Business and Business Environment Report

This report examines the business environment of ALDI, a leading discount supermarket chain. It analyzes different types of organizations, the size and scope of ALDI, the structure and interrelationship of organizational functions, and the impact of macro-environmental factors on the company. The report also includes a SWOT analysis of ALDI and examines the interrelationship between micro and macro environments.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of organizations.............................................................................................1
P2 Size and scope of various organizations................................................................................3
TASK 2............................................................................................................................................3
P3 Structure of an organization and interrelationship between various organizational functions
.....................................................................................................................................................3
TASK 3............................................................................................................................................3
P4 Positive and negative impact of macro environment on organization...................................3
P5 SWOT analysis of an organization........................................................................................6
TASK 4............................................................................................................................................6
P6 Interrelationship between micro and macro environment.....................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment is all about study of various factors which is affecting company
performance in various manner. For example; company is getting influenced by changes which
incurred in political norms as company needs to design their policies according to requirement
(Fernando, 2011). Basically, various types of organizations are identified in corporate world and
all of them are having distinct in terms of purpose, objectives, size and scope. Thus, all these
elements are discussed under this follow for understanding various types of companies which are
falls under various sections. For instance; private, public limited and voluntary. Basically, project
is based on ALDI which is a most famous retail organization engaged in offering grocery items
to their desired consumers. Therefore various elements like; positive and negative influence of
micro environment are also going to outlined in this project. Lastly, also focussing in
interrelationship between micro and macro environment in order to understand changes which is
faced by an organization due to fluctuation in these components.
TASK 1
P1 Different types of organizations
Corporate world has been classified into various sections which are having distinct in
purpose, size, scope, aims and objectives. In fact, all the corporations are having their reasons
behind establishing business either they are small, large or medium. Thus, their proper
description are going to explained as below-
Private sector- Companies whomsoever are having their aim to gain maximum profit by
satisfying customer needs and wants are falls under this category. In fact, they are also consider
as profitable association but distinct in terms of size and scope (Hamilton and Webster, 2015) .
Basically, private organizations are classified into various parts such as; sole trader, partnership,
limited company and franchisees. All of these types of organizations are having their own motive
and reason behind establishing business as well as follow different legal structure for running
their business operations. Thus, proper description of various private sector companies are
described as follows-
 Sole trader- If an organization is going to run by a single owner and he/she is liable for
all the profits and liability then these type of associations are known as single trader. For
example; beauty parlour, plumber, general store and so on.
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 Partnership – As per this type if two members or more than that are engaging in opening
a business as well as profits or liability amongst them are known as partnership. Along
with this, they need to follow deeds of partnership act by fulfilling all the major terms
and conditions for controlling probabilities of mistakes and errors. For example; ALDI is
a major example of partnership as this organization was launched by two successful
brothers.
 Limited organization- In this organization various members are engaged for opening an
enterprise such as; shareholders, partners, investors and so on. All of them are investing
in company for gaining competitive advantage as well as high level of profits (Klapper,
Lewin and Delgado, 2011) . In fact , private limited companies needs to follow proper
rules and regulations which is set of legal bodies for controlling probabilities of wrongful
activities. In fact, these companies are having their maximum branches across the borders
in order to generate maximum profit by satisfying clients needs or demands. For
example; ALDI is now having almost 10000 stores around the nation with various
motives and gaining high level of advantage by grabbing international opportunities.
Public sector- These organization are established for facilitating society with best
services in order to uplift entire nation. Their main objective is to develop the community by
protecting all the public places, redesign the infrastructure and offer basic needs to the overall
society. basically, these organizations are run and controlled by governing bodies as well as
funds are provided by government for maintaining the overall nation. For instance; maintenance
of public toilets, defence facility which is provided by government for preventing their nation
from any criminal activities, police for controlling wrongful activity at marketplace henceforth. It
means, these associations are directly connected with government. For example; NHS is a most
successful health care organization which was emerges for facilitating entire society and weaker
sections of society for getting rid from dangerous diseases in free charges. Hence, public
organization are also known as non-profitable as they main motive is to facilitate entire society
with outstanding services (Osterwalder and Pigneur, 2010).
Voluntary organization- Consider as charitable association by offering social services to
those people whosoever are not able to fulfil their basic needs. These organizations are engaged
in offering best social facilities to poor people in order to prevent society from various dangers.
Along with this, Britishers wanted to enhance their whole nation by taking proper initiatives
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because of voluntary associations was established. For example; British heart foundation,
Welcome trust and so on. All these institutions are getting engaged in offering best services to
weaker sections of society from developing them. Along with this trying to fulfil their basic
requirements through which they can live in proper manner.
However , their absence of any legal structure of voluntary organization as they are free
to do any things as they are providing best services to whole society.
P2 Size and scope of various organizations
In the large organisation, there are three kind of sector that includes private, public and
voluntary industries along with their legal structure. This will help in analysing internal business
environment and determine employees performance in effective manner. These sectors are help
country people for getting huge employment opportunities and work for society person (Scheer,
2012). In addition to this, it is necessary for evaluating all three sector overall size and scope
which are described as follows:
Private sector – In this sector, all the main focus of manager is to acquiring high level of
income and profits for analysing their customers needs and wants according to them. This sector
develop and produce innovative products and services at reasonable price. Within an
organisation, manager are mainly concentrate on managing and maintaining their all new brands
and also hold suitable place where they can easily attract their customers towards services.
Size – ALDI is one of the leading retailing company which is located in UK and they
have more than 10,000 stores in across 18 countries. The total turnover of this company is
around 50 euro billion. Along with this, ALDI has two major organisation such as ALDI Nord
and ALDI Sud in which total number of employees are 104,400 who are perform work for
gaining high income or profit (Shigang, 2010). The firm has operating and regulating whole
business in other location like Germany where they are developed more than 2299 Sud and Nord
outlets.
Scope – ALDI is one of the leading supermarket organisation which main purpose is to
provide different types of goods and services to their number of customers at large market area.
Public sector – This is that form of business enterprise which are owned and operated by
government bodies and authorities of UK country. This sector provide large number of
employment opportunities which help people for gaining some income and revenue for their
livelihood.
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Size – NHS is the public health organisation which is situated in united kingdom. This
firm is world largest size organisation in the list of Forbes. There are around 1.7 million
employees in all over the world such as England, Wales, Scotland and northern Ireland of NHS.
They are doing work for higher the country growth and success.
Scope – The main motive of NHS is to provide best health care services and facilities for
fast recovery in their diseases whether they are domestic as well as international people.
Voluntary sector – This is non profit organisation that help in giving appropriate advantages for
a person. British heart is the charitable organisation which is situated in UK and it is the largest
founder of cardiovascular research in the united kingdom (Aterido, Hallward-Driemeier and
Pagés, 2011).
Size – It is large association that are doing work with the help of 1000 neighbourhood
volunteers who are providing appropriate services or facilities for their country people.
Scope – The main motive of this British heart is to provide welfare and well-being to
their society people and needy one for surviving in their lives.
TASK 2
P3 Structure of an organization and interrelationship between various organizational functions
In the every business organisation, there are number of function and activities that must
be performed with appropriate manner. These are interrelated with each other and collaborate to
achieve common goals or objectives in an effective manner. There is necessary to undertake
such functions and activities for running business operation that facilitate to attain best possible
outcomes. ALDI also focus on entire organisational functions that interlinked with other
departments which is essentials in building strong relationship among people and create positive
working environment in an effective manner. Some major department of ALDI are human
resource, production and operations, Information Technology, Finance and accounting, Sales and
marketing department and many others that cooperate and collaborate effectively so that
predefined goals can be accomplished (Bryman and Bell, 2015). These can be understood by
explaining in detailed form such as:
Human Resource Management department: This department is one of the most and
important for every business firm, because in this manage all working people with their
performances to attain objectives and targets. HR manage play vital role in recruiting and
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selecting employees within firm for fulfilling any vacant post and requirements as well. This
department perform various business activities regarding arranging manpower and supply as per
the demands or needs. Apart form these, they play crucial role in organising training and
development programs, performance appraisals, remuneration, reward systems and many others.
Marketings department: This department play an important role in enhancing sales
volume and build good image among competitors. Marketing manager try to adopt best tools
and techniques for promoting business as well as products or services into marketplace with
appropriate manner. ALDI has good reputation in the market place so they also try to maintain
their position and goodwill by adopting better marketings strategies. They focus on analysing
market trends, fashions and situations by conducting research or survey. It support in
determining customer's demands, needs, competitors and current trends that facilitate to produce
effective goods or services and sell them to right customers (Carroll and Shabana, 2010) .
Finance department: This department perform various activities that is related with
finance within organisation as they analyse the entire operations where required adequate funds
to for better performance and completion as well. Manager ensure about requirements of funds
and formulate budget for the purpose of running business functions and generate higher revenues
within time frame. Without funding, it is not possible to accomplish set goals or targets.
Production department: This department is related with marketings department as they
perform various activities as per the informations of market trends, customer's choices and tastes
or preferences, competitors. It help in analysing customers demands and needs so that company
can make decision regarding production of goods and services to meet customers requirements in
an effective manner (Charter, 2017). ALDI also focus on customer's requirement and their
expectations towards products so that they can be satisfied with appropriate way.
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Illustration 1: organization structure of ALDI
(Source- Chylinski, 2016)
TASK 3
P4 Positive and negative impact of macro environment on organization
Brexit: It is defined as the impending withdrawal of united kingdom (UK) from
European Union (EU). Prime minister Theresa May has announced the government intention that
not to seek the permanent membership of the European single market after leaving EU. It is an
abbreviation for Brexit Exit as per the UK decision that to leave European union.
ALDI is a most successful enterprise whose main objective is grab the opportunity across
the international level by taking initiatives measures. Basically, company is having maximum
branches in various nations in order to gain competitive advantage by satisfying customer needs
or wants. Thus, company needs to analyse macro environment due to getting engaged in number
of foreign contracts in order to understand each or every aspects which is affecting company
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success (Chesbrough, 2010) . In fact, external factors is greater influence on an organization in
both manner such as positive as well as negative. Positive and negative affect of PESTLE factors
are discussed as follows-
Political – Governing bodies is liable for framing major rules and regulations due to
which company needs to consider major norms while engaging in various business operations for
distinct purposes. Thus, positive and negative impact political element is described below-
 Positive – Rules and regulations of political bodies are affecting company performance
as managers need to design their policies according to political bodies in order to control
probabilities of mistakes. Along with this, it aids in maintaining the decorum at
workplace by imposing major norms on staff members. As a result, all the employees are
properly accomplishing their assigned job role in professionalism manner.
 Negative – Sometime these norms are act as a major obstacles for company while
expanding their business because restrict manager while involving in foreign contracts.
Along with this, procedures are also too long which resulted in delay of business
activities (Commander and Svejnar, 2011) .
Economic – According to this component an organization need to consider inflation or
deflation rate while running their business operations in order to make changes as per
requirement.
 Positive – Changes in currency rate helps an organization while making business
contracts because sometime profit get maximized because fluctuation. Along with this,
inflation is also enforcing an organization to make changes as per current demand and
supply.
 Negative – On the other hand, modification increase the cost of ALDI as they need to
invest extra income in their business for coping up with sudden issues. For example; if
national economy is not that much developed then company get failed in attaining their
set objectives due to unavailability of consumers demand (Craig and Campbell, 2012) .
Social- According to this element, it has been understood that consumers are liable for
final consumption of products due to which it is essential to analyse their choice or preferences.
As a result, it aids in establishing company goodwill at marketplace by satisfying customer needs
or wants in proper manner. For example; assessment of customer choice is automatically assit an
association towards corrective path while manufacturing qualitative goods.
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 Positive – It helps in maintaining positive relations with various domestic as well as
foreign clients by satisfying their needs and demand. As they can support an organization
by expressing their views or opinions so that ALDI can design their product as per
current demand and choice.
 Negative – Sometime customer choices misdirect the organization as they get confused
in lots of options and don’t know which direction they are going to follow. Just like that,
ALDI is facing this problem while goods for their consumers.
Technology- Emergence of advanced technology enforce ALDI managers to implement
modern tools and techniques at workplace for accomplishing their business activities in proper
manner. as it helps employees while functioning and they can learn more or more things which
aids in their future development also (Dahan And et. al., 2010) . Additionally, it also aids in
preventing organization data from misused.
 Positive – Modern technology helps in completing business operations in proper manner
by satisfying customer needs and wants. Along with this, safeguard the extra duration
which is invested by employees for completing single business activity. As a result,
advanced tools is beneficial for company in various terms such as; prevent their data,
time period and so on.
 Negative – On contrary to this, sometime company can also encountered major problem
because of modern technology such as; high tech tools are not easy to understand due to
presence of complex features. Thus, employees is going to face major issue while
managing business operations and there might be chances of accident if they can’t able to
handle modern tools in suitable style.
Legal- Legitimate bodies are liable for enacting major laws and norms which is impose
on entire corporate world for controlling unethical activities as it may create a illegal
environment. Basically, their main objective is to control illegal task which might affect the
ALDI functioning and sometime they get controlled while expanding business operations
(Drucker, 2017) . Moreover, legal bodies are trying to control possibilities of wrongful activity
by imposing certain rules and regulations.
 Positive – It helps in protecting buyer and seller from exploitative activities which affects
their day to day life. Along with this, some governmental policies aids in controlling
criminal activities that create disturbance at marketplace.
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 Negative – Legal norms restrict ALDI while they are expanding their business across
various nations as well as delay the procedure by implementing various norms. As, it
create problem for company and affects their organizational profit.
Environment- Resources are seen as major element for every organization either its
small or large because all the activities are based on various assets only. For example; labour,
plant or machinery, money, equipments and so on are requisite for ALDI while running their
business operations (Trkman, 2010) . Thus, all these assets are acquired from surroundings only
due to which it is essential to focus on this factor also because it may affect in positive as well as
negative manner.
 Positive :- Provide resources to the firm for attaining their set objectives or goals in a
defined time frame which resulted in maximization of profit level. Along with this, single
change in surrounding have a greater impact on company performance as they might
have to do major changes.
 Negative – If there is fluctuation in current market then an organization is going to face
major issues which affect the company performance. Along with this, cost is going to
maximized.
Throughout the assessment of macro environment it has been understood that company is
getting influenced by all these elements in various manner and they need to make changes as per
these fluctuation in order to control probabilities of losses.
P5 SWOT analysis of an organization
Aldi is a discount supermarket chain that provide quality products and services to their
customers. This organisation majorly introduce their quality range of services in target market in
order to create their own positive image in front of target users. Aldi strongly placed their outlets
at their target locations but now they create strategy to expand their business at international
level. In this process management of firm provide their own contribution in order to accomplish
target objectives effectively (What SWOT Analysis is in simple words. 2017). Major strength of
this organisation is the chain of their stores. SWOT analysis of firm uses to determine their
internal approaches as -
Strength
 Price – Aldi is a supermarket chain in which products and services are available for
customers on desirable cost. Prices of their goods are significantly lower than other
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discount market firm. The cost effective strategy of firm aid to attract maximum
customers in their stores.
 Operating Cost – Aldi uses cost effective approaches for their customers in order to
create long term positive relation with them. In order to implement these strategy in
business process they keep operating cost low. Through this, they can sale their services
at significant price.
 Market presence – Aldi is well k known firm that has positive market presence in
approx. 15-17 countries. Through this, they operate business services positively with
international customers. Main strategy of management of Aldi is to expand their business
services on international level that assist to maximise profitability and growth of
organisation.
Weaknesses
 Poor employees satisfaction – Aldi is large scale discount super market and to survive in
a market they needs to improve their employees skill and overall productivity. For this
management requires to analyse employees needs in order to accomplish them for proper
workforce satisfaction.
 Low margin – Aldi always keep their margin low on products in order to maximise
customers strength in their stores. Major dependency of them are on sales volumes that
aid to manage a target profit for them. It can be prime weakness of Aldi that they can not
gain a standard level of profitability by minimal sales of products.
Opportunities
 Preference for customers – For a business organisation, it is required that they attain
customers properly in order to provide them higher satisfaction. Employees of Aldi
focuses toward preference for consumer by serving exact goods to them on the basis of
their requirement and need. In this process positive communication play a most important
role that determine services users need toward organisation.
Threats
 Competition – Now a days, discount supermarket takes a strong place in market in order
to provide overall goods and services to customers at a place. In this process, Aldi faces
strong competition from existing rivalry and new entrance. To reduce negative impact of
such competitions, management of firm always create new strategies.
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 Suppliers – In order to maximise trading process, Aldi requires to enhance supplier
capability that can associate maximum risk in market. All these business process require
a strong strategy for positive outcomes.
TASK 4
P6 Interrelationship between micro and macro environment
Micro and macro elements are interdependent upon each other in several ways as if there
is change in single component then other factor also needs to little bit modified for coping up
with current trends. In order to manage this issue ALDI is trying to analyse the impact of micro
elements on macro as well as their connection which affect the success of whole organization.
Thus, proper connection between external elements with strength and weakness are discussed as
follows-
Political – Government instability or stability is falling under this element which
automatically influence the organizational business operations. As company needs to make
policies as per governmental rules and regulations for controlling any major mistake (Zott, Amit
and Massa, 2011) . For example; changes in norms on regular basis have a major influence on
company policies.
 Strength: ALDI firm has specialists or groups who circulated around rules and play out
these to run an association, for example, citizens, building brand picture.
 Weakness: Political components can influences on the business since it isn't conceivable
to follow the few approaches or methods.
Economy: Each business are required to dissect practical factors in which included
money rates, development rates, import and fares so it can influences on the business (Ulhøi,
2011).
 Strength: ALDI can build its benefits or pieces of the overall industry through managing
in different nations
 Weakness: It can influences on contrarily because of higher rates of assessments and also
change in cash rates in the nation.
Social: This will incorporates the elements which are available in the public eye and
having critical effect upon the working. The components which are manage incorporates social
viewpoints, states of mind and conviction of clients and way of life patterns (Hair, 2015). It
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encourages the association is to acquire changes their working styles to accomplish higher
outcomes.
 Strength: To give advantage to society substantial number of R&D divisions are working
of ALDI in various nations. They ideally takes think about the nature of items before its
conveyance to the clients (Hamilton and Webster, 2015). It contributes in
accomplishment of their business operations.
 Weakness: Cultural contrasts in ALDI brings about clashes which brings down execution
of workers.
Technology: The elements required to find in this perspective incorporates new strategy
for workings, methods and advancements.
 Strength: Adoption of innovation help to get quality item.
 Weakness: Use of out of date innovation brings increment in cost of creation.
CONCLUSION
From the above report it has been summarized that external and internal elements are
having major influence on their company performance because all the activities are based on
these components only. For example; if there is changes in currency rate of a nation then an
organization need to consider that modification while entering into short or long term contract. It
shows that, assessment of business environment is highly indispensable for success of ALDI as
retail materials are always changes as per consumer choices and preferences due to emergence of
close substitutes. Additionally, proper description of company functions and role of various
department was also explained for analysing its way of functioning. Along with this, one thing is
also determined that all the elements are interrelated with each other and having major influence
on each other. Hence, throughout the study ALDI proper analysis is mentioned in the entire
report.
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