ASDA Business Environment Analysis

This assignment requires students to conduct a thorough analysis of ASDA's business environment. Using the PESTLE (Political, Economic, Social, Technological, Legal, Environmental) and SWOT (Strengths, Weaknesses, Opportunities, Threats) frameworks, students will identify and evaluate key factors influencing ASDA's operations and performance. The analysis should consider internal and external factors, providing insights into the challenges and opportunities facing the supermarket chain.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
PROJECT 1......................................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various types and purposes of organisations public, voluntary sectors and private and legal
structures.................................................................................................................................1
P2 Scope and size of a range of different types of organisations...........................................4
M1 Structure, Scope and size of different organisations link to business objectives and
product and services...............................................................................................................6
TASK 2............................................................................................................................................7
P3 Relationship among different organisational functions and link to organisational objectives
and structure...........................................................................................................................7
M2 Advantages and limitation of interrelationships between organisational functions........8
D1 Analysis of complexities of various kinds business structure..........................................9
PROJECT 2......................................................................................................................................9
TASK 1............................................................................................................................................9
P4 & M3 Negative and positive impacts of macro environment on business operations......9
TASK 4..........................................................................................................................................11
P5 & M4 Internal and external analysis of ASDA company...............................................11
P6 & D2 Weaknesses and strengths interrelate with external macro factors.......................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
.......................................................................................................................................................16

INTRODUCTION
Business environment refers to an internal as well as some external factors which can be
impact on the functions of an organisation. In these factors includes customers, demand, staff
members, management etc. Under this external factors impacts on the business decisions of an
organisation. In the internal environment includes customers, suppliers, shareholders, staff
members etc. On the other hand in external environment includes political, economic, social and
technological (Aterido, Hallward-Driemeier and Pagés, 2011). These all factors can be impact
from the outside of an organisation. ASDA is a big supermarket in the retail sector in United
Kingdom country. In the present business report, various purposes and different types of
organisations will be highlighted with their scope, size and legal structure. Here this, the
relationship among various function of a company will be discussed as well. Further, the positive
and negative effects of macro environment on the operations of organisation will be explained.
PROJECT 1
TASK 1
P1 Various types and purposes of organisations public, voluntary sectors and private and legal
structures
The objectives and also purposes of each business organisation are different from each
other. There are many different organisations whose aim and objectives vary from each other.
The motive of some business firms is to earn more profit and some work for the welfare of
society by providing beneficial and high quality of goods and services. So, in this way, the aim
of every company is not same (Avramenko, 2012). There are various kinds of business
organisations like public, private and voluntary which give their contribution in the economy of
country. Some of the differences between the profit, non- profit and non- government
organisations are given below as above:
Basis for comparison Profit Organisations Non- Profit
Organisations
NGO (Non-
Government
Organisations)
Meaning These kinds of These types of It operates its business
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business firms runs
their business firms for
the purpose of earning
more profit.
business firms works
on providing the best
and effective services
to the people which
can fulfil their needs.
independently and
these all works on
solving the political
and also some legal
issues.
Motive The main motive of
this business firm to
increasing profit.
The motive of this
organisation is to
rendering the effective
and good services to
consumers.
Its motive is to
promoting the
research, science and
some of the necessary
things.
Area of Operations Limited or large Limited Large
The main purpose of three kinds of business organisations are mentions below:
Private organisations- It mainly works for increasing profits by providing effective services
which can satisfy the needs and wants of people. In this, there is no role of government. But it
gives high contribution in the economy of country. These kinds of business organisations run
their business through the group of people, private individuals, etc. Mainly, the private sector
works on expanding their business firms in different cities or areas (Blanchard, Tolbert and
Mencken, 2011). These types of business firms allow to issue shares to the stakeholders but it
cannot issue their shares in public. But these organisations also produce high quality of products
and services which can fulfil the needs and also demands of people in an effective and proper
manner.
ASDA ltd. is a supermarket retailer business firm in the United Kingdom. In the sector of
retail, it has the largest supermarket. It has many stores in all over the world. It provides business
related services through online. It is a private firm established in the year 1965. It has around 32
million customers in the world (Bughin, Chui and Manyika, 2010). It produces only those
products which can satisfy the needs of customers. Main motive of this business firm is to offer
the best quality services to its customers in comparison to rivals. This business gives many
beneficial and useful services to the consumers like for finance related facilities, mobile phones
and many others. This company gives advertisement and promotion on a large scale. In this
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business organisation, there are more than 1, 80,000 employees working. Staff members of this
company give their full contribution in achieving the organisational objectives and goals in a
specific period of time. It is a responsibility of company to provide training facilities to its
employees so that they can work well in an effective manner. ASDA organisation conducts a
research programme for doing its business operations in a better way as well as comparison to its
strong competitors (Carroll and Shabana, 2010). There are some purposes of this organisation
given below as above:
 The Profit maximisation is the main purpose of private organisations.
 The private organisations select the right organisational structure.
 It works on satisfying needs of people for the purpose of enhancing profit level. To give high contribution in the economy of country.
Legal Structure:
Sole proprietorship- It is the oldest and easiest kind of business. It can be started by a
single person. In order to start a business, there is no need of much capital. The owner of this
firm is single or an individual. In this the liability is limited.
Partnership- In this, the business is run or managed through two to twenty people under
partnership act 1890. In this, there is a need to make a partnership agreement before beginning a
business.
Limited companies- These firms operate and run their businesses privately. In this, there
is a limited liability of the members and they cannot trade their shares publicly.
Cooperatives- These kinds of associations are developed through the people which want
to raise their own lifestyle in order to earn more profit.
Public organisations- These types of firms are legal designations of limited liability
organisation which provides their services to general public and their liability is limited. Under
this the government plays an important role and it gives its contribution in the welfare of the
society (Colfax, Rivera and Perez, 2010). The minimum number of members which needs to
start a public company is 7 and maximum is no limited.
Sainsbury is a public company and it deals in the retail sector. It is the second biggest
chain of the super markets in United Kingdom country. This firm is divided in to the three
divisions and these are Sainsbury's Argos, Sainsbury's Super markets and also Sainsbury's
Bank. In this company about 162,700 staff members are working. It also provides groceries,
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electronic products, clothings, home related goods etc. There are some purposes of these
organisations are mentions below:
 It gives its contribution in developing the backward areas.
 Its main purpose to develop some surplus resources for the purpose of future
development and productivity.
 Work for the welfare of people (Fernando, 2011).
Legal structure:
State government- IT is a different institutional units which works with the functions of
government and these are below from the central government and above from, local government.
Central government- It includes administrative departments of the central along with the
state agencies and their responsibilities to cover full economic territory of United Kingdom
country.
Local government- In this involves all kinds of public administration and their
responsibilities to cover the part of local economy.
Voluntary Organisation- It is knowns as third sector and it is different from the public
as well as the private sectors (Halbert and Ingulli, 2011). It main motive is to provide some
advantages to the enrich society nor earning the profit. In this the foundations, charities,
advocacy groups and also social welfare firms are included.
Oxfam is a charitable business organisation and it works for providing the benefits to the
people. It is a confederation about the 20 business firms which are working together with some
local communities and also partners in more than the 90 countries. There are some purposes of
voluntary organisations are given below as above:
 Work for raising society.
 Give some contribution towards the society and also provide some benefits to the
people.
P2 Scope and size of a range of different types of organisations
There are there different organisations public, private and voluntary and their motives are
varied from the each other. Mainly in the business environment, there are small, medium and
also large size of abusiveness firms are included. But the size of every firm is different and their
scope is based on the their size. In this competitive market, there are more competition arise.
Mainly, the small level business firm operates its business at the local level and medium size are
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concerned to the state level and on the other hand the large size business organisation manages
its business at the international level. In most of the business firm there is a neds of only 5
members and in some of the companies there is a needs of the 20000 people (Hamilton and
Webster, 2015). Firm can be operated through the single person and through partnership.
Private organisations- IT is regarded as a main or necessary part which gives its
contribution in the economy of country. Its objective is to generate the more profit with the help
off enhancing the sales of firm. The scope of an organisation is according to the size.
The size and scope are given below as above:
Size of ASDA firm- This company is a private firm and and its size is a large. It deals in
the retail products, providing financial services and general mechanise. In this company, there
are around 180000 workers working for accomplishing their common objectives in an effective
manner. Its operating income is £1 billion. It has more than the 60 super markets in all over the
world.
Scope- ASDA business organisation and it deals in the three sectors and these are
grocery, financials services and also the general merchandise. In this large number of worker are
working for achieving the aims of company in specific period of time. There are some of the
other scopes are as following:
 In order to start a business, there is a requirement of the minimum 2 people and
maximum is no limit.
 The public organisation can be operated and also run by the single person.
Stakeholders- They are the important or necessary part of a company. They include or
take interest in the business related activities in a proper manner (Kang, Lee and Kim, 2010).
The stakeholder of this ASDA business organisations are the shareholders, suppliers, creditors,
investors, staff members etc. Some of the objectives of private firms given below as above:
 Give some contribution for welfare of society.
 Expand its business at large scale.
 Provide the better and satisfactory quality of goods to people.
Public sector- Scope and also size of public company is decided according to the
business firms. These organisations works for the betterment of the society or the people. The
Sainsbury business firm is a public company. It conducts its firms at large scale.
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Size of Sainsbury company- It is a large size business organisation and it deals in the
retail sector. In this business organisation, there are around 162, 700 staff members working. The
revenue of this company is £23.506 billion. It has more than the 1,415 stores in all over the
world.
Scope
 To conduct and also operate a business, there is a need of the more funds or
money.
 For incorporating a business, it is necessary to take permission from the
government and also issue a license (Klapper and Love, 2010).
Stakeholders- In this company, there are various stakeholders such as employees,
government, financial institutions, share holders and many others. These all stakeholders give
their contribution in business and in the process of decision making. There are some objectives
of public company given below as above:
 To be a leading firm in the retail sector.
 Satisfying the needs and also demands of people.
 To provide the better quality of products and services according to the demand or
needs of customers.
Voluntary sector- These kinds of business firms works for the advantage of people. The Oxfam
company is a voluntary firm and it is also an international charitable firm.
Size of Oxfam company- The size of this company is large and it has 1000 local partners
who works for the right of people (Mahmood and Hanafi, 2013). Some of the objectives of
voluntary organisation are as following:
 Work for welfare of society as well as people.
 To the alleviation of poverty of country.
M1 Structure, Scope and size of different organisations link to business objectives and product
and services
The Scope, structure and also size of an organisation are concerned to its business
objectives and alos services or goods which are provided by them. If the size of an organisation
will be large then its organisational objectives will be high, organisational structure will be good
and it will provide the large number of products. If in case if firm is small then its scope will not
more and it provided limited range of goods and services.
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TASK 2
P3 Relationship among different organisational functions and link to organisational objectives
and structure
In an organisation, there are various types of function work together for achieving the
common goals and objectives. They all give their best contribution in making the business
successful. In ASDA business organisation, there are many different departments are working
like human resource, operations, marketing and also finance . But the role of every department is
different, but their target is same. They all work together. The main objective of this company is
to earn more profit. So, it is necessary for the function of this company to work on achieving the
organisational objectives (Reinhardt and Stavins, 2010). In context to this, the organisational
structure plays a necessary role. It is necessary that organisational structure should be proper, so
that all function can performance well. The another objective of this company is to fulfil the
needs or requirements of customers. There are some functions of this organisation are given
below which are linked with the organisational structures and objectives:
Human Resource Function- This function is a backbone of the company. The main
work of this function is to recruit, selection, performance appraisal, payroll, training and
development etc. It is necessary for this function to provide the training to staff members for the
purpose of enhancing their skills and knowledge. From this they will work well. With the help of
this they will work on achieving the goals and objectives of company in a particular period of
time.
Marketing function- It helps in enhancing the sales as well as profit level (Siewiorek
and et. al., 2012). This marketing function attract the people towards the products of firm. The
marketing function prepare the attractive promotional schemes to attract the large number of
people. If with the help of promotion if they will be attracted then in this case sales of -products
will be high and it ill also be beneficial for the development of company. It works on satisfying
needs of company. This function works with the operation function.
Operations function- It function deals in pro ducting the better quality of goods and also
services on the basis of customer tastes and also demand. It is necessary that the quality should
be good. So that the sales of firm will be increase.
Finance function- This function of the ASDA company to arrange or manage the funds
for the operations or business related activities in a proper manner. If the fund will be proper for
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performing business activities, then all other functions will work and achieve the target in a
proper and effective way.
Some of the organisational structures are as following:
Function based structure- It is known as the bureaucratic structure. In this the function
are segmented according to the speciality. Under this firm are divided in to different
departments. In ASDA company, there are human resource, finance, marketing and operations
departments are working.
Product based- This structure is based ion the particular type of the products or services.
Under this firm divided its products. Like the ASDA company deals in the grocery, financial
services etc.
Customer based- Customer plays a necessary role in an organisation. The organisations
will be organize through the type of customers. The firm give their effort for meeting the
customer expectations.
Geography based- In this the business firms a continuance on the basis of geographic
regions (Teece, 2010). It can be done to the good support of the logistics demands and some
differences in the needs or demand of customers.
M2 Advantages and limitation of interrelationships between organisational functions
There are some benefits and disadvantages of interrelation among organisational
functions given below as above:
Advantages
 If all departments of ASDA company will coordinate with each other and work
together then they will accomplish the business objectivist in a proper manner.
Disadvantages
 If in case all function will not work together then it will develop the bad impact
on business objectives.
 If employees or departments will focus on abusiveness then they will not achieve
organisational gaols properly.
D1 Analysis of complexities of various kinds business structure
There are different types of sectors and their structure are also varied from each other. In
each business firm, there are more difficulties and complexities. In the large business, more risk
involved and in small business, less risk included. IN order to this, it is essential that firm can
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identify all risk and try to reduce their impacts. It is essential for a firm to achieving
organisational goals in a given time period. From this complexities will be reduced.
PROJECT 2
TASK 1
P4 & M3 Negative and positive impacts of macro environment on business operations
PESTLE Analysis plays a necessary roles for the strategic planning. The PESTLE means
Political, Economical, Social, Technological and Environmental. These all factors can develop
the negative impacts on the company . So, firstly it is necessary for the manager of this company
to analyse them and also then try to reduce their impacts. It is the main factor of the bsu8ienss
environment. If in case firm will not control these all factors then it will develop the negative
impacts in the mind of customers. From the the sales and profit level of firm will affected. The
manager of the ASDA company works on reduce the impact of these all factors. So, with the
help of this firm will perform its business activities in an proper and satisfactory manner.
PESTLE Analysis of the ASDA company mentions below as above:
Political factors- Under this, the government of United Kingdom country formulate some of the
beneficial policies and rules in a proper manner (Xue, Shen and Ren, 2010). In context to this, it
is the duty of business firm to follow all the rules at the time of conducting business or doing
business activities. So from this firm will perform well. In the political factors includes stability
of the government. The government of United Kingdom country give its support to the business
firms. For executing the programmes related to the financial austerity, the government of UK
minimise the subsidies.
Positive impacts
 Government stability.
 Better policies which will develop the positive impacts on business.
Negative impacts
 Governments instability.
 Continuously change in the tax rates ans also policies of government.
Economical factors- The growth and development of the company is based on this economic
factors. It is necessary for the ASDA company to include the economic factors such as
unemployment rate, economic condition and the inflation rates (Wild, Wild and Han, 2014). It is
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necessary to control all these because these all can develop the positive as well as negative
affects on the business. All the economic factors can be affect the pricing strategies of an
organisation.
Positive impacts
 Customers high buying power.
 Increment in the business activities.
Negative impacts
 Loan rates increased.
 Decrease in the economic growth or development of the country.
Social factors- It consists the standard of living of people, education, age, habits, attitude
towards the work. It is necessary to the ASDA company to develop the new goods and services
at the market place (Zeng, Li and Duan, 2012). From this the large number of people will be
attracted towards the company. It will be helpful in developing the segmentation related
strategies in a proper manner.
Positive impacts
 If firm will produce the products according to the customers taste then it ill
developed the positive impacts in the mind of people.
 Execute CSR (Customer Social Responsibilities) activities.
Negative impacts
 If company will not upgrade or maintain its infrastructure.
 If in case ASDA will not execute its CSR activities properly, then it will develop
the negative affect on business activities.
Technology factors- It is important for ASDA company to upgrade the technology so that the
performance of company or business will be increased. Manager should remove the obsolete
technology. It can develop the negative impacts on business.
Positive impacts
 Minimize the cost and time.
 Technology should be upgrade.
Negative impacts
 An obsolete technology can develop the negative affects on business.
 Continuously technological change.
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Legal factors- The ASDA company follow all the rules and policies which are formulated by the
government in an effective manner (Dahan and et. al., 2010). It applies all the laws at workplace
such as equal opportunities, wages act etc.
Positive impacts
 ASDA company follow all the rules.
Negative impacts
 Increase in the regulatory demands.
Environment factors- Under this includes increasing the temperature, enhancing the storms,
climate change etc.
Positive impacts
 There is a need to the company to determine the environment conditions before
delivering the goods and services.
Negative impacts
 Exploitation of the natural resources.
TASK 4
P5 & M4 Internal and external analysis of ASDA company
In the business environment, two main factors are includes and these are internal and
external. These two can develop an impact on the business (Hamilton and Webster, 2015). So, it
is necessary for the firm to analyse these two factors and try to reduce their impacts. In the
internal includes SWOT analysis and external consists PESTLE Analysis.
The SWOT Analysis of ASDA company given below:
Strengths Weaknesses
 It provides wide range of goods and
services.
 In this more than 140000 staff
members are working in 500 stores.
 This company understands the
buying behaviour of people.
 It conducts CSR (Corporate Social
Responsibilities) activities.
 Its major weakness is that the
presence of this company is
globally limited as comparison to
other competitors.
 It has no loyalty card to sustain
customers for long time period.
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Opportunities Threats
 The main opportunity which this
company has that it can expand its
business in to the new markets.
 It can venture in to the new markets for
growing such as China.
 It can reduce its cost as comparison to
its competitors.
 This company faces a competitiors
from the small retailers like Aldi and
Sainsbury.
 Change in the policies of different
central governments.
 Maintaining the minimum cost.
PESTLE ANALYSIS of ASDA
Factors Analysis
Political  Political instability.
 United kingdom country faces some serious sovereign problems.
 The political change can be impact on the selling cost of goods and
services.
 Trading policies.
Economical  Increase in the interest rates.
 The economic growth of country goes down due to the crisis.
 Credit crisis.
 High cost of living
Social  Change in the lifestyle.
 Enhance in the demand of Welfare and health.
Technological  This company adopt the new technology to sell its products through
online.
 Adopt new technology and remove obsolete.
Legal  Anti trust legal systems and also some strong competition in the
retail sector.
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 Policies and rules of government
 developing effective legislations.
Environmental  Impact on recycling problems and packaging of ASDA.
P6 & D2 Weaknesses and strengths interrelate with external macro factors
In the ASDA company, all the functions of this company works in a proper manner for
accomplishing goals of company. The strengths and also weaknesses are interrelates with the
macro factors are given below:
Political factors- The Government of UK developed policies and some strategies in the
favour of business organisations (Mahmood and Hanafi, 2017). But the new policy related to the
tax which was execute by the UK government is not proper for the ASDA company and it
increase the burden of consumers because they pay the more tax.
Economic factors- An economic situation which are presented in an economy was not
economy, then from this firm was not operate its business in a proper manner. So, it is necessary
for the company to reduce impact and enhance the profit level.
Social factors- If ASDA company will do give its efforts in producing the goods
according to the tastes and preferences of customers then they will be disappointed from the
services of company. If in case firm will produce goods according to customers need then it will
be helpful in attracting large number of customers.
Technological factors- Advancement in the technology increased the operations and also
activities of company. If firm will use the new technology, then cost of production as well as
time will be reduced.
Legal factors- There are different types of rules and regulations are prepared through the
United Kingdom government and firm should follow all these (Siewiorek and et.al., 2012). It is
necessary for the firm to work under the government policies.
CONCLUSION
It has been concluded from the above given report that business environment assess in
earning the more profit and also enhancing the development and growth of a business
organisation. In this given report studied about the different kinds and also purposes of the
organisations like public, private and voluntary. All those factors which are present in the
13

business environment can be impact on the business activities and operations. In this given
business report also studied regarding the interrelations among the different functions of an
organisation with its objectives and also structure. All the functions of an organisation works
together for achieving the common goals and aims of company in given period of time.
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REFERENCES
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Online
PESTLE Analysis of ASDA. 2017. [Online]. Available through:
<https://www.howandwhat.net/pestel-analysis-of-asda/>
SWOT Analysis of ASDA. 2017. [Online]. Available through:
<https://www.howandwhat.net/swot-analysis-asda/>
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