SWOT and PESTLE Analysis for Business Success

This assignment provides an overview of the SWOT (Strengths, Weaknesses, Opportunities, Threats) and PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis tools used in business management. It explains how these analyses help identify internal capabilities and external environmental factors that impact business operations. The assignment also discusses how firms can interrelate their strengths and weaknesses with external macro factors to determine their market position and competitive market environment.

BUSINESS &
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Types and purposes of organisations...............................................................................3
P2: Size and scope of chosen organisations...........................................................................5
TASK 2............................................................................................................................................6
P3: Interrelation between organisational function and organisational objectives..................6
TASK 3............................................................................................................................................8
P4 Positive and negative impacts of the macro environment on business operations............8
TASK 4..........................................................................................................................................10
P5: SWOT analysis for determining the strengths and weaknesses.....................................10
P6: Interrelation of strengths and weaknesses with external macro factors........................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business refers to the companies or firms which are formed with a purpose of earning
money or profit by utilising their employees, departments and resources in a proper manner.
These employees, departments etc. contributes their maximum efforts for accomplishing the
desired organisational goals and objectives. The taken firm in this report assessment is Morrisons
which is the 4th largest retail firm of UK. This firm was founded in 1899 at Bradford, England,
UK. The company is employing more than 105,487 employees in their 498 superstores across
Britain and Gibraltar. This report will assess the size, scope, legal structure, vision, mission etc.
of different types of organisations. This report will also cover the interrelations of various
departments in an organisation. Further this report will discuss the Pestle analysis along with the
positive and negative impacts. In the end, this report will evaluate the SWOT analysis and the
interrelation of strengths and weakness with the external factors.
TASK 1
P1: Types and purposes of organisations
Organisation main aim is to increase the profitability of business operations over time so
that they can competitive advantage over other companies. To achieve this, structure and types of
organisation plays an essential role which is explained below with functional example of
Morrisons company,
Public organisation
Public company are those in which central or local government owned more than 51% of
shares. Main aim of these types of organisation is to serve the people of country instead of
earning profit. On the other hand, all the loses of company is bear by the government only.
Money needs for running the business comes through various means like tax from peoples,
different duties etc. National health services is one of the UK organisation which is owned by
central government of UK whose purpose is stated below,
1. To provide highest quality of medical services to people with minimal fees (Adeoye and
Elegunde, 2012).
2. To heighten the health of needy people with the aim of improvement in society.

Legal structure
 Local government: In this, government regulates some part of the of the country like
cities. Less authority is given to them by the state government as directions is given by
them only.
 State government: State authority handles the collection of different cities within a
specific boundary. All the directions of the work is given by the central government.
Their main aim is to make the central government schemes successful by implementing it
correctly.
 Central government: Government regulates the whole country which includes, tax rates,
laws, economy etc. Aim of central government is to make the economic conditions of the
country smoothly so that more growth would be attained by them.
Private organisation
It is a type of organisation in which business is run by the individual or group of people
with the aim of acquiring high profit. Government does not play an role in it but they have to
follow the rules and regulations set by them so to avoid legal issues. Morrison is taken for
consideration which is a private organisation and founded by William Morrison. Different
purpose of Morrison is explained below,
 To satisfy the needs and demands of customers
 To enhance the core of supermarket chains
Legal structure
 Partnership: It refers to when more than one individual operates the business. In this,
profits as well as losses are shared among owners.
 Sole proprietorship: It means that whole company is owned by a single person only and
all the decision taken by the owner will be final. Along with this, profit earned by the
business will be solely of owner only and same goes with the losses.
 Limited company: It is a type of business in which owner and business is a different
entity. Losses or profit will be managed by the company only and owner does not have
any liability in it (Shenkar, Luo and Chi, 2014).
 Transnational organisational: It is a type of organisation in which company does not
have any single place for operating their business. They have headquartered in many
countries and all work accordingly. For instance, Nestle comes under this, which as the

review of CHF 91.439 billion has more than 308000 employees all over world. Their
main scope is to diversify their products so that more customer share would be attracted.
 Global organisation: It refers to those organisation in which headquarters is fixed in the
specific place only but no operations is done in that place. All the clerical work is done in
the office. European central bank is one of the example of global organisation. They have
reserve of 0.526 trillion Euro in total and has thousands of employees.
Voluntary organisation
It is a type of organisation in which single or group of people comes together with the
single of betterment of society. All the members of organisation worked as a volunteer for them.
But before starting this type of business, founder should check all the requirements as different
countries have different rules for the voluntary organisation. Oxfam is taken for discussion which
provides support to the needy peoples includes victims from natural diastases etc. Purpose of
Oxfam is stated below,
 To improve the living conditions of people suffered from natural calamities
 To create a environment in which everyone is free for poverty.
Legal structure
 Trust: These are type of organisation in which three parties plays their role i.e., donors,
trustees and beneficiaries. Its main aim is to help the people to get what they could not
achieve due to unfavourable financial situations.
 Association: It is a group of people who have come together to achieve their common
purpose which could be anything.
P2: Size and scope of chosen organisations
As mentioned above, there are different types of organisation and so does their size and
scope which is mentioned below,
NHS
 Size: NHS has more than 1 million employees which includes permanent as well as
temporary employees. They have more than 150000 doctors who are constantly working
to provide the best quality of services. Besides this they have 100000 plus nurses and
dental staff.
 Scope: NHS has vast scope in many countries like Africa which are facing serious
conditions like drought, starvation, malnutrition etc. By covering more area like Africa,

NHS goals would be achieved in the most effective manner as their aim is to make the
environment free from diseases.
 Mission: NHS have to attain four pre set goals i.e., quality of services to patients,
innovation while providing services, productivity which refers to assistance to high
number of patients on a daily basis and at last prevent which means that eradication of
diseases like polio, malnutrition UK (Cavalcante, Kesting and Ulhøi, 2011) .
Morrison
 Size: Morrison supermarket is one of the largest retail chain in UK with 498 stores. Apart
from this, company has 105,487 employees in the UK and overall revenue of 17,262
million Euro.
 Scope: Company has vast scope in the market because it mainly operates in the UK
region only. So company could enter in to countries like India, China, Africa etc who has
ample of customers whose needs are not satisfied on a daily basis. Apart from this, they
have also started their online grocery which could help them to acquire more market
share. It would assist the company to grow their profitability in a positive way so that
they can gain competitive advantage over others. Apart from this, their market share will
also enhanced which will leads to attain sustainable business performance.
 Mission: To provide highest quality of products and services to every customers with the
aim of satisfying their needs and demands.
 Vision: To become the largest supermarket chain in the UK who provides high value for
money.
Oxfam
 Size: Oxfam organisation is made up of 20 charities which located in different countries
like Denmark, Canada etc. More than 10000 volunteers are working in these charities.
 Scope: Scope of Oxfam is not related to any profit or sales but related to usage of
resources available to them. They should regularly try to attain maximum utilisation of
resources so that their purpose of existence would be achieved. As from this, Oxfam
reach over the world will increase to a certain level which depicts that they will attain
their maximum utilisation according to their pre set goals.
 Mission: Their main aim is to provide safety materials and security to the victims so that
they can live their life smoothly.

 Vision: Their target is to remove all the problems which are faced by the people who
does not have proper resources to eradicate it (Erasmus, Strydom and Rudansky-
Kloppers, 2016).

TASK 2
P3: Interrelation between organisational function and organisational objectives
Source: Organisational Chart of Company. 2013
Morrisons is following the hierarchical organisational structure in their stores and
business operations. In this structure, CEO is the main person who controls the whole
organisation and after wards comes the different departments such as marketing, HR, IT etc.
which are controlled by the managers. These departments reports to their respective manager and
manager report to the CEO.
Morrison is the 4th largest retail firm in the UK which has several departments who are
providing their continuous efforts and support to the organisation for achieving its desired goals.
These departments coordinate with each other so that they can perform their business operations
in an effective manner. The interrelation between these departments is necessary for raising the
profit and revenue of the firm in an improved manner. The interrelation of these departments are
given below:
Finance department: Finance department is responsible for providing the funds to other
departments and to maintain the financial transactions of an organisation. Finance department
needs skilled workers for managing the confidential financial data as well as to maintain and
calculate the transactions on regular basis. These workers are provided by the HR department.
With the help of HR department, firm can hire talented individuals which can work in finance
Illustration 1: Organisational chart

department in a proper manner. With the help of these workers, finance department can work
effectively for accomplishing the desired organisational objectives and contributes to the
organisational structure of the firm.
Marketing department: Marketing department promoted the products of the firm in the
market which can be done with the help of software and tools. These are provided by the finance
department. The marketing department also needs permission for providing discounts and offers
to the customers which is provided by the HR department. With these offers, discounts and tools,
the marketing department can contribute their full efforts in attaining the desired goals of
organisation by promoting the products to improve the financials of the firm (Gupta, 2013).
IT department: IT department needs equipments and devices which are needs to be
installed in different departments. These are purchased with the help of finance department and
HR department provides the technically skilled employees to IT department for performing the
departmental work in an efficient manner. Through these, the IT department can provide its
services to the firm which support other department to work effectively for improving the
revenue and profit of the firm. This department helps in achieving the organisational goals in
appropriate manner.
HR department: HR department is responsible for hiring the suitable employees in the
company. These candidates attracts towards the company because of the job advertisement
placed by the company on social media and internet. These job adverts are placed by the
marketing department due to which the potential candidates get to know the vacant position in
the firm. These candidates then hired by the HR department which contributes their efforts for
achieving the organisational goals of gaining high market share and revenue in the UK market.

TASK 3
P4 Positive and negative impacts of the macro environment on business operations
Illustration 2: What is a PESTLE analysis
Source: What is a PESTLE analysis. 2015
PESTEL stands for Political, Economical,Social,Technological,Environmental & Legal.
It is a tool to externally analyse the business. When a company plans to expand or if any
company wants to enter into the market they go for this type of analysis to know the market
trend which is out of the boundaries of the company. UK's fourth largest company named as
MORRISONS is also applying this tool in their organisation. Morrisons is a retail supermarket
industry of UK. Now pestle in the context of Morrisons to know if these factors are affecting the
company in a good way or the bad way:
 Political: Political factor is imposing bad effect on the company because there are more
than one government legislation in UK for food retailers which creates a lot of confusion
among the retailers about what policy to follow and how to manage multiple governance.
Brexit also caused a little bit of impact on company in relation to the instabilities of
currencies and change in policies such as new import duties and tariffs. The managers of
the Morrisons are considering these changes in import duties and tariffs while developing
the new strategies due to which the impact is positive. Whereas The new import duties

and tariffs are negatively impacting the sales, profit and cost of the products which is
negatively impacting the Morrisons.
 Economical: These factors includes inflation rates, fluctuations in currency etc. The
inflation rates in UK after the Brexit are increasing due to which the purchasing power of
customers is decreasing and prices of food and grocery products are also increasing due
to high inflation rate. This leads to decrease in the sales and profit of the Morrisons as
they are majorly operating in UK. The government of the UK is stable even after the
Brexit due to which Morrisons has the opportunity to grow as the influence of Brexit will
reduce with time which is positive impact on the sales of Morrisons.
 Social: These factor are the culture, taste, religions and preferences of people which can
impact the profit and revenue of the Morrisons both in positive or negative manner.
Education level and attitude of society is positively impacting the Morrisons as they are
providing good quality products to consumers and the consumers are also supporting the
firm as they prefers the quality over prices. Also the People who are little health and
environmental conscious are still buying things from supermarkets instead of buying
things online which is again a positive impact. Whereas Due to the increase in inflation
rate and change in tariffs, Morrisons needs to increase the prices of their products which
leads to the dissatisfaction among the customers which is negatively impacting the brand
image and profit of the firm in Rural areas of UK.
 Technology: In case of Morrisons, they are cutting cost and reducing stock but
simultaneously focusing more on customers demand and satisfaction which is a positive
impact. The Morrisons is using the technology such as QR codes, automatic shopping
carts, self checkout etc. which are assisting the customers to shop with ease and
comfortably. Whereas in some of the stores, updated technology has not been
implemented yet along with the distribution chain which is negatively impacting the
company as the customer base of the Morrisons is decreasing due to the dissatisfaction.
This is also lowering the sales and profit of Morrisons.
 Legal: These factors includes the laws and regulations imposed by the government on the
firms. The Morrisons is following the employment laws such as fair wages act, anti
discrimination act and equal pay act which are positively impacting the firm as the
employees are satisfied and motivated in their working due to the benefits, equal pay and

equal treatment. are impacting the company in both ways positive as well as negative,
there are some of the legal standards which companies have to pass this kind of standards
improves the quality of their work. Whereas the Morrisons are importing their products
from other countries due to which they needs to pass through several legal procedures at
the UK ports and their wastage and cost during the importing procedure is increasing.
This is negatively impacting the firm and its profitability.
 Environmental: The use of plastic bags has reduced in the supermarkets of Morrisons
which is giving good impact on the brand image of the Morrisons as people are getting
health conscious and due to this they are supporting the firm. Also the firm is following
the laws such as Control of pollution Act, 1974, Environmental protection Act, 1990 etc.
which is also positively impacting the sales and profit of the firm. Whereas the firm is
using the paper bags which are costly then the plastic bags and due to this the revenue of
the firm is decreasing along with the profit margin. This is negatively impacting the firm.
TASK 4
P5: SWOT analysis for determining the strengths and weaknesses
Illustration 3: SWOT analysis
Source: SWOT analysis. 2016
Swot analysis is used by the Morrisons company to determine the internal capabilities
and flaws of organisation which can impact the business operations. SWOT stands for
strength,weakness,opportunity and threats. It is the tool to analyse the internal as well as external

environment. Two of them(strength & weakness) are used to analyse internal environment and
the other two(opportunities & threats) represent the external environment.
SWOT of Morrisons
Strengths Weakness
 The Morrisons is providing huge
product range(cloth,beverages,food
etc.) to their customers dealing in more
than 500 stores and as a result the
customer base of the firm is huge.
 And the Morrisons have good
distribution channel as well as
integrated supply chain.
 The company is also operating Online
shopping market which is one of the
strength of Morrisons
 Geographical reach of the Morrisons is
very low because of which the
company is not able to grow itself
worldwide as compare to its
competitors.
 Also the Morrisons have some previous
issues which is negatively impacting its
image.
 Weak distribution chain for supplying
the goods to store in Gibraltar is also a
weakness for the firm.
Threats Opportunities
 Increasing profit and growing market
share of the competitors such as Tesco,
Aldi and ASDA.
 Also due to the Brexit, policies and
laws of government of UK has changed
which are acting as a barriers in the
growth of company.
 Also the customers are switching to
online stores due to which company
can face threat in future.
 The Morrisons has the opportunity to
expand in the rural areas of UK.
 Developing countries such as India and
China also has opportunities for the
firm. These countries has seen strong
growth over the recent years.
 The Morrisons can also sell the organic
products as their demand is increasing
in the supermarket.
SWOT of Tesco
Strengths Weakness
 Large number of customer base and  Controversy of violating patent can

stores are the major strength for the
company.
 Strong portfolio/varieties of products
and services.
 Improved use of technology in
operations and heavy investment in
R&D
diminished brand image of Tesco.
 Lack of experience in some emerging
market where the company wants to
enter.
Threats Opportunities
 Various environmental laws and
regulations for carbon emission could
pose a huge threat for the company.
 Rising cost of raw materials will affect
the profit of company.
 Mergers with various technological
companies can provide opportunities to
enhance its operation with latest
technology.
 In countries where growth of Tesco is
slow, there are opportunities for joint
ventures to improve the market share in
such countries.
 Improvement in online and home
delivery services can open new
opportunities for the company.
P6: Interrelation of strengths and weaknesses with external macro factors
The interrelation of strengths and weaknesses with external macro factors is given below:
Political: These factors are associated with trade policy, trade restriction etc. which are
regulated and monitored by the government. The managers of the Morrisons are considering
these changes in import duties and tariffs while developing the new strategies due to which the
customer base of the firm is improving. Whereas weakness is that the past issues pertaining to
farmer rights has affected the brand image and government support of the firm as the laws was
violated in the past.
Economical: These factors are associated with interest rate, inflation, tax rates etc. The
government of the UK is stable even after the Brexit due to which Morrisons has the opportunity

to grow as the influence of Brexit will reduce with time which is positive impact on the sales of
Morrisons which can be considered as a strength for the Morrisons. Whereas the low distribution
channel for the store in Gibraltar is a major weakness for the firm as product's delivery is delayed
in this location due to the weak connectivity. Also the buying power of customers is decreasing
due to the rise in inflation rates which is also a weakness for the firm.
Social: These factors are mainly associated with the culture, traditions and changes
taking places in the mindset of consumers. The customers of the Morrisons in UK are educated,
health and environmental conscious due to which they are preferring the quality of products of
Morrisons which is a strength for the firm. But due to the less reach and education level of
customers in the rural areas of the UK is considered as a weakness.
Technological: These factors takes place due to the up-gradation in the technology and
technological devices. Morrisons has a good distribution channel as well as integrated supply
chain and also the firm has implemented technology such as self checkout, QR reader, automatic
shopping carts in some of their stores which is a strength for the Morrisons. Whereas the stores
of Morrison in Gibraltar lacks the technology and distribution channel due to which customers in
this area is dissatisfied which is a weakness for the firm.
The SWOT analysis is helpful for determining the internal capabilities of an organisation.
If such capabilities are not considered by the management of the Morrisons in the decision
making process then the taken decision can negatively impact the business functions of the firm.
The negative impact can impact the performance and profitability of the firm as the strategies are
developed by analysing the strengths and weakness of the firm. If these are not identified then
the taken decision can be proved disastrous for the firm (Reed and et. al., 2013).
CONCLUSION
It has been concluded from the above report that business environment includes several
factors which must be considered by the firms for getting the success and growth in the UK
market. There are several types of organisations such as private, public and voluntary whose
objectives varies with the organisational structure. Also the departments in a firm are interrelated
with each other. These departments contributes their efforts in raising the organisational
productivity and performance along with the profit. The SWOT and PESTLE analysis is helpful
for determining the internal capabilities and external environmental factors which can impact the
business operations of the firms. Also firm can interrelate the strengths and weaknesses with

external macro factors for determining their market position and the competitive market
environment.