Business and the Business Environment

This report discusses the business environment and its impact on business organizations. It covers topics such as PESTLE analysis, SWOT analysis, and the interrelation of strengths and weaknesses with macro factors. The report also includes a case study on Asda supermarket. Get study material and solved assignments on Desklib.

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 3...............................................................................................................................................1
P4 PESTLE analysis and its impacts on business organisational................................................1
M3 Appropriately application of PESLTLE model.....................................................................3
Task 4...............................................................................................................................................3
P5 Internal and external analysis of specific organisation ..........................................................3
M4 Application of SWOT ..........................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCE...................................................................................................................................7

INTRODUCTION
Environment is the collection of factors that covers internal and external situation f
business and influences the business activities. Whenever any business is going to start and
running by business concern, it need to focus different element which helps to maintain the
production in order to get outcomes (Aithal, P 2016). To understand influencing factor ans its
impacts Asda Stores Ltd is selected that was founded in 1965. This is a super market that provide
products and services at retail prices and get profits. This report stated about business
environment that covers macro and micro environment for getting profits. PESTLE analysis and
SWOT analysis is contained in this repost which helps to attain the goals.
Task 3
P4 PESTLE analysis and its impacts on business organisational
PESTLE analysis is a framework which is very important for business organisation and
make strategic planning. In business organisation, this is used by strategic planners to analyse the
factors which can affect a business whether positively and negatively (Apăvăloaie, 2014). This
framework is used to know the impact of external factors that is defied as:
Political factor – This factor comprises with Bureaucracy, corruption level, Tariffs, Data
protection law, tax rates, interest rate, inflation rate etc. that can impacts on business operation of
Asda which is defined as:
Positive impacts: The political stability and interest are of UK are fixed that do not
fluctuate which impacts positively on Asda's operation. Such as its production level and selling
activities are increasing continuously (Cairncross, 2014).
Negative impacts: If changes in government regulations and policies of UK are
fluctuating or increased then it affects business organisation badly as administration has to pay
more attention on new policies which reduced production as well as profitability.
Economical factor: This factor comprises with unemployment and interest rate, labour
cost, inflation rate, growth rate, population growth;, dilatation, exchange rate etc. that may affect
the business of Asda supermarket in diverse manner:
Positive impacts: In context to Asda, operations is affected positively which helps to
make higher profits (Botha, Kourie and Snyman, 2014). The rate of population is increasing
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continuously in UK and other country which helps to increase the sale of Asda so, this factor
affecting positively.
Negative impacts: If exchange rate is increasing in comparison to UK's currency then
business can be affected negatively. For instance, the buying power of people can be limits
buying power of people which can reduce the sale of organisation (Likoko and Kini 2017).
Social factor: This factor is connected with social needs and wants which are satisfied by
business organisation. This covers culture, value, beliefs, change in lifestyle, taste and customers
preference that has impacted on Asda organisation:
Positive impacts: This factor affected business organisation positively as Asda is
focusing on different culture and tradition of people who are of different places and provide
products and services accordingly which helps to maintain the profits.
Negative impacts: This may impact negatively on organisation if Asda is not following
the changing in demand and culture of people which switch the interest of customers towards
others.
Technological factor : Every business company wants new innovation and technology in
their business which helps to continue a business and increase production and profitability.
Positive impacts: The positive impacts of new technology on Asda as operational
activities are increasing continuously. It provide online shopping, payment, and booking new
product in advance with the help of new technology which increase production.
Negative impacts : This factor disturbs the Asda's business and its function as employees
are required training and special skills to acquire the new technology and innovation process
which is cost effective decision for business (Meiners, Ringleb and Edwards, 2014).
Legal factor: This factor comprises with laws, regulations and rules such as employment
laws, health and safety, equal pay, anti discrimination and food safety regulation which may
affect the business operation of Asda company that are defined as:
Positive impacts: Asda's business is increasing continuously as it follow health and
safety and food safety rules which ensures customers that organisation is providing better quality
of products and services that grows business.
Negative impacts: It increases cost of production of Asda, to provide better quality of
products and equal pay to employees that increase cost of organisation. Resulting this factor
affects Asda's business negatively.
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Environmental factor: This factor comprises with environmental rules, biological
changes and other factor which impacted on Asda's business such as:
Positive impacts: Asda ensure that organisation is following biological changes and
climate change that helps to increase the organisational productivity and profitability.
Negative impacts: This can impact negatively in case of not following the pollution act
and reducing carbon emission effect then organisation cannot perform business effectively
(Oriesek and Schwarz, 2016).
M3 Appropriately application of PESLTLE model
PESTLE model is used by Asda company to know which factor can impact negatives and
which one positively. Such factor can not be control because they are external factor but it can be
overcome by analysing that helps to take further steps in order to perform well (Quinlan, Babin,
Carr and Griffin, 2019). Asda is a supermarket that uses PESTLE analysis to know impacts on
operation which helps to run a business effectively.
Task 4
P5 Internal and external analysis of specific organisation
Internal analysis of business organisation is need to analyse the strength and weakness of
business. This is used by all corporation to know the strength and weakness that can be control
by organisation. The SWOT analysis of Asda super market is stated as:
Strength:
 Asda is big super market that create a good culture between distributors and
dealers which helps to promote business.
 It has good and successful track record that attracts customers towards itself.
 It offers better quality of products and services by analysing needs and wants of
people (Saleem, 2015).
 Asda provides training and education to its employees which make them more
skilled and work proficient.
 It has string brand portfolio that attracts people to buy products and services.
Weakness:
 Gap in product range that can switch customer for other brand.
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 Asda is not focusing on employees needs so there is high attrition rate (Shehu
and Mahmood, 2014).
 Number of supermarket are available in UK that are increasing competition.
 High spending on research and development.
Opportunities:
 Support of government for opening new market that increase productivity.
 Focus and adoption of new technology in supermarket.
 Focus on new trend and consumer behaviour which create opportunity for Asda.
 New environmental policies.
 Retention of loyal customers for buying products.
 Retail prices of products and services.
Threats:
 New rules and regulation in context to product safety and maintaining standard
 Habitual of customers for other brand
 Changes in inflation rate that can limits the organisational sale
 Changes in currency rate
 Entering new supermarket that may become competitor of Asda which can reduce
the sale and profits of such organisation.
M4 Application of SWOT
SWOT analysis is a tool which is used by business entity to increase the business
performance and make effective regulations to overcome the weakness and threats. In the
business organisation there are various element which can affect the business industry and
maintain the profits (Wetherly, 2014). In context to Asda, SWOT analysis states the strength and
weakness of business organisation and make efforts to remove the threats which helps to
maintain the high profits. Herein, organisation increases productivity and profitability of
business entity.
P6 Strength and weakness interrelation with macro factors
The strength and weakness of Asda is interrelated with macro factors that are as explained:
Political factor Strength: Political stability and tax rate is strength for Asda as
it can increase the production and profits by selling the
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products (Wood and Logsdon, 2017).
Weakness: Changes in government regulation can reduce the
productivity of Asda because new regulations are need to
follow by Asda.
Economical factor Strength: Decrease in interest and inflation can be strength for
business organisation as it helps to increase the business
activities by increasing customers.
Weakness: Increase in interest rate impacted business activities
negatives as it has to pay extra charges which reduced the
production level.
Social factor Strength: The needs and interest of customers increase
business activities and performance which helps to maintain the
profitability.
Weakness: Asda faces many problems due to changing in
culture and interest of people that is negative point for Asda.
Technological factor Strength: Selling activities of Asda is increasing by adopting
new technology and innovation in supermarket.
Weakness: Cost structure of Asda affected negatively due to
accepting new technology and training provided to employees.
Legal factor Strength: By paying equal pay and quality of food Asda is
becoming strong organisation that helps to retain the employees
for long term.
Weakness: Asda's production can be reduced if not following
food safety and employment regulations which also reduce the
profits.
Environmental factor Strength: Use or wastages and low carbon emission strengthen
the business performance (Chungyalpa and Bora, 2015).
Weakness: Not following rules and regulation related to
environment organisation can run business properly.
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D2 Impact of macro and micro factor on business objectives.
Micro and macro factors are those factors which arises in business organisation in order
to run and increase business performance. In business industry there is needed to analyse the
different factors during taking any decision that can impacts on overall business performance of
organisation. Macro factors are consider as political, social, economical, technological, legal and
environmental factor which impacted on business. For instance, Asda is following different legal
, technological, environmental and social factors that helps to maintain the profits effectively by
increasing production.
CONCLUSION
Micro factors such as SWOT analysis which states the positivity and opportunities to
Asda organisation which helps to remover the obstacles and increase profitability. To run a
business successfully and independently there is need to analyse the business environment which
states the production and profit level. In business environment there are many factors such as
micro and macro which impacts on business activities. Macro factors are consider as external
factors that are arises out of the organisation and not easy to control over them. On the other side,
Micro factors are internal factors that defined strength and weakness of organisation.
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REFERENCE
Books and Journal
Aithal, P. S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. International Journal in Management and
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Apăvăloaie, E. I., 2014. The impact of the internet on the business environment. Procedia
Economics and finance,. 15. pp.951-958.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Cairncross, F., 2014. Green Inc.: guide to business and the environment. Routledge.
Likoko, E. and Kini, J., 2017. Inclusive business—a business approach to development. Current
opinion in environmental sustainability,. 24. pp.84-88.
Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business.
Cengage Learning.
Oriesek, D. F. and Schwarz, J. O., 2016. Business wargaming: securing corporate value.
Routledge.
Quinlan, C., Babin, B., Carr, J. and Griffin, M., 2019. Business research methods. South
Western Cengage.
Saleem, S., 2015. BUSINESS ENVIRONMENT,. 3/e. Pearson Education India.
Shehu, A. M. and Mahmood, R., 2014. Influence of entrepreneurial orientation and business
environment on small and medium firm performance: a pls approach. Advances in
Management and Applied Economics,. 4(4). p.101.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford
University Press.
Wood, D. J. and Logsdon, J. M., 2017. Theorising business citizenship. In Perspectives on
corporate citizenship (pp. 83-103). Routledge.
Chungyalpa, W. and Bora, B., 2015. Towards Conceptualizing Business Strategies. International
Journal of Multidisciplinary Approach & Studies, 2(1).
(Aithal, P 2016)(Apăvăloaie, 2014)(Botha, Kourie and Snyman, 2014)(Cairncross,
201(Likoko and Kini 2017)(Meiners, Ringleb and Edwards, 2014)( Oriesek and Schwarz,
2016)(Quinlan, Babin, Carr and Griffin, 2019)(Saleem, 2015)(Shehu and Mahmood, 2014)
(Wetherly, 2014)(Wood and Logsdon, 2017) (Chungyalpa and Bora, 2015)
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