Understanding Business Environment Analysis

This assignment delves into the concept of a business environment and its influence on organizations. It emphasizes the importance of analyzing various factors within this environment to understand their potential impact. A key focus is on SWOT analysis, which helps identify an organization's strengths, weaknesses, opportunities, and threats. By understanding these elements, businesses can make informed decisions to mitigate risks and capitalize on emerging possibilities.

Business Environment

Table of Contents
INTRODUCATION ............................................................................................................................3
TASK 1.................................................................................................................................................3
P1Describe the type of business purpose and ownership of two contrasting business....................3
P2: Describe the different stakeholders who influence the purpose of two contrasting businesses 3
TASK 2.................................................................................................................................................5
P3 Describe how two businesses are organised...............................................................................5
P4 Explain how their style of organisation helps them to fulfil their purposes...............................6
TASK 3.................................................................................................................................................7
P5 Describe the influence of two contrasting economic environments on business activities
within a selected organisation..........................................................................................................7
TASK 4.................................................................................................................................................8
P6 Describe how political, legal and social factors are impacting upon the business activities of
the selected organisations and their stakeholders............................................................................8
CONCLUSION ...................................................................................................................................9
REFERNCES.......................................................................................................................................9

INTRODUCTION
Introduction Business environment is the combination of internal and external factors that
influence a company's operating situation. The business environment can include factors such as
clients and suppliers, its competition and owners, improvements in technology, laws and
government activities and market, social and economic trends. Environmental forces of political,
economic, social, and technological factors. These factors are outside the control of the business.
TASK 1
P1Describe the type of business purpose and ownership of two contrasting business
Partnership:- Partners must be together a common goal. This means everyone involved
should agree on proposed outcomes and the means of achieving them. All partners should agree on
the priorities and challenges their community should focus on while achievement of same goal.
Public sector firms:-All the public sector firms doing their businesses with public norm and
regulations for earning profit from market and share the profit with whole share holders and
increase the companies' marketability. Public sector firms doing business with visual directions of
the country in the business norms and regulations (Wijaya and et.al., 2011).
Private Sector company or business organizations:- Nestle also private limited
organization on Self owner or private sector company. In this business sector company more focus
on earning high profit margin from the market and reduce the internal and external expenditure for
new product development and expansion of the business into new market. Main motive of private
sector organizations is how to earn more profit from the market with customer satisfaction (Etro
2011).
P2: Describe the different stakeholders who influence the purpose of two contrasting businesses
Stakeholders:-A stakeholder is an organization that is made up of many different people. It
can be an individual or a group. Stakeholders can affect or be affected by the actions of the
organization (Manova 2013).
Owners / shareholders:-Owners of a business are the people that need to be able to make a
good enough profit every year to keep the business running (Koos 2011).
Asda:-Asda could say that they want to put up lots of stores around the world but the
owners and shareholders can disagree. New ideas will not be allowed by Asda and it may mean that
the business cannot expand which is a bad thing because it means that the company will not make
enough profit ().

The Princes Trust:-The Princes Trust is another example of a company that can be affected
by stakeholders. This is because The Princes Trust could have some new ideas help expand and be a
bigger charity but the owners and shareholders can disagree. This would mean that The Princes
Trust would not be able to make their business bigger.
Customers:-The customers are also an important part of a business because they are the
people that are bringing the profit in because they will be buying the products that the business
sells. Also if the customers are buying their products it will help the business to keep running in the
future.
Asda:-At Asda if the customers are shopping and they get a bad service then the customer
may complain or vote with their feet and not buy a product which is bad for the company because it
will make the company look bad.
The Princes Trust:-At The Princes Trust they do not have customers they have people hold
events and show to raise money for the charity to help look after the people that have found
themselves on the wrong track (Colciago and Etro, 2010).
Employees:-The employees are a big impact on the business because they are the people
that help the customers with any problems or queries that they might have. They also help the
customer by finding the products that they are looking for if the customer is struggling.
Asda:-When the employees get paid at Asda they may not be happy with pay which means
that the employees could go on strike which is bad for the company because there would be no one
to help the customers and put the products out (Wijaya and et.al., 2011).
The Princes Trust:-The Princes Trust has both employees but have a large number of
volunteers to run the business. This shows the people that they are willing to do anything to raise
money so that people are able to look after them for free of charge as the people that volunteer there
do not get paid.
The local community:-The local community is a big part of the business because if there is
a new business the area then it is good for the local’s because it means there will be more jobs and
is also good because it is bringing more money into the community (Colciago and Etro., 2010).
Asda:-The local community have a big impact on a business because if the company does
something bad then the community can complain to the council about them and it means that Asda
will get a bad reputation (Aydin and Kirişci 2013).
The Princes Trust:-The local community have a big impact on The Princes Trust because it
is a charity they need as many people as possible to raise money and hold events for the people to

be looked after (Davig and Leeper, 2011).
Suppliers:-Suppliers are a big part of a business because without the suppliers the business
would not be able to run. This is because the suppliers are the people that supply all of the
company’s products to them.
Asda:-Also Asda may run out of stock and the suppliers may not supply very good quality
food (meat) so they may complain and go to the office of fair trade about unfair prices, e.g. Milk
farmers are unhappy with what they are being paid which means that Asda may lose the suppliers.
The Princes Trust:-At The Princes Trust they do not have suppliers delivering stock but
rely on people and organisation to help look after the people that sick or need help in other ways
Asda:-This means that the staff have to be retrained and Asda have to pay staff to make
changes in the store (Colciago and Etro, 2010).
The Princes Trust:-The Princes Trust is run independently and still have to follow rules and
regulations because if they don't then they will not be able to raise money for charity.
Trade Unions:-A trade union is a group that looks after the interests of employees.
Asda and The Princes Trust:-Asda and The Princes Trust do not have union membership
anymore. This is because public owned businesses like schools/NHS or fire brigades are normally
the people that go on strike.
TASK 2
P3 Describe how two businesses are organised
HUMAN RESOURCE:-Human resource is the most important asset in the business. The
heart of an organization lies on its people. Without people, the day-to-day operation of a business
would cease to function. The success of a business relies fully on the hands of the employees
working in the company. In order to achieve the company’s goals and objectives, the company’s
Human Resource Department is responsible in recruiting the right people with the required skills,
qualifications and experience (Aydin and Kirişci, K., 2013).
MARKETING/PROMOTION:-Promotional activities and advertising are the best ways to
communicate with your target customers for them to be able to know the company’s products and
services. Effective marketing and promotional activities will drive long-term success, profitability
and growth in market shares (Koos 2011).
PRODUCTION:-It’s vital for business that the products are in good quality and free from
defects. The production department is concerned with manufacturing the products, where inputs

(raw materials) are converted into finished output through a series of production process (Colciago,
and Etro, 2010).
SALES:-In every business, sales department plays the biggest role in any organization’s
success. The sales department is responsible for generating revenue. The sales department is tasked
to ensure that the sale of products and services results to profit (Manova, 2013).
CUSTOMER SERVICE SUPPORT:-The Customer Service department is responsible for
interacting with customers regarding inquiries, complaints and orders. It also includes having a help
desk/reception and contact centres. It is important for a business to maintain and create relationship
with their customers.
P4 Explain how their style of organisation helps them to fulfil their purposes
Asda is a nationwide company but is known as WAL-MART in every other company. Asda
is the Second largest chain of Supermarket in the UK after Tesco. There Products range from food,
clothing, general merchandise, toys and financial services. It also has its own mobile telephone
network (via Vodafone network). Its head office is bases in Asda house in Leeds, West Yorkshire.
Company have 175,000 employees and have over 500 stores in the UK, the Super centres sell more
than 40,000 products so you’ll find a huge choice of groceries alongside George clothing,
household goods and electronics (Aydin and Kirişci 2013).
Asda has a hierarchical style which means there are fewer people at the top of the
organisation managing the people below. This style means that the managing directors of the
company at the top of the chart can make all of the key decisions in which way the businesses'
performance should go. Andy Clarke was a regional store manager for many years before being
promoted to the main board and he is now (Koos 2011).
Examples of Different Departments at Asda:-The IT department also work with all of the
departments because they are always looking for new ways of doing things to help the busine4ss
progress further. These types of people are not skilled buyers/interviewers but they have skills in IT
and can fix any problems and design new things for the business to then use (Gropp and
et.al.,2011).
The structure Help their Business to Fulfil Their Purpose:- Asda also have a marketing
team which is also a good thing for the business it means that they get to know what the customer
thinks, which means that they can fees back to the buyers and other departments so that they can
change the way that the display and the products are. The structure makes them work more
efficiently and quickly which is a good thing because then it means that they can stay ahead of their
competition and makes the sale grow every day (Wijaya and et.al., 2011).

TASK 3
P5 Describe the influence of two contrasting economic environments on business activities within a
selected organisation
In this report It will be talking about how a boom and a recession effects the economic
environments of Asda.
Trade Cycle
Boom:-A boom is very good for businesses because it means that the customer have more
money because they get paid at the end of the month, this means that businesses are making more
money. Also in a boom there is a lot more people that have jobs which is a good thing because it
means that there is far less unemployment in the economy. This helps businesses like Asda because
customer will have more money than if they were employed which means that the business is
making more of a profit (Koos 2011).
Although a boom could be bad news for more stores like Asda because higher earners may
switch to more high end stores like Sainsbury’s, M&S or Waitrose. In a boom businesses may be
able to charge more on products because the customers are less aware. Although customers may not
want to but value clothing like George even though they have a good reputation they will look at
higher end fashion stores which means that Asda will have to look at their adverts and quality of
their clothing and not focus on the value as much (Gropp and et.al.,2011).
Recession:-This is where there is a significant decline in the economy. These normally last
around six to eighteen months. The recession is where the economy has no money for their supplies
and resources, which means that it could lead to small businesses closing down because they do not
have enough sufficient funds to pay for everything (Wijaya and et.al., 2011.
In a recession the advertising and in store promotions and magazine will need to show great
offers and value for all. They may also need to push special discounts on home shopping though
emails and door drop adverts.
Asda have grown their market share over the last ten years even though Gross Domestic
Product has slowed.
TASK 4
P6 Describe how political, legal and social factors are impacting upon the business activities of the
selected organisations and their stakeholders
Political impacts:-Political stability is usually defined as the state of peace that is normal
experienced in a country from the activities from the government and also the government in this

situation will make decisions and keeping the best interests in mind for people.
The conservative party that is normally referred as the Tory party and is a centre – right
political party in the UK and as of 2013 it has become the largest political party in the UK and also
the largest single party in the house of commons with 303 MP’s. Govt initiatives: is when the
Government can support business through grants and tax reductions and an example of this is the
solar panels grant (Gropp and et.al.,2011).
Also the government are also offering support and funding to business that will or are
offering apprenticeships, to then try getting more people in to a job and working life.
Legal impacts:-The legal impacts are that ASDA must follow the law, and an example of
this is the trade description act, this is where the product most be described accurately otherwise it
can cause an issue and an example of this the big issue with meat earlier this year, so it is extremely
important that you describe the product well and accurately if not then the trading standards will
have no other choice but to get involved (Koos 2011).
The legal frameworks is where the business chooses the way it operates, this will then
determine who has what role and share to the business, this will also determine the relationships
between investors, employee’s customers etc.
Social impacts :-The social impacts that ASDA may face are the difficulty to recruit the
right people for the job in the stores or the offices depending on where they will be based, also most
of the workers that are in the stores are an unskilled workers on the minimum wage given.
ASDA is a company that will support charities and the main one they support every year is
tickled pink, they are always thing outside the past ways they have raised money to, give customers
a new product to buy to support the charity (Wijaya and et.al., 2011).
Demographics are the main numbers in a given population these can also be used to identify
gender, age, ethnicity, also the knowledge of languages, disabilities, mobility, home, and
employment status, and even the location you live in also most of the times these types of data are
used widely in public opinion’s, polling and marketing (Gropp and et.al.,2011).
CONCLUSION
As a conclusion, business environment involve internal and external environment. Business
environment is important for an organization to identify the weaknesses and threats. A firm maybe
strong in certain areas and it may be weak in some other areas. The firm should identify weaknesses
and threats to correct it as early as possible. This helps an organization to reduce the risk of getting
failure in their operation and development in new product.

REFERNCES
Books and Journals
Aruoba, S.B. and Chugh, S.K., 2010. Optimal fiscal and monetary policy when money is
essential. Journal of Economic Theory. 145(5).pp. 1618-1647.
Aydin, U. and Kirişci, K., 2013. With or without the EU: Europeanisation of asylum and
competition policies in Turkey. South European Society and Politics. 18(3).pp. 375-395.
Colciago, A. and Etro, F., 2010. Endogenous market structures and the business cycle. Economic
Journal. 120(549).p. 1201.
Davig, T. and Leeper, E.M., 2011. Monetary–fiscal policy interactions and fiscal
stimulus. European Economic Review.55(2).pp. 211-227.
Eaton, J and et.al., 2011. An anatomy of international trade: Evidence from French
firms. Econometrica, 79(5).pp. 1453-1498.
Etro, F., 2011. Endogenous market structures and strategic trade policy.International Economic
Review. 52(1). pp. 63-84.
Feenstra, R.C., 2015. Advanced international trade: theory and evidence. Princeton university
press.
Gropp, R and et.al.,2011. Competition, risk-shifting, and public bail-out policies. Review of
Financial Studies. 24(6). pp. 2084-2120.
Hutchison, M.M., Noy, I. and Wang, L., 2010. Fiscal and monetary policies and the cost of sudden
stops. Journal of International Money and Finance.29(6).pp. 973-987.
Koos, S., 2011. Varieties of environmental labelling, market structures, and sustainable
consumption across Europe: A comparative analysis of organizational and market supply
determinants of environmental-labelled goods. Journal of Consumer Policy. 34(1).pp. 127-
151.
Manova, K., 2013. Credit constraints, heterogeneous firms, and international trade. The Review of
Economic Studies, 80(2).pp. 711-744.
Wijaya, S and et.al., 2011. Web 2.0-based webstrategies for three different types of
organizations. Computers in Human Behavior. 27(4).pp. 1399-1407.
Online
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