Business and Business Environment Report

This report examines the business environment, focusing on the UK retail industry. It analyzes different types of organizations, their size and scope, and the interrelationship between various organizational functions. The report also examines the impact of macro-environmental factors using PESTLE analysis and analyzes the strengths and weaknesses of Tesco using SWOT and Porter's Five Forces model.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
I )................................................................................................................................................3
1 )Different types of organisation ..............................................................................................3
2 )Size and scope of a range of different types organisation......................................................5
II )...............................................................................................................................................6
3 )Relationship between different types of organisational function that help to achieve
organisational goal...........................................................................................................................6
III ).............................................................................................................................................7
4 ) Positive and negative impacts of the macro environment upon business operation..............7
IV )...............................................................................................................................................9
5 )Internal and External analysis of the organisation..................................................................9
6 )Interrelation strengths and weakness with external macro factors.......................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business can be refer as an organisation or enterprise, that connected with thye
commercial, professional and any industrial activities and operation to make effort to produce
goods and sell them for profit in the market.
Business environment is the collection of all the activities, institutions and all the outside
forces that affect the business activities and operation. But this environment of the business sum
of all these factors and also depend on them to their sustainability and overall performance. This
report of business environment will explain different types of the organisation working in the
market and their size, scope and propose to do business in the market. This will also describe
their different structure and functions of the business and they help the organisation to achieve its
target and to create healthy environment. From this report will find positive and negative impact
of the external environment on the business through the PESTLE analysis and will also get to
know the internal factor with the help of the SWOT analysis tool.
I )
1 ) Different types of organisation
There are three types of business organisation which runs in a market with different
purpose. These organisations are profit or private, public or non-profit and non-governmental
organisation or voluntary organisation. Which help to increase the growth of the economy of
country. These organisations operate in the market in order to achieve its overall goal to increase
its market share to help the economy. These different organisations are profit organisation who
only work for top gain maximum profit, non profit, which work for to deliver the services to
their customers and non governmental (NGOs) which operate to well fare of the society.
LEGO: LEGO is privately help company. Its headquarter is in Billund, Denmark. This company
manufactured plastic toys. Founder of the company is Ole Krik Christiansen, who found this
LEGO group in 1949.
Bank of England: bank of England is central bank of the United Kingdom, which is public
sector organisation. Governor of the bank is Mark Carney. Its headquarter is in Thread needle
Street, London, United Kingdom (Teece, 2018).
UNISEF: UNISEF which is known as United Nations International Children's Fund, which is
founded on 11 December 1964. its headquarter is in New york city, United Kingdom. It was

created to provide emergency healthcare and food to women and children's in developing
countries.
Basis Lego Bank of England UNICEF
Type Private or profit Public or non profit Voluntary or NGO
Purpose The main purpose of
this private sector
company is to
develop and inspire
children to think
creatively for making
the future of play. It
wants to pioneer new
and different ways of
playing (Beatty,
Samuelson and Abril,
2018).
The main purpose of
this public sector
organisation to
maintain and provide
financial & monetary
stability of UK
financial system to
meet UK's
governmental
inflation target.
It is a United Nations
Children Fund. The
main purpose and
objective of this NGO
and fund is to protect
children and women
rights by fulfilling
their basic needs and
provide them
healthcare and
emergency food.
Legal structure This company has an
executive team who is
made up of 12
members and one
board of director. The
main function of these
structure is to set their
company's strategies.
It follows the sole
trade structure in
business.
This bank consist the
court of director who
has 5 executive
members. This board
and court has
responsibility to set
the organisational
strategies with the
main aim of taking
the corrective
decisions (Hamilton
This NGO or
emergency fund is
also governed by an
executive board that
consist 36 members.
These members are
being elected to terms
of 3 years by the
United Nations' social
and economic council.
Its legal structures is

and Webster, 2018).
This organisation's
legal structure is
formed by the
government
partnership.
made by its executive
committee.

2) Size and scope of a range of different types organisation
Scope can be refer as the opportunities in the market for the business in future, weather it
can grow more or not. Size of an organisation is based on the number of employees in the
organisation and the its market share as compared to other organisation. On the basis of the size,
number of employees, and its share, any organisation is called as the small and big organisation.
Employees Businesses % of total businesses % of total private
employment
Small (10-49 employees) 177,950
businesses in
UK
14.30% 17.30%
Micro (1-9 employees) 1022695 82.30% 19.20%
Medium (50-249 employees) 29750 2.40% 14.50%
Large ( above 250) 6455 0.50% 48.60%
Private organisation – Sole proprietorship is type of small business organisation which is being
operated by the single operator or owner. Private limited companies are those which is operate
business at small level. For example: LEGO is a private organisation which consist of 19,000
employees in company who help to operate all kind of operation and work at different location in
42 offices. Revenue of the company is 37.9 billion in the year of 2016.
Large scale and public organisation - Bank of England is public limited and large organisation.
Bank of England is the oldest and largest Bank which is completely owned by the government.
There are around 1.4 billion employees are working in this field at different location for Bank of
England. It has reserve of around £403,000,000,000. the size and scope of the large scale
organisation and public limited organisation can be determined on the basis of their services.
NGO or Voluntary organisation – This voluntary and NGO organisation are owned and govern
by their own member and free from any outside force or external control. For example, UNISEF
who has 36 national committees. It has its branches in more than 1902 countries and almost
7,000 employees are working there. Its executive board is responsible for managing business

operations as its total income is approx $5,009,557,471 and 92% of revenue is being distributed
to programmes services.
M 1 and D 1
In the context of size and scope, this company sold around 75 billion parts and 3,700
shapes. It has also launched its 335 new sets. According to law, Public limited enterprise must
have at least 7 employees and can be exceed to maximum number (Beatty, Samuelson and Abril,
2018). It is important for the large and public organisation must appoint two directors.
3) relationship between different types of organisational function that help to achieve
organisational goal
Organisation structure is he outline of all activities how these are directed in organisation
in order to achieve target. And function refer to all the operations which perform different task
and activities such as marketing, human resource, and etc.
There are many activities and functions in each and every kind of organisation that help
to organisation to achieve its overall organisational goals. These different function of the
organisation are also interconnected with each other in order to help each other and affect
decision making process and provide ease in smooth running of the operation of the organisation.
Marketing and production
Marketing department need to closely work with the production department. As the
marketing department assess and analyse all the marketing need, demand and requirements of the
customers, and also analyse the competitive advantage in the market what can affect the
production of the company. These all information closely assist and evaluated by the marketing
department and send to the production department in order to produce or manufacture products
as per the need and demand of the customers, as according to the competitors which they are not
provide in the market. That help the company or organisation to increase its sales in the market
and also to make relation with the customers. And this interrelation between marketing and
production help the organisation to achieve its overall target (Teece, 2018).
Finance and Marketing
Finance and marketing is also interconnected and linked with each other in the
organisation and help the organisation to obtain its objective in time. As the finance department
of the any company has all the record and maintain balance sheet of all the expenditures and
expenses of the company. This help the company to manage its all the activities as according to

the available fund or capital. Finance function and department divide the capital and allocate it
with other department to smooth operation and to get resources for their operation (Hamilton and
Webster, 2018). As per the allocated capital marketing department build its strategies and plan of
marketing, selling, buying of the products, and for the advertising of the product, this help the
company to attract more customers and create new brand image in the market. In this way
company get its target and increase its profit share in the market.
Human resource management: HRM is a big element of any type of company who work
closely with finance and accounting department with the main aim of achieving organisational;
goals. For achieving this goal, HRM play various functions and role such as hiring, recruiting,
motivating and developing employees. This department is responsible for managing employees
in an effective manner and fulfil their all the needs to motivate them towards achieving goals. It
also provides training to their employees for the improvement for the quality of products and
services.
M 2
Finance and marketing makes are inter-related. Marketing helps in increasing the
profitability of firm. If marketing functions are not performed by firm then it can increase its
operational cost. In this way other functions of the organisation are interlinked and help[ each
others.
III )
4)_Positive and negative impacts of the macro environment upon business operation
To analyse the impact of the macro environmental factors upon the business and
operation and its affect on the decision making process on the UK retail industry, company uses
PESTLE analyse to determine what affect the most and its negative and positive impact on the
business operation (Plowas, Hairstans and Fellingham, 2018). These macro or external factors
are which that have no control of the organisation on them. This PESTLE analysis is analysed
below:
Political factor : This political factor refers to the intervention of the government in the business
activity through their policies and stability in the country.
Positive impact – Changing Political condition of the UK give the opportunities to the retail
supermarket to make change in their strategies that can attract more customers. Changing

taxation and minimise the interest rate and ex[port import rate, company get easy access of
production and expand business in new country.
Negative impact - The revenue and the profitability of the any retail company of the UK is
affected by the government policies of the UK. As the changing government policies with the
changing government affect the UK retail supermarket, they also have to change their policies
and strategies that impact its demand in the market and profit share become low (Zaldivar and
et.al., 2018).
Economic factor: This factor refer to the economic condition of the UK how it be profitable for
the business. Which include economic growth, interest rates and exchange rates of the UK.
Positive impact – Good economic condition of the UK help the retail supermarket as top
increase its productivity by providing good resource available in the country. This help the
supermarket to fulfil the need of the customers and make profit.
Negative impact – economic condition of the UK affect a lot top the retail super market like,
Sainsbury ASDA. As low economic condition create problem in its operation and company have
to increase its price of the products. That can decrease demand of the products in market. And
affect its revenue.
Social Factor: Social factor refers to the attitude, believes and culture of the UK and its people
and include the population growth, age, education level, health consciousness etc.
Positive Impact – Favourable social condition help the retail supermarket of the UK. Education
level, gender, age affects the business. Good education level help the industry to get best skilled
employees in the company and also help to have good customers through they skill.
Negative impact – If the retail industry of the UK will not provide the goods and services as
according to the culture, and need and demand then it will affect negatively on the profit and
sales of the retail supermarket.
Technological factor: This technological factor refers to the technological change in the market,
this will include new ways of production, distribution and communication.
Positive Impact – As the retail super market like Sainsbury, ASDA, Tesco which provide all
kind of products, then good and updated technological use in the production increase it
productivity and provide good quality product to the customers. This will increase the demand
and profit of the company (Eisenberg, 2018).

Negative impact – To adopt technology in the production and any other business operation may
be costly. As it need high amount to bring in the company and also need to train employees to
use it. This may be cost consuming for the retail industry and can not focus on other decision.
Legal factor: This include the laws and regulation that organisation have to be follow and apply
in their organisation. This consist of health and safety, labour laws, consumer rights and etc.
Positive Impact – If the retail supermarket follow all the legal norms and law like environmental
law, health and safety law, labour law, this help the industry to be trustable in the market among
the customers and increase the brand image and demand of the company.
Negative impact – If any retail supermarket do not apply any laws which related to the
environment, customers, and em[employees this will affect the supermarket as whole, employees
retention level will increase and do not work with any retail store and it may close the shutter of
supermarket in UK.
environmental factor: This consist of different environment condition and change in weather
that affect the business.
Positive Impact – Environmental condition helps to produce raw materials for the retail
industry, which they can use and produce good quality products and also is retail industry of UK
make CSR for the environment that help the company t be recognise in the market and society as
well (Plowas, Hairstans and Fellingham, 2018).
Negative impact – Changing environmental condition, weather can affect the production of the
retail supermarket. Some time it can also be spoil all the business in the UK. This affect the
sales, demand and overall business operation and decision process of the retail industry.
M 3 AND D2
Pestle help the organisation to know the impact of the macro environment on the business
operations and decision-making process of the company. This help any kind of the businesses
organisation weather it is small, private or public help all the entrepreneur to overcome the all
the impact of the macro external factor.
IV )
5 ) Internal and External analysis of the organisation
To get the strength and weaknesses of Tesco company, this will apply SWOT analysis.
That help Tesco to overcome its weakness and to know opportunities in market.

SWOT analysis
This is the tool which identify internal strengths, weakness, opportunities and threat of
the Tesco organisation and also used to evaluate the competitive position in the market. This
Tesco is the third largest retail company in UK and ninth in the world by its revenue. And to
determine all these organisation can work on it to increase its sales and profit in market (Abdel-
Basset, Mohamed and Smarandache, 2018).
Strengths
Key strength of the UK retail industry is that they provide different kinds of the products
to the customers. Their main aim is to satisfying the need of the customers and demand. Its
product range, unique selling point are there strength that make them different from other firms.
Weaknesses
The major weakness of the retail industry in UK that they do not focus on their customers
and take them as granted. They do not responding them quickly enough, that may drop their
customers. And it is difficult to regain customers again.
Opportunities
UK retail supermarket have opportunities to expand its business at global level not only
ion UK. They can also bring different products which they do not sell in the market. Also start
their online sites to increase business (Ervural and et.al.,2015).
Threats
In the UK retail industry all the competitors of supermarket are the threats for each other.
Their new strategies, technological change create problem. Lack of distributive channel also may
be threats of the retail industry.
Porter's five force analysis
Porter's five force model is used to determine how competitive advantage affect the
business and it decision making process of any organisation. This include five forces, these are
as follows:
Bargaining power of buyer – As the bargaining power of the buyer is relatively low but in the
fashion store like Mark and Spencer which provide clothing. People's choice, demand affect the
retail industry and they can switch to other brand (Meyer and Cohen, 2018)
.

Bargaining Power of the Suppliers – Bargaining power of the suppliers is low, as the UK retail
industry which deliver all kind of products have large number of the suppliers. Like Salisbury,
Tesco, Asda, they can move to any other suppliers in order to distribute their product in the UK
market.
Threat from the Competitors – Retail industry of the UK has been affected by the competition in
the market. Like if Sainsbury made change in its pricing to attract customers then another retail
supermarket like Tesco will also make improvement and give discounting facility to gain
customers.
Threats from the Substitutes – Threats from the substitute in the retail supermarket industry is
relatively low, as the supermarket like Tesco, Sainsbury, Asda provide all kind of products at one
place so customers do have option to move other products (Lurati and Zamparini, 2018).
Threat of New Entries – Threats of new entrants in the retail industry is low as to get entry in
retail supermarket, need large amount of capital. Which is not possible for any retailer.
M 4
SWOT and porter's five force that help to analyse the strength and weakness of the
business. Help the any kind of the business and influence its operation and decision-making
process. After knowing the forces in the market company can make new strategies that overcome
the force and increase the demand. With the help of the SWOT all the company can get
determine their weakness and work on it remove it that create problem in gaining profit in the
market.
6 ) Interrelation strengths and weakness with external macro factors
Fulfilling the demand of the customers as per choice of there need and choice is strength
of the retail industry which is connected with the social macro environmental factor. In this, if
the organisation like Sainsbury, Tesco fulfil the demand of the customers according to their
culture, choice, need, and demand this increase the relation with customers and help to gain more
customers in the market. This help to gain more profit as well (Meyer and Cohen, 2018)
.
Technological change in the market is threats which linked wit the technological external
factor of the UK retail industry. Apply new technological change by the competitors creates
problem that they provide products in market and deliver them in minimum time. Because of this

change other retail company have to be apply and bring technological change in the organisation
with large capital. That affect the industry's financial condition and affect its operation.
D 2
Micro and macro factor that affect the businesses operation and decision making process
as of company want to operate in the new country or affected by the political, or any macro
factor, can analyse and work on it to remove it and make new strategies for gaining profit. Also
micro factors strength and weaknesses entrepreneur can make new strategies on the basis of their
strength to take opportunities in the market.
CONCLUSION
From the above study it has been concluded that there are different types of organisation
operate in the market with different purpose, size and scope. And these organisation help in
increasing growth of the UK economy. In this organisation various functions are to be performed
and these function are interconnected with each other and help in smooth operation of the
company. Also help the organisation to make effective strategies to gain profit and achieve its
overall organisational goal. Through this report it has been also analysed the positive and
negative impact on the UK retail supermarket industry with the help of the PESTLE analysis. It
also been analysed strength and weakness of the UK retail industry with SWOT analysis and
Porters five force model. These tools help retail industry to identifying weakness and overcome
it. Also identified strength and weakness of the retail industry interrelate with the external macro
factors.

REFERENCES
Books and Journals
Abdel-Basset, M., Mohamed, M. and Smarandache, F., 2018. An extension of neutrosophic
AHP–SWOT analysis for strategic planning and decision-making. Symmetry. 10(4). p.116.
Beatty, J.F., Samuelson, S.S. and Abril, P.S., 2018. Business law and the legal environment.
Cengage Learning.
Eisenberg, P., 2018. Kier Group Plc: business and financial performance analysis and
evaluation. The International Journal of Business Management and Technology. 2(6).
pp.20-42.
Ervural and et.al.,2015 TOPSIS-based SWOT analysis for Turkey’s energy planning. Renewable
and Sustainable Energy Reviews. 82. pp.1538-1550.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Lurati, F. and Zamparini, A., 2018. Communication SWOT Analysis. The International
Encyclopedia of Strategic Communication, pp.1-8.
Meyer, C. and Cohen, D.G., 2018, July. Porter’s Five Forces in the Post-industrial Age.
In Academy of Management Proceedings (Vol. 2018, No. 1, p. 16589). Briarcliff Manor,
NY 10510: Academy of Management.
Plowas, W., Hairstans, R. and Fellingham, J., 2018. Mass Customisable Roofing Solutions for
the New Build and Retrofit Markets in the UK. Modular and Offsite Construction (MOC)
Summit Proceedings. 1(1).
Teece, D.J., 2018. Business models and dynamic capabilities. Long Range Planning. 51(1).
pp.40-49.
Zaldivar and et.al., 2018, May. Unveiling the Potential of ITS: Market Research Analysis. In The
4th Conference on Sustainable Urban Mobility (pp. 233-240). Springer, Cham.
Online
Business Analysis of UK Supermarket Industry.2014.[Online].Available
through<https://www.grin.com/document/278978>
Marketing and its relationship with other business activities.2019.[Online].Available
through<http://www.sanandres.esc.edu.ar/secondary/Marketing/page_14.htm>

SWOT Analysis for Retail.2019.[Online].Available
through<https://smallbusiness.chron.com/swot-analysis-retail-3344.html>