Analyze Business Environment: Internal & External Capabilities

This assignment requires a comprehensive analysis of the business environment, focusing on both internal and external aspects to identify actual capabilities and skills. Utilize the given references from academic journals and books for a thorough understanding before submitting your evaluation.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Describe the type of business, purpose and ownership of two contrasting businesses.....1
P2 Describe the different stakeholders who influence the purpose of two contrasting
businesses...............................................................................................................................2
TASK 2............................................................................................................................................3
P3 Describe how two businesses are organised.....................................................................3
P4 Explain how their style of organisation helps them to fulfil their purposes.....................4
TASK 3............................................................................................................................................4
P5 Describe the influence of two contrasting economic environments on business activities . .4
TASK 4............................................................................................................................................5
P6 Describe how political, legal and social factors are impacting upon the business activities 5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
In the modern time period, internal environment of company has be to be managed and
controlled with the help of new and smart technologies. It is very important to properly analyse
and evaluate external market environment as well as major factors which can b impacting on
operations and their production level (Baxter, 2012). This research project will be explaining
about different type of business and their major purposes as well as major factors such as social,
legal, political etc. which be influencing on firm. ASDA is of fastest growing and leading retail
company in UK, which is dealing with different type of home products. Its already set an brand
image in external market place and customer's mind.
TASK 1
P1 Describe the type of business, purpose and ownership of two contrasting businesses
Asda Stores Limited, commonly known as ASDA, is the second largest retail store and a
national public limited company. It is a profitable business and it is the subsidiary of American
company Wal-Mart. It was founded in 1949. Furthermore as Asda is a profitable business it is
also in the private sector (Breton‐Miller and Miller, 2013).
Welcare is a local charitable, non-profit organization. They earn no profit out of their
work however do accept forms of donations and fundraisers. The charity was set up by a church
over 100 years ago. It was originally founded in 1894. Furthermore as it a non-profit business
and is giving service it is in the public sector. Purpose of the business: A charity is a group of
profitable people whose aim is to give a service and help those in need. Welcare charity provides
services which include social work and family support, support groups and life skill workshops
and also a children’s health clinic. They work to keep families together, and encourage parents to
give their children a happier childhood (Chaffey and White, 2010).
Asda is a retail supermarket and the purposed of Asda is to make profit and to supply
goods to customers. It sells general merchandise such as food, drink, clothing and various other
items. It also has services such as insurance, financial services and a mobile telephone network.
Business Ownership and level of liability: Asda was founded by Associated Dairies & Farm
Stores Limited in 1949. This is situated in Leeds. The company has limited liability, therefore
any debts within the company are paid by shareholders investment and this means the owner
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wouldn’t have to sell their assets and belonging to pay the debt. Being a shareholding company
you can freely sell shares, this is an easy way to have money contributed to the company.
Welcare was founded in 1894, and was originally called The Diocesan Association for
the Care of Friendless Girls. This company has limited liability, this means any debt is paid for
and the owners do not have to sell any assets (Ciabuschi, Perna and Snehota, 2012).
P2 Describe the different stakeholders who influence the purpose of two contrasting businesses
There will be explained about to companies and major stockholders, ASDA and Welcare
Charity. Firstly Stakeholder is an individual or a group who has an interest in the success of a
business that delivering high results and maintaining the viability of the business’s products and
services. There are internal and external stakeholder which stated under following:
Employees: Employees are people who have contracts with two parties, one being the
employer and the other as employees. Employees rely on their job for pay. Most employees work
for money but there are some who work voluntarily. Employees can work as part-time, full time,
temporary and permanent all depend on their commitments (Grönroos, 2011). Employees are
one of the Stakeholders, they are interested in the business and want it to do well and succeed.
The employees will have job security as they will be well secured by the business. Employees
are interested in good sales and good service to the customers therefore they can get rewards/
promotions and bonus.
Suppliers: Suppliers want to feel valued by the business and get regular orders and also
get paid quick and on time.
Owners: Owners mostly spend a lot of time and money on a business. Therefore
shareholders or the owners like to see that their business is at a high rate of profit and increasing
the profit and also they would like to see the values of the their business is rising.
Customers: Customers want valuable and high quality products at an acceptable and
average price.
Local and National Communities: Employers of local people often have a stake in the
businesses within the community. Financial activities and events significantly effect the local
environment (Hahn and Gold, 2014).
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TASK 2
P3 Describe how two businesses are organised
All organisations need an business structure which can help to manage the business so
that it can be successful. The structure can be shown in an organisation chart which is used to
represent lines of authority within an organisation. Hierarchical structures are used by businesses
to show how an organisation is organised by showing the levels of authority, the span of control
and the chain of command. In a hierarchical structure the person with the greatest authority is at
the top and each level has a subordinate apart from the bottom level. Each level has managers or
employees of equal authority or status. The advantages of a hierarchical organisation is that it
shows the lines of authority, the formal lines of communication between managers and, how
many people each manager is responsible for (Laumer, Eckhardt and Weitzel, 2010).
Hierarchical organisations also show where each individual is in the chain of command
and the status of the post they hold as well as the departmental structure of the business. The
disadvantage of a hierarchical organisation is that it can make the organisation inflexible and
slow to respond to changes such as consumer tastes or market conditions due to the longer chain
of command meaning there are more people in the business. Communications between top and
bottom levels of the hierarchy can be slow as there are more people in the business between the
person at the top and the bottom of the chart. Separate departments can lead to poor coordination
between them and decisions made can be for the benefit of the department not the whole
business. The span of control tells you how many people are directly reporting to and
accountable to the person above them.
Flat organisational structures have few levels of hierarchy and management which are
usually 2 or 3 levels. It has a short chain of command and each manager has a shorter span of
control. Tall structures are very similar to flat organisational structures but instead have a longer
chain of command from the top to the bottom of the organisation. Each manager also has a
narrow span of control (Montgomery, 2011). The advantage of both a flat and tall organisational
structures is that there are fewer managers, so fixed costs of salaries and other employment-
related costs are reduced. There is a shorter chain of command which could lead to quicker and
more precise communication between top levels and lower levels in the organisation. Also there
are wider spans of control. This means that each manager will need to delegate more, which
could result in higher levels of motivation for subordinate employees. However, there are also a
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few disadvantages to a flat organisational structure. There are greater workloads and higher
stress levels for each member of staff.
P4 Explain how their style of organisation helps them to fulfil their purposes
Asda is a company that wants to sell all of the best products to customers and be one of
the best selling supermarkets in the UK. It is a Public Limited company which means that
shareholders own the company which means the ownership moves around a lot. Asda is a private
limited company and was founded as an Associated Dairies & Farm Stores Limited in 1949 in
Leeds. Also the company offer shares to the public. Asda is a tertiary business. This means that it
is a company that sell the products that have been made (Obschonka, Silbereisen and Schmitt‐
Rodermund, 2012).
Asda is a nationwide company but is known as WAL-MART in every other company.
Asda is the Second largest chain of Supermarket in the UK after Tesco. There Products range
from food, clothing, general merchandise, toys and financial services. It also has its own mobile
telephone network (via Vodafone network). Its head office is bases in Asda house in Leeds, West
Yorkshire. Asda have 175,000 employees and have over 500 stores in the UK, the Supercentres
sell more than 40,000 products so you’ll find a huge choice of groceries alongside George
clothing, household goods and electronics. Asda has a hierarchical style which means there are
fewer people at the top of the organisation managing the people below.
Examples of Different Departments at Asda The HR Department work with all of the
department because they are offer training needs and help them recruit key people for the
different functional areas that the business have. For example a buyer may leave the produce
which means that they need someone who has common knowledge of the product. The IT
department also work with all of the departments because they are always looking for new ways
of doing things to help the business progress further.
TASK 3
P5 Describe the influence of two contrasting economic environments on business activities
A period of general economic decline, typically defined as a decline in Gross Domestic
Product (GDP) for two or more consecutive quarters (Zachary, 2011).
Causes of Recession Inflation- Inflation refers to a general rise in the prices of goods and
services over a period of time. The higher the rate of inflation, the smaller the percentage of
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goods and services that can be purchased with the same amount of money. For ASDA, it was not
greatly affected by inflation during the time of the Great Britain recession. Inflation can happen
for reasons as varied as increased production costs, higher energy costs and national debt. In an
inflationary environment, people tend to cut out leisure spending and begin to save more.
Growth is the increase in the market value of the goods and services produced by an
economy over time. An increase in growth caused by more efficient use of inputs is referred to as
intensive growth. GDP growth caused only by increasing inputs such as capital, population or
territory is called extensive growth.
TASK 4
P6 Describe how political, legal and social factors are impacting upon the business activities
ASDA In all the business in the country like Britain, they have to have this in mind that
there are changes that are taking place in the business environment and to the people who maybe
the shareholders. These changes can be the political, legal, and the social factors with the
business environment and the country.
Political factors: These are the decisions that are made by the politicians who have got
all the powers to run the country and control over people and their business. High income means
demands for goods and services will increase.
Taxation: This term means the money that each business pays on each product and that
the business sale. The taxes are levied by the national government like with type of taxes called
the income tax and the local government which may deal with the business rates with the
products they are selling to the customers (Zott and Amit, 2010).
National insurance: This is the required tax that is being paid for pensions like sickness,
and unemployed benefits. This is given to the people who may have left their places of work for
important reasons, like may be age, serious sickness and other things.
CONCLUSION
As per above mention, business environment is affected by many factors that's why it is
very required to properly analyse and evaluate them. Because in the organisation has many
activities and operations which has to be effective manage while using smart techniques and
methods. There has been defined different organisational style and financial position of firm. As
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per that easy to identify actual capabilities and skills. Business environment is manly divided
into two parts internal and external in nature.
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REFERENCES
Books and Journals
Baxter, R., 2012. How can business buyers attract sellers' resources?: Empirical evidence for
preferred customer treatment from suppliers. Industrial Marketing Management. 41(8).
pp.1249-1258.
Breton‐Miller, L. and Miller, D., 2013. Socio emotional wealth across the family firm life cycle:
A commentary on “Family Business Survival and the Role of Boards”.
Entrepreneurship Theory and Practice. 37(6). pp.1391-1397.
Chaffey, D. and White, G., 2010. Business information management: Improving performance
using information systems. Pearson Education.
Ciabuschi, F., Perna, A. and Snehota, I., 2012. Assembling resources when forming a new
business. Journal of Business Research. 65(2). pp.220-229.
Grönroos, C., 2011. A service perspective on business relationships: The value creation,
interaction and marketing interface. Industrial marketing management. 40(2). pp.240-
247.
Hahn, R. and Gold, S., 2014. Resources and governance in “base of the pyramid”-partnerships:
Assessing collaborations between businesses and non-business actors. Journal of
Business Research. 67(7). pp.1321-1333.
Laumer, S., Eckhardt, A. and Weitzel, T., 2010. Electronic human resources management in an
e-business environment. Journal of Electronic Commerce Research. 11(4). p.240.
Montgomery, C. A. ed., 2011. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media.
Obschonka, M., Silbereisen, R. K. and Schmitt‐Rodermund, E., 2012. Explaining entrepreneurial
behavior: Dispositional personality traits, growth of personal entrepreneurial resources,
and business idea generation. The Career Development Quarterly. 60(2). pp.178-190.
Zachary, R. K., 2011. The importance of the family system in family business. Journal of Family
Business Management. 1(1). pp.26-36.
Zott, C. and Amit, R., 2010. Business model design: an activity system perspective. Long range
planning. 43(2). pp.216-226.
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Online
UK Business Environment after Brexit and Trump, 2017. [Online]. Available through:
<http://www.ebs.ltd.uk/news/uk-business-environment-after-brexit-and-trump/>.
[Accessed on 17th July 2017]
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