Analyzing Business Environment Factors

The assignment requires students to analyze the business environment of an organization, including its internal strengths and weaknesses, as well as external macro environment factors that can influence decision-making. This includes studying various sources such as books, journals, and online resources to gather information about different business environments and their characteristics.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Types, Purpose and Legal structure of different Organisations............................................1
P2. Size and scope of the different type of organisation.............................................................3
TASK 2............................................................................................................................................5
P3. Interrelationship between different organisational functions..............................................5
TASK3.............................................................................................................................................6
P4. Positive and Negative impact of Macro Environment Factor over Business Operations.....6
TASK4.............................................................................................................................................8
P5. SWOT analysis of ALDI......................................................................................................8
P6. External factors interlinked with Strength and Weakness..................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is a combination of all internal and external factors that make
effect on activities of business enterprise. It is a collection of all individuals including customers,
employees, suppliers, government etc. Factors of business environment includes improvement in
technology, social and economical trends, laws and government activities etc (Business
environment, 2018). This project is based on ALDI which is a retail industry in UK. It is a type
of private company which was founded in 10 July 1946 by Karl Albrecht. Its headquarter is
located in Germany. Main products of ALDI are food, beverage and household goods. This
report will discuss about different types of organisation with with their purpose, size, vision,
mission and legal structure. Interrelation of different organisation functions are discuss. Apart
from this, there will be a discussion about positive and negative impact of external
environmental factors and SWOT analysis of an organisation. At last, strength and weakness of
external environmental will discuss.

TASK 1
P1. Types, Purpose and Legal structure of different Organisations
Business environment is a study of external and internal factors which control and affect
the organisational activities. Generally, there are three types of organisations: private, public and
voluntary. Detailed explanation of these are as follows:-
Private organisation
Private firms are the part of country's economy which is run by an individual or group of
individuals (Alles and et. al., 2018). ALDI is a private company located in UK which deals in
food, beverage, sanitary articles and household goods.
Purpose
Aim of private firm is to earn maximum profit and choose the best organisation structure.
Main purpose of ALDI is to increase market share and ensure long term profitability and
sustainability in market.
Legal structure
Sole trader- It refers to an individual who establish a business and legally responsible for
all the activities of an organisation.
Partnership- It is a formal agreement between two or more person who are managing and
operating business activities with mutual consent. They are agrees to earn common objectives
and share profit and loss as per agreement.
Limited company- It is a form of incorporation whose liability is undertaken by
shareholders of the company (Andersson, Forsgren and Holm, 2015).
ALDI's legal structure is a type of limited company.
Public Organisation
These are the state run organisation which are under controlled by government. Those
firms who raises money from country's revenue is known as public organisation. Environment
Agency is a type of public organisation in UK which was founded in 1995.
Purpose
Main purpose of public company is to provide high quality services in every area. Aim of
Environment Agency is to protect the environment and regulation in England.
Legal structure

Local Government- It is act within the power which is delegated by higher authority. It
act in a small area like town, city etc. and cover a particular region.
State government- It exercise some functions of government and a below level of central
authority. It implement law for state and responsible for local needs and problems arises in a
state.
Central Government- It is a government of whole country and it a political authority
which regulate nation. It helps to maintain world negotiation and national security. It also have
all the powers and authorities.
Environment Agency is under controlled by state government.
Voluntary organisation
It is group of people who enter into a voluntary agreement to attain an objective (Bah and
Fang, 2015). For example:- Royal Mencap Society is a type of voluntary organisation in UK
which was founded in UK. It is a charity firm who works for those people who have learning
disability and fight for providing them equal rights.
Purpose
Main purpose of this organisation is to give support and meet the need of people and
provide them equal rights.
Legal Structure
Charity- It is a form of trust which does not need any membership because is formulated
by group of people.
Association- It refers to the group of persons who are engaged to achieve a common
objective other than profit.
Royal Mencap Society is a type of charitable firm.
Organisations can enhance their business in global market by analysing the environment
of global business and their legal structure (Berg and Kilambi, Siebel Systems Inc, 2014).
P2. Size and scope of the different type of organisation
Private Organisation- ALDI
Background details of the company: ALDI is a type of public company which was
founded in 1446 by Karl Albrecht. Its headquarter is located in Essen, Germany. It deals in retail
sector.

Products and services: ALDI deals in different types of products like food, beverages,
household goods and sanitary articles etc.
Size: There are approximately 1600 outlets in different countries in all around the world
and its online website is www.aldi.com. There are around 58,179 employees in ALDI.
Scope: ALDI served in world wide area such as Australia, Belgium, France, China,
Denmark, Spain and many more.
Mission & Vision: Main vision of ALDI is to modify their grocery industry with an
unique organisation structure and its mission is to provide high quality goods at low prices to
their customers.
Objective: Main purpose of ALDI is to earn maximum profit and attract their customers
by offering them quality products with discount and long term retention in market.
Organisational and legal structure: Organisation structure of ALDI is flat structure and
its legal structure is limited company.
Stakeholders: Internal stakeholders of ALDI are managers, employees and shareholders.
External stakeholders of ALDI are suppliers, customers government etc.
Public Organisation- Environment Agency
Background details of the company: Environment Agency was formulated in 1995 by
government of UK. It is a type of non departmental public body. Its headquarter is located in
Bristol UK.
Products and services: It provide service in protecting environment.
Size: There are approximately 11,200 employees and 8 directors in Environment Agency.
Scope: Environment Agency cover almost whole of England with approx 13 million
hectares of land, 22,000 miles of rivers and 2 million hectares of water.
Mission & Vision: Mission of Environment Agency is to protect and improve the quality
of environment for better health of public. Its vision is to save finite natural resources for
sustainable development (Chang, 2016).
Objective: Primary objective of Environment Agency is to improve the standard of
protection and minimise the damages.
legal structure: It is under controlled by state government.
Stakeholders: Government, local communities, political parties and clients.
Voluntary Organisation- Royal Mencap Society

Background details of the company: Royal Mencap Society was founded in 1946 in UK.
Its headquarter is located in London. It is a charitable organisation whose main focus is on work
with people with learning disability.
Services: Its main service is to provide support employment and meet with requirements
of people.
Size: There are approximately 450 affiliated groups of Royal Mencap Society.
Scope: They provide their services in UK.
Mission & Vision: Its mission is to improve the lives of people and community disability
in UK. Its vision is to work people with learning disability and feel respected.
Objective: Its main objective is to prove equal right to people with learning disability.
Organisational and legal structure: It is a type of non profit organisation and its legal
structure is charitable firm.
Stakeholders: It includes local communities, society, volunteers etc.
TASK 2
P3. Interrelationship between different organisational functions
There are different departments in organisations such as human resource, marketing,
finance, production, research and development department etc. All these departments are
perform together to accomplish organisational goals and objectives (Dawson and et. al.,
International Business Machines Corp, 2015). These functions are interrelated with each other
work at different level to achieve common purpose. ALDI uses these departments for run their
business activities more smoothly. Interrelation between different departments are discuss as
below:-
Financial with production department- Financial department and manufacturing
department both are interrelated with each other. Main function of finance division is to prepare
budget, keep the records of inflow and outflow of cash and provide fund to different
departments. Main function of production department is to manufacturing of goods and services
as per requirement of customers. Production manager coordinate with finance manager to
providing funds to buy raw material and equipments. It helps to ALDI to produce goods timely
and satisfy need of customers which ultimately helps to gain profit.

Human resource with marketing department- Human resource department and
marketing department are important for organisation's sustainability for long run. Main function
of human resource division is to select right candidate who is suitable for a specific position and
provide them training to improve their skills (Deasy and et. al., VMware Inc, 2016). Main
function of marketing department is to identify need of customers and competitors strategy and
make strategy to gain competitive advantage. Both these departments are interrelated with each
other because HR manager recruit and select that best candidate who have knowledge of market
trends and can able to generate innovative ideas for increasing sales in ALDI.
Marketing with production department- It is necessary for an organisation to make
proper coordination between production and marketing department. These are helps an
organisation to achieve their goals and objectives by achieve maximum profit. Marketing
department identify customer needs and production department manufacture the goods to satisfy
their needs. It improve the brand image of ALDI. Manufacturing division is focuses on
minimising cost by optimum utilisation of available resources in production process and
marketing division attract customers by using different promotional techniques such as
Advertising, online marketing etc.
Organisational Structure
Organisational structure refers to a system that outline the direction of certain activities to
achieve organisational goals and objectives (Hair Jr and et. al., 2015). ALDI requires to be
innovative, flexible and efficient in order to gain competitive advantage. ALDI select flat
organisation structure to attain best result.
Flat organisational structure- It is also known as horizontal structure. It refers that there
is no level between employer and employees. Top managers can directly contact with their
workers. It helps to gain benefit for ALDI to make communication more efficient and faster.
Employees also feel motivated and improve their efficiency to increase productivity.
TASK3
P4. Positive and Negative impact of Macro Environment Factor over Business Operations
PESTLE analysis is a technique used by managers of organisation or marketers to
monitor the external environment. It is require to analyse current market situation of an
organisation. Factor included in external environment are political, economical, social,

technological, legal and environmental. These factors make a large impact on business activities
of ALDI either in positive or in negative way. Explanation of these factors are given as below:-
Political Factor
It refers to rules and regulations made by government. Government policy affect the
business activities of any organisation. Its impact on ALDI are as follows:-
 Positive- Government reduces the sourcing cost which improves the energy efficiency
that make positive impact for ALDI in order to gain competitive advantage.
 Negative- In European countries, there is a free trade policy imposed by government
which eliminate the barriers of new entities and create a tough competition for ALDI.
Economical Factor
Economical factor include gross domestic product, national income, inflation, interest
rate, exchange rate etc (Hamilton and Webster, 2015). It play an important role to make impact
on business operation of ALDI.
 Positive- If ALDI contribute their revenue in increasing national income and pay tax on
time then it enhance the brand image of an organisation and become a positive impact on
their performance (Kolk, 2016).
 Negative- There are various plans imposed by competitors of ALDI such as discount
offers, cashback etc. It make negative impact on profitability of a firm because discount
offers attract customers so they move in other organisation to buy goods at minimum
price.
Social Factor
Social factors refers to buying behaviour of consumers and culture of society which
affect the performance of ALDI. Buying behaviour is depends on taste and preference, income
level and living standard of consumers.
 Positive- If ALDI follow culture and norms of society then it helps to increase sales as
well profit of a firm.
 Negative- If organisation does not provide quality product at fair prices and ignore the
culture and taste and preference of consumers then it become a negative impact for ALDI
on their business performance.
Technology Factor

These factors include innovation and advancement in technology that affect business
operations in an organisations in both positive and negative way. It includes technological
awareness, research and development etc.
 Positive- If ALDI uses innovate technology for producing goods and services then it
helps to reduce cost and minimise wastage (Morecroft, 2015). Through which company
gets more profit and productivity.
 Negative- Now a days there are so many competitors who uses innovative technology
and online selling. It make negative impact on ALDI if it does not use advance
technology.
Legal Factor
Legal factors includes different laws and regulations that should be followed by every
firm like labour law, safety standards, consumer protection act etc.
 Positive- ALDI should follow all the laws and legislation made by government to
improve their brand image in front of customers.
 Negative- Penalty is to be imposed on those firms who does not follow the rules imposed
by government.
Environmental Factor
It refers to those factors which are surrounding an environment and play a crucial role in
affecting business operation in ALDI.
 Positive- Products of ALDI should be environment friendly which helps to save natural
resources and does not harm the environment.
 Negative- Sometimes, environmental factors make negative impact on organisation
performance due to heavy rain there a occurrence of delay in transportation by which
customers not get their products timely and it reduces sale of ALDI.
TASK4
P5. SWOT analysis of ALDI
SWOT analysis is a process of framework which is used by an organisation to evaluate
their strength, weakness, opportunity and threats (Sodeyfi, 2016). It helps an organisation to
implement new and innovative strategies to gain competitive advantage and analyse their

position in market. It is important for ALDI to conduct internal analysis which are explain as
below:-
Strengths Weaknesses
 ALDI offers high quality products
at low prices to their customers.
 It has a strong existence in
Germany with more than 2500
stores.
 Production department of ALDI
reduces operating cost which helps
to gain more profit.
 There are more than 1,00,000
employees in ALDI and it operates
their business in worldwide area.
 ALDI is blessed with high level of
customer support.
 With compare to other brands,
ALDI is relatively small firm.
 Products of ALDI are available at
low prices so sometime it become
a weakness for a company
because people think that quality
of products are not good.
 ALDI have less experienced staff
which can't able to satisfy need of
customers (Storey, 2016).
 ALDI have a poor supply chain
which does not able to impact on
global market.
Opportunities Threats
 ALDI have opportunity to improve
their promotional techniques by
investing more amount and beat
competition.
 They have to expand their business
in developing countries where
economies are growing faster.
 They have to focus on customer's
demand which helps in increasing
sales and profit.
 ALDI should have to create a brand
 There are different rules and
regulations in other countries. So,
it is difficult to set up a branch of
ALDI.
 There is a large number of
competition in retail sector.
Competitors of ALDI are
TESCO, Walmart, Amazon etc.
 Government policies and taxation
system affect the profit of ALDI.

image which sale their products in
affordable prices.
Influence of SWOT analysis in decision making process
SWOT analysis is helps to identify the internal and external factors of an organisation. It
tells about the strength of a company which helps in success of a firm. Weakness indicates that
firm need to improve their activities to overcome their weakness. Opportunities refers that
organisation have different alternatives to enhance their business with earning more profitability
and sustainability for long run. Competitors are the biggest threats for ALDI. So, they have to
make decision regarding to beat competition and improve their brand image. Decision making
process helps an organisation to set objectives and generate strategies for long term success in
market. They have to establish a supply chain management to deliver their products at global
market. ALDI also have to use advance technology to improve productivity and earn more profit.
P6. External factors interlinked with Strength and Weakness
There are different macro environmental factors which are interlinked with strength and
weakness of a company. These factors are discuss as follows:-
Political Factor
This factor include rules, regulations and policies made by government which make
impact on strength and weakness of a firm. Strength- When ALDI improve their efficiency and follow the rules and regulations
made by government then it become a strength for a company.
 Weakness- When company does not follow rules and not to make strategies for
competitors then it create a weakness for ALDI.
Economical Factor
Economical factors include the economy condition of a nation which affect
organisational activities. It include taxation system, national income, inflation and deflation etc.
Its impact on ALDI are as follows: Strength- When company pay tax timely then it create a positive image and in case of
deflation, prices of products become low and in that case customers buy more products
which helps to increases sale and profit of ALDI.

 Weakness- When company does not pay tax timely then they have to pay penalty which
create negative image (Virglerová, Dobeš and Vojtovič, 2016). And in case of inflation,
prices of products are high so consumer are avoid to buy goods at the time of inflation. It
reduces sale of ALDI which is a sign of weakness for a company.
Social factors
This factor include social culture, norms and buying behaviour of consumer which is
depends on their taste and preference, living standard and income level of consumers. Strength- When ALDI follow the culture the norms of society and make product as per
the requirement of customers then is helps to increase sales and become a strength of a
company.
 Weakness- If ALDI does not able to identify need of society and avoid their culture then
it reduce demand and become a weakness of the firm.
Technological factors
This factor is concern with innovation in technology and advancement in machinery and
equipments (Aithal, 2016). Strength- When company uses updating technology and using digital marketing system
then it helps to gain them competitive advantage which is a strength for a company.
 Weakness- When ALDI uses outdated technology then it enhances production cost and
reduces profit so it is a weakness for an organisation.
CONCLUSION
From the above mentioned report, it has been concluded that there are different types of
organisations which have different purpose and legal structure. They also have different size,
scope, purpose, vision and mission which make them different from each other. There are
different functions in organisations which are interrelated with each other and helps to achieve
organisational objectives. External environmental factors make both positive and negative
impacts on business activities of an organisation. It is necessary for a company to analyse their
strength, weakness, opportunity and threats which influence decision making process of an
organisation. Company can also analyse their strength and weakness with the helps of macro
environment factors and improve their quality and productivity.