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Business Environment AnalysisRedFox University Canada West BUSI 601- Prof. Sxxxxxx February, 2020Introduction In the world of business, every day is a challenge and a barrier that should be passed broken, and overcome to succeed. The company would never be the same or influential if there is no risk...

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Business Environment Analysis

RedFox University Canada West BUSI 601Prof. Sxxxxxx February, 2020

2 Introduction In the world of business, every day is a challenge and a barrier that should be passed broken, and overcome to succeed. The company would never be the same or influential if there is no risk or problems involved. After every business trial, a vast reward could be a monitory and brand enhancement and recognition applied. Many employers and entrepreneurs seek this risk and problems filled business environment to succeed and be at the top of the business achievement by respecting the stakeholders' and conducting and practicing businesses ethically. Based on this concept, this report finds ane explores the environmental forces involved in a business environment and how these factors influence and shape the business practices from the current situation. With the pandemic booming and impacting the businesses, this is a very new challenge that no companies predicted would happen. And this has dramatically changed many industries across many sectors of the businesses. Many have lost jobs, and when some businesses are forced to close the doors, some companies got great opportunities with these new challenges. As a business to uphold ethics and run a fair trade has become a challenge for all diverse and extensive corporations. With the governmental, economic, and social forces and their influences affecting the business and changing the ordinary landscape, many employers have become a tremendous challenge. With this in mind, let us see how the pandemic has affected the FMCG sector and the environmental forces that are affecting the post-COVID-19 landscape. How it looks like after the pandemic and the ethical implications the business is influenced with, and the steps taken to resolve or avoid it.

3 COVID-19 affects on FMCG sector and its retail industry. Covid 19 has dramatically affected and impacted all the countries economically and socially. It has devastated personal lives by grabbing many loved ones from families and many in hospital beds for months. This virus has affected our daily activities and routines and brought many life-changing impacts to our lives. This virus had a significant impact on many businesses, but some companies were greatly affected, such as FMCG, hospitality, travel, and tourism. And the effects on these businesses are still going with the pandemic situations. In this report, the main highlight would be focused on the FMCG sector, including retail, and what effects this virus brought to this industry. In Fast moving consumer good, there are many sectors from food, clothing, shoes, consumer electronics, and many more industries. Still, in this report, I will be focusing on the mention four sectors. To my knowledge, these four industries faced a significant impact due to COVID restrictions and preventions made by the government. In the early months, when Corona was spreading rapidly, the limits were very severe. Many businesses were significantly affected by this pandemic as the government put the curfew on the affected area. Many more restrictions as the number of people to gather in a specified place and one deterrent condition between peoples affected many of the FMCG retail business. There was a great downfall of business in this period of early months last year. Though the businesses are now commencing as useful and had improved with less restriction, there are still concerns and could expect some permanent regulations to be placed for the retail sector. Pre COVID, most customers prefer to visit a shop physically and purchase the goods. Still, most like to buy goods online, and online marketing and retailing got a tremendous boost after the covid situation.

4 Question 1 First, let us focus on the environmental forces which affect the FMCG sector in this given situation. These forces, such as Political force, economic force, social force, technological force, environment force, competitive force, and global force, affect the selected industry and the most affecting force in this situation. This COVID 19 pandemic could be categorized as an environmental force and a global force influencing the business. The main reason for the spread was the changes happening in the environment. If the climate was kept much cleaner and citizens and businesses had cared for the environment, this pandemic could be avoided entirely. As it is believed the COVID-19 originated from China, spreading to the world, the global force, and the environmental force influence, this pandemic was able to spread to all corners of the world. COVID 19 changed consumer buying and consuming patterns, which affected the overall food and beverages industry and mainly affected the supermarkets and small grocery stores nationwide. In the early days of COVID 19, there were concerns that most people involved with the virus had unhealthy food consumption (Conway, J. 2020). This assumption triggered belief within the consumers the health and sustainable living and consumption pattern. The FMCG sector's social culture forces dramatically changed consumer thinking patterns and consumption, significantly impacting many supermarkets, fast-food outlets, and other restaurants. The other primary concern that most retail outlets faced was the fear the virus could spread with touch. When a virus victim touches a product, the virus could be found in that product, and when another customer touch could spread to the present person. This fear of the virus provided a significant setback to many stores throughout the world. For this reason, the political forces, the government, and the medical health bodies of infectious diseases played a significant role in limiting the

5 customers within a store and made many restrictions. However, in a vast store or a small store, only a limited number of people were allowed to purchase goods (Conway, J. 2020). Many changes are happening in the retail infrastructure, such as some retailers are introducing robots to minimize the human touch in on direct consumption goods such as fruits, vegetables, meat items, and bakery items. If the robots were introduced, they have to modify the robots to handle these delicate products, but this is a significant change in the infrastructure of a food store and post covid to reduce the number of lines in checkout counters the self-checkout options are introduced as customers can scan their barcodes pack their goods and self-pay the amount using their credit cards this method can reduce the human interactions and touch in a checkout counter (Jones, A. M. 2019). In this instance, the technological and social forces of the FMCG industry are influencing the retail store. As mentioned above, the lockdowns triggered an increase in the digital marketing and online purchase frenzy, and many began to try e-commerce websites to purchase goods and services. However, only a certain amount of retail got the maximum out of this online purchase opportunity because of this situation (Ho, S.

2020). Due to governmental intervention in

lockdowns and implementing rules and regulations, most small-scale FMCG stores began to face great hardships and meet the achievement and breakeven. This was a great example of how the FMCG sector's technological force greatly impacted the many retail stores worldwide. Moreover, when competitive forces began to involve the businesses, and some stores had e-commerce websites, they lacked delivery service capabilities. This medium began to lose profits and reputation by not delivering the preorders they took without proper planning. Another fact is that many retail stores' direct stakeholders, such as customers and employees and other internal stakeholders, shifted their focus on many other businesses due to closer and more lockdowns.

6 Many retail store loyal customers moved to competitors who owned online shopping facilities, and many employees and managers were laid off due to high expenses and cut costs. Another significant change in the FMCG sector was the supply chain began to tremble and go disoriented due to the virus because this mainly affected the supermarket sector because of the lockdowns, most of the roads and workforce were cut down (Fs&a global industries group, 2020). Hence, the big farmers were unable to harvest the crops. Many tons of vegetables and other perishables were gone to waste, and as big Sunday and wholesale markets began to close due to the fear of mass gathering. There were multiple barriers to selling the goods and do B2B or B2C businesses, so with this, the suppliers' sales were lost for the whole third quarter of last year (Accenture, 2020). Suppliers were another major stakeholder of the FMCG industry. In this situation, the FMCG sector's political forces influenced the lockdowns and curfews that impacted this sector. In Canada, life has turned to normal, but there are many regulations in place, such as the one-meter distance rule. This rule has changed the retail structure significantly because compared to pre-COVID, the isle's allocation had to expand; in the checkout line, one-meter distances should be maintained. Because of this the retails stores had to remove some isles and shelves to make space through this they are losing profits. Before COVID 19, many worldwide shipping transportations were happening within countries, but post-COVID, all imports, and exports stopped to fear the spread of this virus. Due to this, the countries that depend on the exports' income were cut down. This impact was hugely felt in the clothing, shoes, and consumer electronics industries. Because most developing Asian countries are mostly dependent on the import and export, this could be from foods, clothes or electronics. As the imports and exports' shutdown began to expand, a considerable scarcity of necessary food supply was cut down. For instance, most consumer electronics are produced in

7 China, and these electronics are distributed to all parts of the world. This is not only for Asian countries; however, in Canada and the United States, the Chinese manufactured electronics are sold. Thus, the trade shutdown between the suppliers and the consumers has dramatically impacted the businesses and citizens' lives. In this situation, the primary force that influenced the companies was the selected industry's Global force. To my knowledge, in my home country, the clothing and shoe industry was greatly affected due to lockdowns and shutdowns of imports and exports because Sri Lanka is mostly dependent on garments and tea, and other exports. Still, in retail, we import many international brands from foreign countries, but no cargo is permitted within the country due to the ports and airports' shutdown. Thus, many retailers were forced to close doors and became bankrupt and had to miss the vital shopping season sales due to lockdowns and curfews the government placed to stop the spread of COVID 19. These are some of the changes the post covid brought to the FMCG industry as a whole. This change is predicted to last throughout this year to stop the spread of this infectious disease. Many other problems affected the FMCG sector; however, to my experience and understanding, the above were the most prominent areas and forces that greatly influenced Canadian businesses and all of the countries worldwide. Due to this virus outbreak, many internal stakeholders were affected by losing jobs and layoffs. Currently, the situation is turning to normal as staff and customers are more aware of this disease's implications.

8 Question 2 As for the next question in the assignment, the ethical implications of this particular situation can be explained using individual, organizational influences, economic influences, governmental influences, and social influences. In this situation, FMCG's effects due to COVID 19 were mainly because of governmental influences. To safeguard society and spread the virus, the government and the legal bodied implemented lockdowns and self isolations all over Canada. This move affected most of the retail industries and businesses. Unlike other companies in long-term lockdowns, most short-term perishables such as fresh items, vegetables, and fruits were in the retail stores' stocks perished because there were no customers to purchase the goods. On the other hand, the clothing and shoe stores were not much affected in the short term. However, for a long time, without adequate amounts of customers to buy the products and without any imports coming to the country, new fashion items could not be imported into the country. Due to low customer walk-ins within the FMCG stores, many businesses were out of sales as months went by. The economy in many countries fell due to low production and manufacturing. This effect ultimately affected many companies. This effect was intensely felt in the retail stores' employees were laid off and fired because of low sales. The economic efficiency ethical implications influenced most managers. Where to save costs and breakeven, they had to lay off the employees and cut costs. The food and Beverage sectors were not much affected because the stores were getting low customer walk-ins at a time. However, the essential goods demand was remaining because the economic influences did not apply to the food and beverage industries. After the first wave of the COVID 19 virus, many FMCG sectors' business was not sustainable to run further. Many stores and small businesses were forced to shut down or lease out

9 due to low sales, which mainly affected the societies within these retail locations. Due to social pressure of the social groups and independent protests to preserve the community and spread the virus, many businesses were forced to make changes to the store designs. By incorporating the self-checkout counters, making face masks mandatory to the customers, providing hand sanitizers, and extending the space between the shelves to maintain the 1-meter self-distancing and preserving and informing the customers personal information if there are any virus victims visited the store informing them about further steps. Because of these reasons, many of the businesses were influenced by the social influences of society. As mentioned up due to this virus, most of the retail stores had fewer customers, so ultimately, this affects the organization's overall sales. Many employers are laying off their employees, but while some layoff their valuable workforce permanently, some retail stores had layoff the employees on a temporary basis. When this virus's situation turns to normal, they will rehire the laid-off employees and back to the workforce. These companies are following the organizational influences and practicing ethical business practices. Reitmans Canada temporarily laid off its 4000 employees by shutting down some of its stores and 270 office workers due to this pandemic. Aldo group has temporarily laid off its 6800 store associates across all locations (Zadikian, 2020). However, while Raitmans and Aldo temporarily laid off their employees, some retail stores permanently laid off their employees due to this virus situation. According to the United States Bureau of labor statistics, by February of last year, there were more than 15.7 million employees in the retail industry pre-COVID; however, by March and April, the total number of employees had dropped to 2.4 million, but because of the excellent and ethical practices of the retailers when the stores began to open by June an estimated 14.4 million employees were rejoined into the workforce (Repko et al., 2020).

10 According to this instance, there is no precise answer to this issue and ethical implications because a pandemic is inevitable. There is no stopping to it until a vaccine or regulations are placed to avoid it when it spread. The government, society, and corporations always try to bring their plan and contain the situation in their perspective. But with this situation as it was a new and dangerous virus spread, the governments needed to place in the rules for the betterment of society, which could ultimately protect its citizens. This is safe for the community and its influence on the businesses. To avoid these ethical situations as an operation or a business, they could treat their employees ethically as mentioned up rather than terminating them permanently out of their job; laying off the employees temporarily could provide them a sense of loyalty and job security. However, the businesses do not influence the governments, and its steps to preserve unity and equality by safeguarding the further spread of the virus as businesses are responsible for following the rules and maintain control over their customers implied the government. By doing this, they would not be subjected to any further actions for breaking the rules and regulations. This same method applies to social influences because the government's power directly influences the business. Breaking these could damage the brand loyalty and damage the brand image so that respecting the request and moving forwards would be well recommended in this situation.

11 Conclusion The pandemic brought so much change to the FMCG sectors as a whole, from the manufacturing plant to retail and supply chain. These effects are predicted to last over many years because the devastation this pandemic brought was immense. It was not expected this virus outbreak would get this much change to this sector. After the pandemic outbreak and to prevent it, the political forces placed lockdowns to avoid it. This move greatly affected the retail store; however, this also helped the retail stores who had online market facilities to thrive and earn more this was the technological force in action. But as a whole, the main reason for the spread of COVID 19 was the Global force influence. The country that was affected first did not take any prevention facilities to contain or educate further about the fear of spreading to other countries. According to the ethical implication, we can correctly pinpoint the how-to avoid this or resolve this situation. However, as the manager, when making a decision, they have to make sure to consider the human element when making further decisions. When laying off the employees than doing it permanently lay off temporarily until this situation comes to an end could increase the morale of the employees and increase the loyalty among them. Other steps follow the government's rules and regulations and respect the request made by the social influences to uplift and increase brand loyalty and increase sales.

12 References Accenture Now Next: Consumer Goods and Services. (2020, APRIL 1). COVID-19: The impact on consumer goods. Accenture. https://www.accenture.com/ca-en/insights/consumer-goodsservices/coronavirus-consumer-goods-rapid-response Conway, J. (2020, Sep 10). Impact of the coronavirus pandemic on the global FMCG market Statistics & Facts. Statista. https://www.statista.com/topics/6248/covid-19-impact-on-the-fmcg-marketworldwide/#:~:text=Some%20consumers%20are%20resorting%20to%20stockpiling%20water%20and% 20food.&text=In%20the%20United%20States%2C%20places,items%20at%20an%20increased%20rate. Fs&a global industries group. (October 2020). Fast-Moving Consumer Goods Post-COVID Implications. 1-20. https://av.sc.com/corp-en/content/docs/FSA-Post-COVID-Implications-for-FMCGPublic-Version.pdf Jones, A. M. (2019, December 27). Things will never be the same again': What will the retail landscape look like in 2020?. CTV News. https://www.ctvnews.ca/lifestyle/things-will-never-be-thesame-again-what-will-the-retail-landscape-look-like-in-2020-1.4744311 Ho, S. (2020, December 28). Retailers had an ugly year in 2020. What will 2021 look like?. CTV News. https://www.ctvnews.ca/business/retailers-had-an-ugly-year-in-2020-what-will-2021-look-like1.5246161 Repko, M. Thomas, L. (2020, JUL 22). Retail workforce could face permanent decline as companies take blow from pandemic, lockdowns. CNBC. https://www.cnbc.com/2020/07/22/coronavirus-retail-workforce-faces-permanent-decline.html Yaqub, S. (2020, October, 2), FMCG – COVID-19 Has Changed the Game. Standard chartered bank. https://www.sc.com/en/fea...