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UNIT ONE: EXPLORING BUSINESS - Assignment Two
- Institution
- PEARSON (PEARSON)
C: Examine the environment in which businesses operate D: Examine business market
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Unit One Exploring Business Assignment Rebecca LinfootExploring Business
I am continuing with my work placement in the Economic Development Unit (EDU) for the
Pocklington council, investigating the business Dunbia. This company, currently trades
within the European Union and using my research, I will write a report that includes an
evaluation on the effects of Dunbia, in relation to the different environmental factors. I will
be working with the local officers who are responsible for the publications.
Dunbia is a division of Dawn Meats, suppliers of choice to a range of leading local, national
and international supermarkets who are a privately owned family business. They are a ‘red
meat food processing company,’ manufacturing beef, lamb and pork. With their 7,000
employees, they are able to slaughter more than 1,000,000 cattle per year. They have
twelve sites in the UK alone and ten sites in Ireland. The nearest site to Pocklington is
located in Bridlington. Dunbia want to ‘provide consistent quality meat products from
sustainable sources’ and have five main values. They are ‘customer focused,’ ‘committed to
a sustainable supply base,’ ‘respect, empower and engage with their people,’ ‘dedicated to
excellence and continuous improvement,’ and ‘act responsibly.’ These values apply to all of
their customers who they serve in over 50 countries. Some examples of existing customers
they supply their meat too, include businesses such as: McDonalds, Tesco, Weatherspoon’s
and Greggs.
PESTLE, stands for, Political, Environmental, Social, Technological, Legal and Environmental
factors. It is a type of analysis used to identify changes within a businesses environment. The
outcome of a pestle analysis, is useful when looking at the strengths and weaknesses for a
business in a SWOT analysis. The method allows a quick and organised view of all the six
factors a business needs to consider which means that it allows a business to make
decisions quicker. On the other hand, as this method is simple, the simplicity may not be
beneficial or as useful to a business than an analysis that is a more in-depth.
A business environment means ‘a collection of all individuals, entities and other factors,
which may or may not be under the control of the organisation, but can affect its
performance, profitability, growth and even survival. Every business organisation operates
in a distinctive environment, as it cannot exist in isolation. Such an environment influence
business and also gets affected by its activities.’ External influences include factors such as
political, economic and social trends, where these aspects contribute to factors involved in a
business that is out of their control.
Political
Political factors are ‘activity related to government policy and its administrative practices
that can have an effect on something.’ Businesses stay active with government news in
order to stay up-to-date with any potential new legislation as these changes are highly likely
to affect how the business runs. The importance of political factors to a business such as
trade control, discrimination and employment laws, means that, when the government do
pass new legislation, a business is able to alter the way they communicate and treat their
stakeholders such as suppliers and customers, which means that they will always try to
maintain a healthy and positive relationship. An example of the government changing the
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, Unit One Exploring Business Assignment Rebecca Linfoot
laws in order to keep a positive relationship is linked to immigration. Without immigration,
there would not be enough people in the UK to cover the amount of jobs that need doing.
There is the ‘Start-up visa route will be open to those starting a business for the first time in
the UK,’ as well as the ‘Innovator visa route that will be for more experienced business
people who have funds to invest in their business.’ Both of these options will allow
supporting people and also business experts, in comparison to just the Home Office that
evaluate and determine immigrants business ideas.
In Dunbia, the main political factor Brexit, means that prices and supplies of their meat are
likely to be at their most volatile since the war, meaning that it is likely to make their meat
significantly increase in price. This would affect their suppliers incredibly, with the large fast
food chain McDonalds in particular having to likely increase the prices of their own products
such as their classic cheeseburger. It is an example of a negative domino effect, with Brexit
creating more expenses, it means Dunbia have to raise their prices and therefore if
McDonalds stay a loyal customer to Dunbia, they too will have to pay the excess, but then
charge more for their products to their consumers and higher prices are disliked by many
and therefore should result in a drop in demand. In addition to this, Britain only currently
produces 54% of what it eats which is a statistic that again, leaves us vulnerable to the
fluctuating markets after we leave the European Union and having this ‘hard Brexit’ could
also result in loss of 32,000 meat industry jobs. Dunbia currently have 7,000 employees but
unfortunately that number could decrease to contribute to the 32,000.
Economic
Economic factors are related to money, goods and services within a business. It includes
evaluating the changes with taxation, exchange rates and other factors such as the
economy’s inflation rate. Inflation, typically happens when the ‘supply of money is too much
in the economic environment market while not equally supported by a similar availability of
goods and services.’ An interest rate is ‘a percentage charged on the total amount you
borrow or save’ and even with a small alteration, it can lead to a big increase on how much
extra there is added for borrowing money. The higher the interest rate, the more expensive
something becomes. Interest rates increase and decrease and this reflects through
economic growth, monetary and fiscal policies. In addition to interest rate, an exchange rate
is ‘the value of one nation's currency versus the currency of another nation or economic
zone,’ and rates affect economic activity, inflation and also balance of payments.
Economic factors are important to businesses because, with a good state of economy, it
means that customers buying products or using the service the business provides, are likely
to spend more, meaning that the business will create sales and further create profit. This is
supported by having a strong economy, and for those who are in employment, it means as
businesses generate more money, income increases, due to a lower inflation rate meaning
that there is more money ‘spare’. On the other hand, if inflation was to become too high,
this causes a negative impact on the economy and therefore effects businesses too, because
it decreases the value of money (only if interest rates are larger than inflation,) and
therefore businesses will see a drop in the number of products sold or customers using their
service. Dunbia, has ten brands within their main company, including names such as Green
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