Business and Business Environment - Aldi Company

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Different types of business concerns and their legal structure..........................................1
P2 Size and scope of different types of organisations............................................................3
TASK 2............................................................................................................................................5
P3. Relationship between different organisational functions and how they help in achieving
organisational objectives........................................................................................................5
TASK 3............................................................................................................................................6
P4 Positive and negative impacts of macro-environmental factors........................................6
TASK 4............................................................................................................................................8
P5 Internal and external analysis of specific organisation to identify strength and weaknesses 8
P6 Interrelation of strengths and weakness of macro environment elements on a company. 9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is a quite wide term which comprises of a sum total of all internal
as well external factors that are present within a business concern. These factors are expected to
lay a quite significant impact on overall performance of a business. It comprises various key
factors such as customers, political factors, technology, suppliers etc. All these factors have a
quite significant impact on maintaining successful business relationship with customers
(Business environment. 2018). This report has been framed on ALDI which is a private sector
business concern and deals in retail sector. It is a supermarket chain which is headquartered in
Germany. This report deals with various types of business concerns such as private public and
voluntary along with their legal structure. Interrelationship between various departments of a
business concern along with their critical analysis have been specified. This report also focusses
on external market analysis with tools such as SWOT and PESTLE.
P1 Different types of business concerns and their legal structure.
Business environment is a quite broad aspect which comprises of all internal as well as
external factors that affect business and its overall functioning as well. Each and every business
concern nowadays has different aims and objectives which they want to fulfill. Various types of
business concerns along with their legal structure have further been mentioned as under:
Private Organisation: It is the type of organisation which is fully owned and managed by
an individual, agency, corporation or by partnership. These kind of organisations are generally
run by the people for making money. Company chosen in this context is ALDI which is a
supermarket chain store.
Purpose of private organisation: Main aim of ALDI is to enhance its overall
productivity by providing excellent quality goods and services.
Legal structure: Legal structure of private sector companies can further be divided into
two categories which has further been explained as under:
Sole Proprietorship: It is a type of business which is assumed to be owned managed and
controlled by a single person (Calabrese and et. al., 2018). In this type of business only one
person is entitled to entire decision making.
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Partnership: It is a joint form of business where two or more individuals pool their funds
and resources in order to run a business. Here profits and losses of a business are shared equally
by individuals.
Public Organisation: Any company or organisation which is run by the government of
the nation comes under Public Organisation. These type of organisations mainly formed by the
government under a special act of parliament (Cumming and Zahra, 2016). All the powers,
objectives, rules and regulations of the organisation is decided by the government or by the act of
legislature. An example of public sector company is Crown prosecution services which provides
judicial advice to intelligence agencies.
Purpose of public sector company: Crown prosecution services or CPS aims towards
providing judicial and law based advice to investigation agencies and general public so that they
can easily resolve their legal issues.
Legal structure of public organisations: In context of legal structure public sector
companies can further be divided into two categories which has been discussed as under:
State government: Companies that are run managed and controlled by state government
fall in this category. Main aim of such business concerns is to monitor requirements of common
people.
Local government: Companies that are run managed and controlled by local bodies are
referred to as local government companies. Such businesses aim towards fulfilling needs and
requirements of people.
Voluntary Organisation: The word is derived from the Latin word “Voluntas” which
means freedom and will. This type of organisation is not controlled or directed by the
government. It is fully owned by the members and not by any external forces. Providing Social
services to the needy people, poor, old aged is what voluntary organisation is worked for
(Charter, 2017). An example of voluntary business concern is Cancer research UK.
Purpose of voluntary organisation: Main aim of voluntary organisation Cancer research
is to control number of deaths that may happen due to deadly diseases such as cancer. This is
possible only by researching about new technology and remedies.
Legal structure of voluntary organisation: Legal structure of every company is different
from another. Hence in context of legal structure of voluntary companies it can further be
divided into two parts.
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(a) Association: This is most popularly existing structure in voluntary sector. It is
usually formed by small groups who aim towards carrying out all key and important tasks. These
type of associations are way more cheaper than other business concerns.
(b) Trusts: These types of associations get formed due to mutual trust and understanding.
Companies in this head are generally governed by a trust deed and do not need any sort of
membership structure.
P2 Size and scope of different types of organisations.
Business environment refers to a sum total of internal as well as external factors that
affect overall functionality of business (Eling and Schaper, 2017). It further comprises of a
number of organisations such as private, public and voluntary. All these companies have
difference in their size and scope which has further been explained as under:
(a) Private organisation: An organisation which is basically existing with a motive of
money or fund generation is known as private organisation. Companies in this sector are
managed and controlled by single or group of people. In present scenario chosen example for
private organisations is ALDI which is a supermarket chain store.
Background: ALDI is a retail sector company which is basically a supermarket with its
headquarters in Germany. ALDI has been set up with a aim to gain competitive image in market
by supplying fresh and good quality products and services to their customers.
Products and services: ALDI is a supermarket and hence they provides all sorts of goods and
services such as dairy products, groceries, consumable goods etc. Managers of ALDI provide
their goods at nominal prices which lends them a quite competitive image.
Size: In terms of size ALDI has been constantly developing and increasing. ALDI in today's
scenario owns around 10000 stores in around 20 nations. Turnover generated by ALDI is
expected to be around € 50 billion.
Vision: Vision of ALDI is to provide value based and excellent quality goods and services to
their customers.
Mission: Mission of ALDI is to provide value even for the nominalest amount which further
gets reflected in its mission statement “ Spend a little and live a lot” (Hamilton and Webster,
2018).
Objectives: ALDI has been set up with the objective of adopting ethical business practices and
enhancing their customer base.
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Structure: The chosen organisation ALDI is operating its business activities with formal
organisational structure.
(b) Public organisation: Any type of a business or company that is managed and owned
by government officials or authorities are known as public sector business concerns. Such
businesses run with a major motive of fulfilling needs and requirements of common people and
enhance their overall living standards as well. An example of public company which has been
chosen for this report is CPS.
Background: CPS or Crown Prosecution services is basically a law based firm by nature. It was
incorporated in the year 1986 and has its headquarters in France and London. CPS exists as a
non ministerial government agency and has around 6000 employees.
Products and services:Main work of CPS is to guide police officials and investigating agencies
in their legal matters.
Size: In relation to size of Crown Prosecution services it has been examined that it is growing
rapidly since last 33 years and currently employs around 6000 people (Hillary, 2017).
Vision: Vision of CPS is to provide effective advice to investing agencies and police
departments by adopting research tools.
Mission: In relation to mission of CPS it is to a independent public company which is not under
anybody's controlling.
Objectives: Main aim of CPS is to ensure welfare and growth of society and people living in it.
Structure: Crown prosecution services works with a flat organisational structure.
Voluntary organisation: Business concerns that set up as non profit business entities and
aim towards growth and welfare of society as whole are known as voluntary business concerns.
In present report chosen business concern is Cancer Research, UK .
Mission: Mission of Cancer Research is to provide knowledge about remedies of cancer in
institutes and make people aware about how it can be controlled.
Vision: Vision of Cancer Research institute is to raise awareness about deadly diseases such as
cancer so as to develop living standard and quality of life of people. Their vision is to carry out
world class research activities in institutes, universities and hospitals with a motive to raise
awareness about cancer (Ketata, Sofka and Grimpe, 2015).
Products and services: In context of products and services Cancer Research is providing
statutory tools and techniques so as to protect rights of individuals.
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Size and Scope: Cancer research came into existence in the year 2009 and has been working
since then in order to spread remedial awareness regarding cancer.
Objectives: Main objective or aim of Cancer research is to be effective while conducting
research in context of remedies and measures of preventing cancer.
TASK 2
P3. Relationship between different organisational functions and how they help in achieving
organisational objectives.
There are a number of organisational functions in a business which need to be undertaken
in an effective manner so as to maintain efficiency of a company (Laudon and Traver, 2016). By
adopting effective organisational functions business concerns ensure achievement of their goals
and objectives within a specified time frame. In relation to ALDI, it has been examined that
managers should maintain effectiveness in their performance so as to gain competitive growth.
There are a number of organisational functions that have been stated as under:
Marketing: Marketing function plays a quite significant role in every business and is
existent at almost every level in a business. Marketing department in a business ensures growth
and development of their business thereby promoting goods and services. This further helps in
attracting more and more customers and enhancing customer base of a company. In context of
ALDI marketing department is interlinked with finance department as for bringing any new
promotional strategy company will require a certain amount of funds which will be provided by
finance department.
Human resource: Human resource as the name suggests is a department in a company
which deals in growth and welfare of human resource or workforce present in a company. This
department is known as lifeblood of a company as without manpower no organisation can work
in an effective manner. Mainly this department ensures that right people are put forth at right
positions in a business (Ledgerwood, 2017). HR department of ALDI is interconnected with
finance department as for training or staffing employees managers will require ample of funds
which will be provided by finance department.
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(Source: Organisational Chart, 2019)
Finance: Finance department of a business ensures effective and controlled flow of funds
in an organisation so that goals and objectives of a company can be achieved. Finance in a
company ensures that it is functioning in a quite stable and smooth manner. In context of ALDI
its finance department is interlinked with every department such as marketing, HR, production
etc as all these departments will need a nominal amount of money to complete their tasks. This
department also ensures that liquidity position of a company is maintained (Morrell, 2017).
Such a type of interrelationship or relationship between various functions will help
ALDI in achieving its aims and objectives within a specified time frame.
TASK 3
P4 Positive and negative impacts of macro-environmental factors.
All the external factors which affects the operating activities of the organisation comes
under macro environment. For monitoring and analysing the external or macro environment
company uses PESTEL analysis. ALDI is a multinational supermarket retail store which is
situated in Germany and working across the world. ALDI's PESTLE analysis has been explained
below:
Political Factors:This factor includes laws and legislations, government and tax policies
which affects the working of the organisation (Oriesek and Schwarz, 2016). All these rules and
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regulations are applied to all the concerns. Many problems are faced by ALDI after
implementing various new laws in the nation.
Positive Impact: By applying all these laws and regulations company will be able to
perform its operating activities in a lawful way which benefits the organisation.
Negative Impact: Sometimes change in policies can negatively affect the business
because they had to implement new plan of action in the organisation for smooth running of the
activities (Saleem, 2015).
Economic Factors: These factors includes issues related to money and finance. Such as
inflation rate, tax rate, foreign exchange rate and so on, which directly effects the organisation
and its operations. If there is recession in Germany, it will affect the profitability of ALDI.
Positive Impact: Economic stability in the country plays a positive role in the
development and growth of the organisation.
Negative impact: If there is any instability in the nation, it affects the purchasing power
of the people which also affects the profitability of the company.
Social factors: Social factors is a name given to factors or behavioural aspects that have
an influence on the way of living of individuals. These are the factors which is related to the
society. Social factors includes culture, norms, educational level of people living in a society. For
the satisfaction of customers and for promoting hygiene and safety among society ALDI
produces good quality of products. Effect of these factors can vary depending upon their
situations.
Positive Impact: This factors helps in improving brand image and goodwill of the
organisation in society.
Negative impact: If the organisation fails in achieving the social factors, then they will
decrease their profitability, market share and goodwill.
Technological factors: This factors refers to innovation in technology which affects the
business operations of the organisation. It involves the use of new, upgraded and innovative
technology for producing goods and providing services to the customers in ALDI.
Positive Impact: By adopting latest technology in the organisation, goals and objectives
can be achieved in an effective and efficient manner (Schaltegger and Wagner, 2017).
Negative impact: It is quite difficult to use new technology in the enterprise, because not
every employee is well trained to use it.
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Environmental factors: This factor deals in the protection of the environment. It
includes all the environmental factors such as climate, whether which affects the profitability and
goodwill of the company. By producing healthy and hygiene products ALDI helps in promoting
this factor.
Positive Impact: Environment of the country does not affect if they use eco-friendly
methods for the production of goods (Schaltegger, Lüdeke-Freund and Hansen, 2016).
Negative impact: Eco-friendly products are quite expensive and ALDI focuses on
reducing the cost.
Legal factors: There are certain laws in every country which affects the operations of the
business. It includes employees laws, consumers laws, labour laws and many more. ALDI
analyse all these laws and apply them in the organisation to avoid any legal issues.
Positive Impact: Environment of the company affects the operations of the organisation.
Negative impact: There are various laws which negatively affects the profitability and
operating activities of the organisation.
TASK 4
P5 Internal and external analysis of specific organisation to identify strength and weaknesses
ALDI is a multinational supermarket chain which is currently working in all over the
world. With the help of SWOT analyses we can examine the strengths and weakness of ALDI:
STRENGTH WEAKNESSES
 ALDI promotes their business on a
social media platform which helps them
in attracting large number of customers
and increase the profitability and
demand of products produce by them
(Shchepaki and Krivosheyeva, 2015).
 For performing better in the
competitive market and maintain the
growth rate, company continuously
updating their technology.
 Major disadvantage or weakness of
ALDI is they have low market share as
compared to other brands.
 Continuous change in technology
demands large amount of investment,
which is not available all the time.
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THREATS OPPORTUNITIES
 One of the major opportunities for
ALDI is that they can open their retail
store anywhere in the world for the
expansion of their business.
 Social media can be advantage for the
company as the world is moving fast
and prefer applications and sites for
shopping.
 For maintaining position in the
competitive market rival company's
bring down their price as compared to
their competitors.
 New entrants can be a threat for the
companies which already exists in the
market.
 Changes in taxation policies or
multiplication of laws.
Strengths and weaknesses of LIDL, which is one of the biggest competitors of ASDA :-
Strengths Weaknesses
Have wide range of private as well as other
label products.
A good control over online selling of products.
The price range of products offered by LIDL is
very economy.
High rate of competition faced by them in
market place.
Limited presence of the retail chain outside
Europe.
P6 Interrelation of strengths and weakness of macro environment elements on a company
In this context, there are various macro environmental factors that affects overall
performance of a business entity from both positive and negative perspective (Šimić Banović,
2015). The strength and weakness of macro-environmental factors discussed below as:
INTERRELATION OF STRENGTHS AND WEAKNESSES OF MACRO
ENVIRONMENT ELEMENTS ON A COMPANY.
Factors Strengths Weaknesses
Political factors The government encourages to
the job seekers through the
The removal of Brexit creates
the negative image of ALDI
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seminars, camping and so no
for the job opportunities
which helps to strengthen the
economic position. This will
creates the positive impact of
the ALDI.
because its affect the working
environment and the
productivity.
Economical factors Since, United Kingdom has a
strong economy and because
of this citizens focuses on
quality ( Brocke, Zelt and
Schmiedel, 2016). ALDI offers
quality based products to users
which has helped them in
becoming a market leader.
The purchasing power of
customers goes declined at the
time of recession period which
directly affects its profitability
and productivity.
Social factors For the better health and
lifestyle of the human being
they provides the good quality
and fresh products.
For the fresh and good quality
of products price creates the
major role in it.
Technological factors For the success of any
company technology plays an
very important role (Hamilton
and Webster, 2018). So,
through the help of technology
its integrate the digital channel
for marketing.
Improper knowledge or less
skilled person can not use the
technology properly. So, its
create the negative impact on
it.
RECOMMENDATION
From the above discussion. It is recommended to ALDI, that they have to make strategies
for their business and future, according to the result they get after analysing the external and
internal environment of their business. Also they have to keep their eyes on the change in trend
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and also have to analyse their competitors and strategies made by them, this will help them in
gaining some competitive advancements.
CONCLUSION
From the above mentioned report it has been concluded that business environment is an
essential tool in which a business operates. It is an essential factor which even many have a quite
relative impact or affect on business. This report comprises of various types of business concerns
along with their legal structure. Main tools which affect business functionality of companies such
as PESTLE analysis and SWOT have been taken into consideration. This report also focusses on
interrelationship between various organisational functions in a business along with strengths and
weaknesses of external factors on business. This report also studies positive and negative
outcomes of various macro factors and their effect on profits and growth of business.
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REFERENCES
Books and Journals
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Cumming, D. J. and Zahra, S. A., 2016. International business and entrepreneurship implications
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Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects
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Operational Research. 258(3). pp.1082-1094.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
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Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Ketata, I., Sofka, W. and Grimpe, C., 2015. The role of internal capabilities and firms'
environment for sustainable innovation: evidence for G ermany. R&d
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Laudon, K. C. and Traver, C. G., 2016. E-commerce: business, technology, society.
Ledgerwood, G., 2017. Greening the boardroom: Corporate governance and business
sustainability. Routledge.
Morrell, J., 2017. How to Forecast: A Guide for Business: A Guide for Business. Routledge.
Oriesek, D. F. and Schwarz, J. O., 2016. Business wargaming: securing corporate value.
Routledge.
Saleem, S., 2015. BUSINESS ENVIRONMENT, 3/e. Pearson Education India.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Schaltegger, S., Lüdeke-Freund, F. and Hansen, E. G., 2016. Business models for sustainability:
A co-evolutionary analysis of sustainable entrepreneurship, innovation, and
transformation. Organization & Environment. 29(3). pp.264-289.
Shchepakin, M. B. and Krivosheyeva, E. V., 2015. Management of increase of business
enterprise's competitiveness in the changing market environment. Международный
научно-исследовательский журнал. (9-1). pp.81-84.
Šimić Banović, R., 2015. Cutting the red ribbon but not the red tape: the failure of business
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vom Brocke, J., Zelt, S. and Schmiedel, T., 2016. On the role of context in business process
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Online
Business environment. 2018. [Online]. Available through:
<http://www.investorwords.com/19252/business_environment.html>.
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