Business Environment: Analysis of ASDA Supermarket

This report analyzes the business environment of ASDA Supermarket, including the relationship between different organizational functions, the impact of macro environment on business operations, and the external and internal analysis of the organization. It also discusses the strengths, weaknesses, opportunities, and threats faced by ASDA.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 & P2 Covered in PPT.............................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between different organisation functions and its main objectives....................1
TASK 3............................................................................................................................................3
P4 Explain positive and negative impact of macro environment on business operations..........3
TASK 4............................................................................................................................................6
P5 External and internal analysis of chosen organisation...........................................................6
P6 Relation of internal factors with external factors...................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment refer to evaluation of internal and external elements that straightly
influence the operations of business activities and functions in adequate way. It will discussed on
the relation of various organisation and evaluation in several elements which will affect the
functions and activities. Entire essential functions which affect the productivity and profitability
of enterprise within the company should be effective to impact positively on operations. ASDA
stores is a British supermarket that was formed back in 1965 which headquarter is in West
Yorkshire. A company deploy its organisational area for aiming more consumer in regard of
services and products (Bryman and Bell, 2015). The major motive of this report is to discuss
several scope, size and types of organisation that present the actualisation company position.
Also through PESTLE and SWOT analysis that evaluate their targets and business in more
effective manner. This report will also address various interlink between macro and micro
environment as well as how the impact on strengths and weaknesses of ASDA.
TASK 1
P1 & P2 Covered in PPT
TASK 2
P3 Relationship between different organisation functions and its main objectives
ASDA is a multinational retailing company that is based on UK. The organisation's main
objectives is to create and strengthen good relationship with their worker in order to make
organisation better and more developing. They also improve various creative and innovative
products that offer in huge trade. A company majorly known for their USP of products that avail
them potential buyers in effective style. They main of satisfying requirements and demands of
consumer that assist in gaining more productivity and profitability within the company (Carlin
and Schaffer, 2012). Major goal of company's to gain more benefits through attracting buyer
using various functions and marketing technique.
Though a ASDA require various elements for creating or portraying a goodwill in the
competitive industry, there are various functions of business that a large organization like ASDA
play in development and attainment of business objectives. Here are mentioned some functions
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of ASDA and how they are interlreated with their business objectives helping them in meeting
the success.
Finance: It is one of the major departments of large organisation like ASDA that avail in
managing and controlling financial expenses and allocation of budget of enterprise for various
departments. There are two major individuals that play entire functions in ASDA finance i.e.
accountant and finance manager (Cavalcante, Kesting and Ulhøi, 2011). Accountant is
responsible for documenting and reporting entire finance and funds information of ASDA
including loss, profits, revenues, sales amount, purchase, income, outgoings etc. On the other
side, finance manager is responsible for assigning budget for various purposes as well as
managing funds, debts. sponsors, supply and other mar decisions linked with this department.
It is main division of ASDA or every other organisation as it avail in managing latest
techniques and trimming extra cost of the activities and operations which have been undertaken
by company through balancing use of funds in effective way. This is it avail in reaching business
objectives of firm.
Human resource management: Human resources are considered as back bone of an
organisation specially large companies like ASDA. These individuals are essential to manage
entire activities and operations of an organisation in adequate way availing company attaining
their business objectives through meeting determined targets. ASDA need to manage wages,
vacation, relation of employee and other essential aspects in order to satisfy need of employee
(Cavusgil and et. al., 2014). This can direct company toward better productivity of operations
which lead to success or objectives achievement of firm.
Production Department: It is required to manage products and services which a company
deal in the market for exchange of monetary services. A consumer focus over those services
which are in better quality in minimum cost. This division handle relation with production sector
of ASDA undertaking various essential process such as research of consumer choice,
management of work, full utilisation of resources as well as distribution of services etc.
This is better quality of products which is leading company toward success and new
heights of achievement among string competitors of ASDA. The company is helped by
production Dept. in managing activities and manufacturing best services for clients.
Management and IT: As it is require to manage clerical forms or information of entire
activities undertaken by an organisation in order to make maximum profits out of operations
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(Christopher and Holweg, 2011). Management division is linked with the data documentation,
protection, consumer satisfaction, consumer suggestion services facility etc. that aim to mainly
clients satisfaction techniques by ASDA. Though, ASDA and other large organisations have
adopted the method of information technology for management of digital technology which is
use for storing information etc.
Mainly Asda focus over satisfaction of consumer through providing best quality in
retailing industry The organisation is delivering these services through help of management and
IT. Thus, this directly and indirectly avail in meeting business objectives to a company.
Thus, these activities avail a company in meeting final outcome of enterprise in more
significant way (Drucker, 2017). This is required for enterprise like ASDA to administrate all of
these functions or division in effective way in coordinate style that can maximise their result and
revenues as well as create an effective recognition.
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Illustration 1: Organisation strcuture chart, 2017

Marketing: It is required to manage communication flow among the company and its
public for enhancing and existing in competitive industry as well as meet competitive edge of
enterprise. Marketing and promotional departments handles and increase sales of products
through adopting various different approaches and techniques in order to meet target audience.
This including entire proportional campaign, advertising, business gyrate complementation or
designing etc.
This avail in enterprise's various activities as it avail in managing organisation's success
through competing main mission of enterprise which is achieving demands of consumer
increment of sales and establish a good positioning in retail industry through using various
communication and media tools (Elliot, 2011).
TASK 3
P4 Explain positive and negative impact of macro environment on business operations
Business environment affect major part of an organisation either it is a small company for
large enterprise. A company have to face various different factors for functioning their business
in better way which makes them realise that this is complicated process to sustain in the market
full of competitors. ASDA is a multinational supermarket but have strong competition in United
Kingdom such as Tesco, ALDI etc. For this, this is required for company to analyse business
surroundings or macro environment factors which can avail them in understanding the choice or
interest as well as barrier in development of enterprise.
A company focus over the process of evolution for purpose of marketing or trading in
multinational traffics. This will influences various activities as well as business operation
directly and indirectly (Grimpe and Kaiser, 2010). Through the help of PESTEL analysis, they
can examine positive and negative impact over business which is mentioned under:
Political Factors
The state ave discussed and enacted various laws and regulation after crisis period in
United Kingdom which can influenced business of ASDA in huge way. There are taxation policy
increment which the organisation is facing in United Kingdom that have bee restraining the
business of company. Though, the experts of ASDA companies is looking over the issues, the
company have planned to keep low cost of products and services which they provide.
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 Positive Impact: All these laws and legislation have been regulated on both types of
entities including small or larger enterprise. Negative Impact: This have decrease amount of revenues and profits from organisation
as well as create some limitation and boundaries which can affect enterprise in negative
way.
Economical Factor
Recession have lead United Kingdom toward unemployment which have become threat
to nation's economy (Hair, 2015). There are higher rates of interest and higher living cost the
consumer have been suffering in market. The changes in political parties and operations of
business is leading toward betterment of economic development to the company.
 Positive Impact: The term of free exchanges persuade the existing business corporation
toward deployments in the activities of export or import of company. Also the
unemployment have lead state to lean of larger enterprise then can result in subsidies in
taxation.
 Negative Impact: This can lead to complex process of dealing products and services with
the international countries cause of complication in rates of international prices.
Social Factor
The ageing census of nation is directing company toward loss as pension amount have
been increase. The company target to ethnic group which may required innovation within a
period of time for competing the competitive brands as well as evaluating consumer demands
and needs. Positive Impact: People like more advanced technology and products so the company
manufacture that can lead enterprise toward benefits and revenues increments. Negative Impact: Leading to increment of pension, the organisation is unable to deploy
their business in global market cause of lack of financial resources (Kolios and Read,
2013). Also international commodities have restrained enterprise's growth as clients are
transforming their potentiality.
Technological Factor
ASDA is trying to deliver best technology in filed of retailing stores or enterprise that is
helping organisation in development and making a unique recognition in competitive market.
There are new methods of marketing through digital and online media which the organisation
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have been adopting i.e. e-marketing and e-shopping. This have render new area of distribution of
products and services along with consumer satisfaction and conveniences. Positive Impact: Online shopping has rendered wide range of enterprise to those places
where their physical stores are not available. Digital technologies have made the process
easier and faster helping in delivering satisfaction to clients. Negative Impact: Difficult in retaining worker within the company. Also process is
making other procedures complicated and it may lead to challenges which is not easy to
solve.
Environmental Factor
These elements are directly influence by the environment and surroundings of
organization. This is required to manage elements of nature pollution free in order to sustain and
develop (Miller, Yablonovitch and Kurtz, 2012). The company is planning to develop green
services and products as well as recycling products that can lead to stronger business
sustainability. Positive Impact: Raw material can helps in improving or evolving common assets. Negative Impact: Cause of limited environment assets, the organisation may affect
directly in negative way.
Legal Factor
ASDA have been suffering various contrast legislation and laws after recession period in
United Kingdom including taxation policies which have influenced the growth of enterprise in
several ways. Positive Impact: It will avail in company protection as well as management of operations
and functions.
 Negative Impact: These can restrain growth and affect performance of enterprise in
negative way (Osterwalder and Pigneur, 2010).
TASK 4
P5 External and internal analysis of chosen organisation
ASDA is one of developing and fastest growing supermarket enterprise formed and
originated in United Kingdom. Strategy of marketing avail in promotion of services and products
of enterprise in global market. In a company, this is duty of manager to balance and manage the
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divisions or revenues of organisation for expanding it in international and domestic trade
(Schaltegger, Lüdeke-Freund and Hansen, 2012). For analysing external elements and affecting
factors, the strengths and weakness is required to be analysed which is mentioned as below:
SWOT Analysis of ASDA
Strengths Weakness
 Wide services and goods range
consisting the financial services as
well.
 Organise various popular campaigns of
marketing.
 The organisation have developed
effective communication and
distribution channel to remain always
in touch with their clients.
 This is responsible for Corporate social
responsibility initiative in society of
UK.
 Company is multinational retailing
brand provide cheapest products which
owns more than 500 store and 140,000
workers.
 The organisation has limited presence
in global market in compression of its
rivals which is more expanded.
 Their ability of cost effective prices of
ASDA have caused them banned in
running business in some nations as
those enterprise afraid of losing local
vendors business after their
establishments.
 The company require effective
management among their departments
as there is broad products range.
Opportunities Threat
 Penetration or market or entrance in
new business areas such as photo
departments, jewellery, opticians,
pharmacies etc.
 Venturing or expanding in new
developing nations or environment
such as China, India etc.
 The effective products cost have led
toward the war among competitors
linked with cost or prices.
 If company want to develop their cost,
they have been pressurised to
remaining same cost. Changing terms
and regulations of governments can
lead to various type of threat to
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 Online shopping and media have render
new opportunities of development and
marketing that company can use in
effective way.
company.
These elements of environment determine organisation's weakness which is require to
manage within a period of time in order to control outcome (Teece, 2012). The company can
change weaknesses of enterprise into strengths through help of SWOT analysis and make
favourable business environment by managing activities and operations accordingly.
P6 Relation of internal factors with external factors
An international corporation like ASDA may manufacture various of employment
opportunities. European nations are responsible for them who put their unemployment issues as
the majority and making efforts in order to solve this. The respected enterprise can easily extend
and expand quality of services and business in adequate way for referred firm. Organisation need
to develop those theories which can avail in developing their economic and high development
notes. Though, their are various internal environment elements which shaped from internal
components, the external and internal factors are interlinked with each other. The macro
environment shapes factors and opinion of micro environment. Under, it is mentioned how both
are related with each other:
Technological Factors: The technology have become of dynamic nature which changes
or evolve within span of time (Turban, Sharda and Delen, 2011). This is required for consumer
to adopt new advanced technology that the company is maintaining in the recent era. This is
increasing strengths of enterprise. Also e-commerce or shopping system have render new
consumer base ad reach to ASDA which is leading to success of company as well.
Economical Factor: ASDA play a vital role in economy of United Kingdom along with
other large organisation through rendering wide part as tax money. New higher rates of interest
have led loss in revenues and profits to company which is one of the major drawback for ASDA.
Legal Factors: Various types of legislation is followed or complied by UK state is
required to be followed by company which is limiting the development and growth of enterprise
in significant way (Wheelen and Hunger, 2011). These activities are restraining organisation's
growth which is crating major drawback for company.
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Political Factor: New taxation policies for betterment of nation's economy that is
impacting negatively on the companies specially large organisation. Consumer purchasing power
have been decrease after this, that have led them toward less sales of products and service and
doom of ASDA in retailing industry.
Social Factor: It influence ASDA, as products and services made by company is to serve
people which demands to fulfil demands, interest and expectations of public. Pension amount
increase can lead to loss in revenues which can be consider as one of organisation's weakness but
as company is developing and portraying effective image among public or worker that can help
in retaining workers.
Thus, these external factors of macro environment shapes the strengths and weaknesses
of an organization so as ASDA's. This is require for an organisation to manage the task or
activities for their companies in order to develop their company and implement new strategies of
marketing, business or promotion in more effective way (Zeng, Li and Duan, 2012).
SWOT Analysis of ASDA
Strengths Weakness
 Wide product range.
 Famous campaigns of marketing and
promotions.
 Cost effective prices wit better quality
of products.
 Organise CSR activities.
 Broad working group.
 Limited range.
 Strong competitors.
 Pressure of local vendors.
Opportunities Threat
 Expansion in developing nations.
Market penetration.
 New product development.
 Cost war in supermarket.
 Pressure of low cost
Company can organise various operations, events, campaigns and activities for managing
their positioning in competitive industry. Corporate social responsibility is one of most effective
strategy that ASDA can organise for increase their recognition and forming positive recognition
in enterprise (PESTLE ANALYSES: 6 Core Variables. 2017).
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CONCLUSION
It can be summarised from the above report that business environment incorporates
macro and micro environment study which is essential part of a company that avail a business in
various ways. This increase the efficiency of work and performance of enterprise as well as its
worker. There are various types of organisational structure which are often different n grounds of
its size, scope, purpose and other elements. Often there are four major framework of organisation
which is legal, public, voluntary and private. Some companies are made for earning benefits or
some are developed for serving people. This report also described how the business function
helps in achieving various objectives of an enterprise through performing in coordination.
Though external and internal surrounding elements are form and emerge in various different
situation as well as affect different aspects but they are interlink with each other that determines
strengths and weakness of organisation.
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REFERENCES
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Online
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<http://www.mbahelp24.com/pestle-analysis-6-core-variables/>.
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<https://www.imperial.ac.uk/environmental-policy/msc/msc-environmental-
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