprehensive manner, highlighting the key factors of its external context. The assignment will look into market structures and forces that determine how markets operate, together with the influences from the political, economic, social, technological, environmental and legal forces. The assignment will provide a thorough discussion on the impact of market forces on UK businesses (Stafford, 2009). The interest in studying the factors of the external environment is inevitable when developing an appropriate strategy for the organization, as these factors result in the identification and assessment of:

The opportunities that the organization could seize.

The risks and constraints that must be avoided, scaled or treated by the organization

Discussion

Market Structures

The structure of a market is primarily influenced by the number of participants in the market and the degree of competition that they offer in relation to the industry outputs. The structure of competition and the market size of each participant cause great influence and impact upon the pricing and output decisions of businesses that is included in the market. Knowledge of the market structure is important for management decisions in the area of ??pricing. The process of formation, establishment and application of the market price of the goods takes place in different ways, depending on what the conditions for the functioning of buyers and sellers in this market (McGrew, 2004). This being the case, an organization must not only assess their prices continuously, but also the processes and methods used to arrive at those prices. Perhaps a logical starting point for an organization is to clearly articulate the objectives they want to achieve through its pricing policies and then evaluate the factors likely to affect the strategies that try to take in the achieving these objectives in the given industry (Ettlie & Subramanium, 2004).

Impact of Market Structures on Organizational Pricing

The type of market structure determines the capabilities of the enterprise in terms of freedom and their pricing level. In conditions close to perfect competition, price is determined by the market as the equilibrium between the amounts of supply and demand. Thus, none of the firms play a significant role in setting prices unless they are influenced by the participants in the market in which they operate. The company in this case, takes the price as given, focus about how to make this price as found to be higher costs, and direct the efforts mainly on cost reduction. The abrupt change in the price the individual manufacturer or an independent establishment of their prices is significantly different in terms of the proposed by other companies operating in this market, it is impossible. Only some general effects for the market factors (changes in tax rates, the introduction or removal of customs duties, the acceleration of inflation) may lead to changes in market prices (McGrew, 2004).

Advantages and Disadvantages of Different Market Structures

The possibility of collusion may adversely affect the price and consumption level in case of oligopoly, and secondly, the payment ...