BUSINESS AND BUSINESS ENVIRONMENT INTRODUCTION

Purpose- Purpose of ALDI is described as follows- Sole Proprietorship- It is a type of legal structure in which company is owned and ran by a single individual and is liable for all the profits and losses. Legal Structure- Legal Structure is defined as follows- Sole Proprietorship- It is a type of legal structure in which company is owned and ran by a single individual and is liable for all the profits and losses.

BUSINESS and
BUSINESS
ENVIRONMENT
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INTRODUCTION
Business Environment is the sum total of individuals, institutions and the external forces
which are outside the control of the company and overall effects the performance and
sustainability of business. External forces constitute of suppliers, competitors, customers,
investors and many other which affects the decision making of business. As every organisation is
classified into private, public and Voluntary sector, have their own legal structure size as well as
scope (Adeoye and Elegunde, 2012). This report is based on ALDI which is a private sector,
family owned super market chains with around 10,000 stores in 20 countries. This report focuses
on scopes, sizes and structure of the different organisations as well as determines
interrelationship among various organisational functions. PESTLE analysis will be conducted to
identify the impact of macro environmental factors on decision making as well as conducts
SWOT analysis to identify the key strengths and weakness.
TASK 1
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures for the chosen organisation.
Their are different types of organisation which performs their business activities in a
proper manner towards the attainment of the organisational goals in a proper manner. Their are
different types of organisation such as private, public and voluntary sector, in context to this
ALDI taken as private organisation, NHS as public and OXFAM as Voluntary sector. Their legal
structure, size and scope are discussed as follows-
Private Organisation- These are the companies which are owned and operated by the
individuals and companies, either in the form of sole proprietorship and partnership and doesn't
have any interference and control of government. Chosen Private organisation is ALDI which is
Germany based super market chain , whose main objective is to earn profit by providing
products according to the demands of the customer. Therefore respective company has a definite
purpose and legal structure which contributes towards effective functioning business activities.
Purpose- Main purpose of ALDI is to provide customers with wide range of quality
products at the best price. Their focus id towards adapting effective operations and achieving
cost leadership so that the products can be provided at an appropriate price and profits can be
maximised.
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Legal Structure- Legal Structure of ALDI is described as follows-
 Sole Proprietorship- It is a type of legal structure in which company is owned and ran
by a single individual and is liable for all the profits and losses.
 Partnership- In this type of legal structure, organisation is owned and run by two or
more individuals which works collaboratively and have equal share in the profits and
losses. Aldi follows a partnership legal structure, in which two German family owned
this supermarket chain (Andersson, Forsgren and Holm, 2015).
Public Company- These are the organisations which are owned and controlled by the
governmental authorities and their main purpose is to provide to provide services to the
individuals within the country. In relation to Public company NHS has been taken which is a
National Health Service System came into existence in 1948 and provides a range of health care
services to the citizens of the country Excluding dental and health care facilities , headquartered
in London.
Purpose- Purpose of NHS is to provide universal free services to the citizens of the
country and to safeguard the citizens from any harmful disease.
Legal Structure- Legal Structure of ALDI is described as follows-
 State Government- In this legal structure, State government has the full control to take
decisions and provides adequate sources and funds for effective functioning of business
activities.
 Central Government- In this legal structure central government is responsible for taking
decisions regarding the operations of the business activities in a proper manner.
 Local Government- Here local government is responsible for maintaining and handling
all the local authorities of work , regarding effective rules and regulations as well works
with assistance with central and state government.
Voluntary Organisation
Under this sector, Union is formed by group of individuals whose major purpose is to
work for the welfare of the individuals within the society. Oxfam is taken as a voluntary sector
which came in existence in 1942 which is formed by a group of individuals whose major aim is
to reduce poverty and benefits the individuals within the society .
Purpose- Purpose of Oxfam is to provide socio economic benefits to the individuals
within the society as well as eradicates poverty from the nation.
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Legal Structure- Legal Structure of Oxfam is described as follows-
 Unincorporated Association- This association is formed by a group of individuals and
a contract is signed between the parties so as to enhance welfare to the individuals within
the society.
 Trust- It consist of three parties such as donors, trustees and beneficiaries who is
responsible for performing the beneficial activities in a proper way without the aim of
earning profit.
P2 Size and scope of a range of different types of organisations
Organisations which are classified as public, private and voluntary have their own size
and scope which leads to the effective functioning of business activities towards the attainment
of goals. Size and scope of different organisations are described as follows-
ALDI
Background detail- Aldi is a family owned supermarket chain which specialises in providing
various consumer products under one roof with around 10,000 stores in 20 countries.
Vision and Mission- Vision of ALDI includes providing opportunities to the individual to buy
their daily needs at the highest quality with lowest possible price. Mission includes providing
goods to all the individuals at the lowest price and effectively maintains sustainability of
business (Belás and et. al., 2015).
Business Objective- Business Objective of ALDI includes enhancement of its market share and
gains customer loyalty towards its products which leads to maximisation of profit and and able to
gain competitive advantages.
Size and Scope- As Aldi is a Germany base supermarket chain has around 10,000 stores in 20
countries which assist in gaining competitive advantage and scope of ALDI includes AS there is
greater demand of grocery and household items it allows the company to expand their stores in
various countries and maintains their sustainability and profitability.
Product and service: Its products include from food and beverage to household essentials and
contains sanitary products which are provided at an affordable price to the customers.
Organisational structure: Aldi follows a decentralised organisational structure which involves
the regional managers to involve in decision making process and leads to effective
implementation of strategies.
Stakeholders- Its stakeholders includes employees, customer, suppliers, competitors, investors.
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National Health Service
Background detail- It is a National Health service public organisation headquartered in UK
and provides universally free services to the individuals within country.
Vision and mission- Its vision includes providing free health services to the individuals and
eradicates the harmful disease and provide healthy life style to the individuals and mission
includes wellness of the all the individuals of the country by treating them against harmful
diseases (Chang, 2016).
Business Objective Their business objective is to promote health and safety of the individuals
and provides free health care services to the individuals.
Size and Scope- It has wide size of approximately 2,165,043 employees who functions business
activities all across the globe and their scope is vast as they provide free services to all the
citizens throughout the globe.
Product and Service- Its service include free health check up of the employees and providing
treatment against them, excluding dental and optical care facilities.
Organisational Structure- It also has a flat organisational structure which minimises the level
of middle management and there is open discussion between employees.
Stakeholders- Its stakeholders are employees, patients, governments etc.
OXFAM
Background detail- Oxfam is a voluntary sector organisation , commenced in the year 1942 and
works to provide welfare and socio- economic benefits to its stakeholders.
Vision and mission- Its vision is to eradicate poverty from the society and mission includes
providing basic necessities to the individuals so as to make them live in a proper manner.
Business Objective- Their objective includes providing socio economic benefits and eradicates
poverty within society.
Size and Scope- It operates in more than 19 countries and with 19 international organisation and
with promoting equality, justice and removing poverty there scope has been increased as they are
benefiting the customers all across the globe.
Product and Service. They offer services related to hospitals, educational service.
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Organisational Structure- There is flat organisational structure, which enables the employees
to work in a effective manner and takes decisions in a timely manner.
Stakeholders – Its stakeholders includes government, employees, trustees and donors.
TASK 2
P3 Relationship between different organisational functions and how they link to organisational
objectives and structure.
Their are different departments within the organisation which performs their function in
interrelation with other departments, towards attaining goals and objectives in a proper manner.
The relation of ALDI departmental function are described as follows-
 Marketing with Finance Department- Marketing Department is responsible for
advertising the respective company's products and services and therefore promotes the
product in a proper manner, moreover for this purpose it requires huge finance to create
awareness about its product in the market. Apart from this marketing department also
anticipate the demand and the future sales of the products and provides information to
the Finance Department at ALDI so as to manage the funds for effective production of
goods and to meet the consumers demand (DEGeorge, 2011). This way productivity and
Profitability can be increased leading towards attainment of organisational objectives.
 Human resource with Sales Department- These two departments works in
interrelation with each other such as sales department is responsible for providing and
distributing the products of ALDI in a proper manner, thereby if there is requirement of
skilled manpower at various stores. This information should be provided to HR
department at ALDI to recruit additional sales workforce that are knowledgeable and
skilled. This way both the departments can work in a collaborative manner leading to the
attainment of the organisational objectives.
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Decentralised Structure at ALDI
This way various departments are interrelated at ALDI and assist in attaining
organisational goals in a proper manner, moreover they have a proper linkage with the
organisational structure as Aldi follows a decentralised organisational structure in decision
making responsibilities re delegated by the top management to the middle level managers and
lower level managers. This involves the involvement of the employees as all the departments
work in interrelation with all other departments within a definite structure and takes the decision
in coordination with the managers of different departments.
TASK 3
P4: Positive and negative impacts of macro environment
Macro environment consist of the external forces such as customers, competitors,
suppliers which has a major effect on the business operations of the company. It is necessary for
the company to analyse such sources ad forms effective strategies for the same. With the help of
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Illustration 1: Organisational Structure, 2019
(Source): Organisational Structure, 2019

PESTLE analysis, positive and negative impacts of the macro environment on ALDI can be
determined as follows-
Political Factors- It is related to government rules and regulations, trade policies and various tax
rates which affects the performance of the company in both the positive and the negative way.
 Positive Impact- With high level of political vulnerabilities across the globe, it threatens
sustainability of Aldi but as majority of ALDI stores are situated in Europe, U.S.A china
and Australia, but there is a favourable political conditions laws and regulations are in
favour of ALDI super market and this enhances growth of business.
 Negative Impact- Moreover when Britishers voted to leave European Union, uncertainty
arises as the political relationship with UK and Germany is not good and stable, this
creates difficulties in ALDI's UK operations (Doppelt, 2017).
Social Factors- It is concerned with the changes in demands of the customer due to
demographic factors, cultural and ethical values which has a effect on the functioning of the
respective business.
 Positive Impact- As the supermarket consist of various items as well as increased the
role of female workers which can satisfy the needs of different customers and enhances
the growth and success of business.
 Negative Impact- As customers are more aware of health conscious food products, their
attitude towards the products which is causing problem for respective company leading to
declines ales.
Economic Factors- Economic factors is concerned with economic policy, inflation and the
income of the customer which a impact on the business operations of the company. This forces
has a great influence on the purchasing power of the customers and impacts the performance of
the respective company.
 Positive Impact- With the effect of Brexit, prices of product in UK has risen, value of
pound has been dropped . This has turned consumers to purchase products from ALDI
super chain market and enhanced the growth of the business.
 Negative Impact- With the rise in inflation respective company has to reduce more its
prices of its products which will lead the company to reduce its profit margins.
Technological factors- It is concerned with the adoption of the latest technology to supply
products at easier and the fastest way to providing enriching customer experience.
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 Positive Impact- Respective company has adopted to self checkouts and electronic
advertising displays which has made positive impact by making ease for the customers to
purchase the product and leads to the success of the business.
 Negative Impact- Moreover with the adoption of the advanced technologies it creates
heavy cost for the company as well as requires skilled manpower which leads to
shrinkage of profits for the company as way of incurring additional cost.
Legal Factors- It is concerned with the legal laws and legislations that is imposed by the
government affects the performance and decision making of the respective company
(ErasmusStrydom and Rudansky-Kloppers, 2016).
 Positive Impact- As with the increase in legislations EU determined the need to display
nutrition facts on eatable products, this has a positive impact on the performance of Aldi
as customers will purchase the legally authorised products at lowest price from ALDI.
 Negative Impact- Apart from these, legislations also require respective company to get
various license in order to sale various products. This make it a complex process for the
company and affects the performance of the company.
Environmental Factors- These factors are in concerned to ecological and environmental aspects
which has a significant effect on the performance of the company.
 Positive Impact- With the increase in environmental issue, company has adopted to CSR
policy and also avoids overconsumption and wastage of resources which enhances the
brand image of the company.
 Negative Impact- Various obligations from the government related to food retailer has
made the functioning of business difficulties at ALDI in a complex manner, as ALDI has
stores in various countries following environment by the government is now a
complicated activity for the business.
TASK 4
P5. SWOT analysis for determining the strengths and weaknesses
SWOT analysis is an effective tool which helps Aldi to determine its strengths and
weakness and aids in taking effective decisions towards the growth and development of business,
moreover it also helps to gain an insight regarding the level of competition in the market as well
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as identify the opportunities associated with the Aldi and take the competitive advantage out of
it. It is described as follows-
Strengths
 It has a low cost pricing strategy which
attracts larger customer towards its
product.
 Aldi has a good customer support as
they get wide variety of choices under
single roof (Hamilton and Webster,
2018).
 It has strong presence in Germany with
around 2500 stores.
 It keeps its operating costs low which
allows the company with improved
profit margins.
Weakness
 It has not strong global presence as
compared to other companies.
 Its profit margins rely on the sales of
the product which led the company to
resort to unethical business practices.
Opportunities
 Respective company should invest
more in advertising so as to increase its
sales.
 Aldi should repositioned its business as
an affordable brand rather than cheap
brand will enhance the success of the
business.
Threats
 Aldi is facing tough competition from
TESCO, Walmart which becomes
difficult for the company to sustain
effectively.
 New environmental and legal
regulations affects the functioning of
business.
Impact of SWOT on Decision Making
With the help of SWOT analysis it assist the management at ALDI to identify its
strengths and can be leveraged effectively towards taking effective decisions, apart from this
identification of the weakness helps the management to take effective decisions regarding
framing proper strategies. This also provides an insight to the management to make effective use
of opportunities and take effective actions against the threat identified and leads to enhance
profitability and productivity.
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P6 Strengths and weaknesses interrelate with external macro factors
There is interrelationship with the external factors and strengths and weakness of Aldi,
which is described as follows-
 Political Factors- This factor consist of the governmental policies, rules and regulations
and various taxes rate imposed by the government which has impact on the operations of
the ALDI. Strength associated with this factor is that respective company operates
majorly in UK, Germany where political conditions are favourable and effectively
maintains success of the business. Weakness associated with this factor as Aldi operates
worldwide it has to comply with governmental rules and regulations of various countries.
This make it a complex process for the company.
 Economic Factors- It is concerned with the interest rate, inflation rate of the country
which affects the performance of the business. Strength associated is as the with rise in
inflation it allows the consumer to purchase from Aldi stores where products are
available at lowest price and the weakness is that providing the products at reduced price
will affects the profit m,margins of the company except in UK.
 Social Factors- It is connected to changing demands of the customer because of
demographic and socio cultural factor of employees. Strength associated is as Aldi
provides various products which meets the requirements of customer and enhances sales
and growth of business. Weakness is that with the awareness of health conscious
products, it has reduced the sale of respective company products (Hillary, 2017).
 Technological Factors- Strength associated is that with the respective company adoption
of electronic displays in stores and self checkout system, it has create ease for the
customers and became strength for the company to attract larger customers. Apart from
this it requires heavy finance to adopt technology and incurs heavy cost on the company,
This is the weakness due to technological factors.
 Legal Factors- With the government increase laws and legislations company started
providing nutritional facts on the food products assist ALDI to gain customer trust and
loyalty towards its products, but restrictions are on advertising as become compulsory
for the food retailers to advertisement fatty products and make the customer aware. This
leads to reduction sale of company products.
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CONCLUSION
From the above report it has been concluded that business environment consist of internal
and external factors which has a great effect on the functioning of the business. Management
within the organisation should analyse the forces and should develop effective strategies against
them for the growth and development of business. Their are various kinds of organisations which
have their own definite structure, size and scope and helps in the attainment of objectives in a
proper manner. Therefore it is necessary for the management to conduct PESTLE and SWOT
analysis of the company to identify their impact on operations of the company.
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Online:
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