Analyzing Business Categories and Performance

This assignment requires a comprehensive analysis of various business categories based on their size and form. It involves identifying the inter-relationship between a company's strengths and weaknesses and examining how macro factors influence its overall performance. The analysis should delve into exporting and innovation performance, transparency in business practices, and the role of business intelligence.

BUSINESSES AND
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different types of organisation .............................................................................................3
P2 Scope and Size of Organisation.............................................................................................5
TASK 2............................................................................................................................................6
P3 Organisational structure and its function ..............................................................................6
TASK 3............................................................................................................................................9
P4 Identify positive and negative impact of macro-environmental factor upon UK Retail
Sector...........................................................................................................................................9
P5 Conduct SWOT Analysis and Five Forces Analysis upon UK Supermarket .....................11
TASK 4..........................................................................................................................................12
P6 State how strength and weakness interrelate with external macro factors...........................12
CONCLUSION .............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
Business Environment compromises of all internal and external elements that affect the
entire functioning of the company including customers, employees, management, investors etc. It
means collection of all entities, individual and other factors, which may or may not be under
organisational control, but can impact its profitability, performance, survival and even growth
(Añón Higón and Driffield, 2011). According to Scholell, “The environment of business
composed of entirely external forces to which it is exposed and by which it may get affected
either directly or indirectly”. The given report is based on identifying the impact of both micro
and macro factors on UK Supermarket Sector. This report covers different types of organisations
and its scope, function and structure. PESTLE, Five Forces Analysis and SWOT Analysis on UK
retail sector and also explain the inter-relation between strength and weakness with external
macro factors.
TASK 1
P1& P2 Different types of organisation and its size and scope
An organisation can be organised and run in one of several ways and the form selected by
its owner will affect legal liability of both owner and company. The aim and objectives of each
form is different from one another. For example: The goal of profit motive organisation is to
maximise their revenue. On the other hand, non-governmental organisation works for the
betterment of society and its members. Organisations are mainly classified into three categories
which are discussed below in detail:
Profit: It refers to a business entity whose main goal is to make money. Such enterprises
generate more money than it expends. They use variety of strategies or tactics in order to make
huge profit. Their main focus is to increase the productivity and efficiency of their employees so
that can yield higher returns and profit for them. In-fact, most of the companies are considered as
profit-oriented in UK. The contribution of all these firms towards economy is very healthy as
they aim at increasing their profit which proves to be beneficial for whole country as greater they
earn, more taxes they have to pay. That tax is ultimately spent back on country's residents. Such
type of corporation possesses the capacity to grow and develop at faster rate as compared to
other businesses and this eventually enables to employ large amount of people (Bar-Isaac and
Shapiro, 2013). This indirectly leads to lower the employment burden on government. For

example: From the past 55 years, the main purpose of Primark is to yield tremendous profits.
They only work for their own interest and get the chance to isolate themselves from all worldly
matters and do whatever is the best for them
Non-Profit: These are also known as non-profit institution or non-business entity. Such types of
organisations are the one who uses their revenue to attain its ultimate objective instead of
spending or distributing their income among company's members, shareholders or leaders.
Charities, association, co-operatives come under this. Initially, its funding is managed by their
trustees or members who do not expect even re-payment (Barnas, 2011). These corporations are
normally tax exempted and contribution made by them is often tax deductible. For example: Fair
Ways deliver an extensive range of services to young people and children including training,
social care, support and education services. In United Kingdom, IRS identifies the tax status and
validity of NPOs. It is often depend upon employee dedication who believes in their cause
because it is difficult for them to compete with wages of private sector. The entire funding of
NPOs is managed through only external sources like donations.
Non-Governmental Organisation: It is a kind of non-profit, voluntary citizen group that
functions independently even without the interference of government. In-fact some of the NGOs
are organised around particular issues such as health, environment or human rights. They are
considered as a sub-group of all corporation founded by local citizens, including association and
other clubs that renders services, premises and benefit only to its members (Becker, Kugeler and
Rosemann, 2013). For example: 4thechildren is a UK based NGO, mainly concerned with
welfare, safety and human rights of children. They execute variety of humanitarian function and
services like bringing people concern to government, motivate political participation through
provision of information and monitor and advocate policies.
Basis of Comparison NGO NPO For Profit
Meaning These are mainly
established by
independent citizens
with an aim of
protecting &
promoting the rights
The main focus of
such organisation is to
provide goods and
services to customers
that fulfil their needs
and expectation in an
Such type of
corporation exists with
only motive of profit
making.

and interest society
and its members.
effective and efficient
manner.
Area of Operations Big Modest Can be Modest or Big
Primary Motives Welfare of the society
and its members.
Promotion of
commerce, art,
science, research or
any useful purpose.
Maximising profit by
selling product and
services to consumers.
Examples Primark company Fairways 4thechildren
Size and Scope of different organisation:
Organisation can also be classified on the basis of size also which are discussed below:
Micro: Such types of businesses are very small and operate with minimum number of employee
nearly around nine or even lesser than that. The company is started with very less amount of
capital with an aim of providing goods and services to local people. These are managed, run and
controlled solely by business owner (Becker, Kugeler and Rosemann, 2013). The main objective
of such enterprises is to earn money for fulfilling the requirement of their family members or to
support them. Street vendors, carpenters, plumbers, bakery owner are some of the example of
micro-enterprises. The only reason for their expansion is when something changes in their lives
and they are required to make larger income. However, the operation of such enterprises aims at
improving the social status of people who are living nearer to them by providing them job in
their small shops.
Small: Such type of organisation are normally owned by partnership or sole proprietors. The size
of these firm is comparatively large as compared to micro enterprises. Their main objective is to
yield profit and maintain firm's goodwill. The number of workers ranges between 50-100. These
are significant to the economy for industrial for diversification and growth. However, the
definition of these enterprises may vary in different countries but the underlying concept is
similar for all. For example: Showrooms.
Medium: Medium enterprises provides employment opportunity to near about 200 people or
more than that. Such businesses runs with an aim of capturing large market share and yield profit

for smooth functioning of its day to day activities. They are also known as an employment
creator of the country(Bhaduri and Ha-Brookshire, 2011). For example: Unicorn Grocery is a
co-operative supermarket store that mainly deals in selling grocery and household products.
Their main motive is to gain high competitive advantage over their rivals.Moreover their
turnover is high as compared to small and micro enterprise.
Large: Such type of organisation employ more than 250 workers which is quite large as
compared to small, micro or medium. These are normally run, managed and controlled by its
members i.e. partners of the company (Campbell, Edgar and Stonehouse, 2011). The main
objective of large enterprise is to maximise their revenue every year and maintain strong
goodwill in the market.
Objectives Differentiation:
Micro: Their main objective is to support its family member and satisfy their needs.
Small:Primarily focusing on earning livelihood and also aiming at yielding profit for expansion.
Medium:They laid stress on capturing high market share and high profitability.
Large:They mainly focusing on gaining high competitive edge.
TASK 2
P3 Organisational structure and its function
Scope and Structure different types of organisation:
Micro: Eventually, micro enterprises are not having much scope or we can say that their scope is
limited and chances of expanding their business is quite less. In-fact they doesn't have scope for
opening their other branch in same city or town. Moreover, such type of business concern are
having no organisational structure as it is solely run & managed by its owner.
Small: Small-firms are having much scope as compared micro-enterprises but less as compared
to medium or large. They possess scope for its business expansion or diversification. Moreover
they are flat organisational structure because of less involvement of people.
Medium: The scope of such organisations are vast and they possess great chances of expanding
its business through franchisee, joint venture etc. In-fact such types of entities are having
functional organisational structure.

Large: Scope of large organisation are quite huge as compared others. They have their branches
in many countries which all are contributing in generating higher profits for them (Campling,
2012). Their organisational structure is a mixture of functional, divisional and matrix structure.
Transnational International Global Organisation
Definition: These are more complex
organisation as they
have invested huge in
foreign operation. They
are separate marketing
and R&D team for each
individual foreign
markets.
Such types of
companies are mainly
act as exporter or
importer. They does
not have investment in
other foreign countries
or outside their home
country.
Such type of
organisations are
operating their
business practices in
many countries. But
they are not selling
similar or identical
product. Though some
of their products are
similar but they laid
more stress on
adapting product and
services as per the
need of local market of
particular country.
Complexities: One of the major
complexity that
transnational are facing
is in the form of lack of
adequate resources and
shortage of funds. As
such types of companies
are having distinctive
R&D department for
each foreign market
which means great
They are taking the
advantage of
expanding business
across international
boundaries which
lacks them gaining
high competitive edge.
Such types of
companies are facing
problem in
establishing proper co-
ordination and co-
option among their
branches.

proportion of investment
is required for this
which sometimes they
lack.
Mission and objective of the company are interrelated with the functions of an organisation
because there are various kind of functions along with activities which are performed by the
company with the motive of attaining objectives. This allow the company to attain the growth
and success and accomplishment of goals and aims. Activities and tasks which are being
conducted by the company mainly relates with mission (Docherty and Nyhan, 2012).
Hence, as per the objectives strategies and plans are being formulated and implemented. There
are various techniques and tool which are being adopted by the company for attainment of
objectives and thus operations are being conducted as per plans which are being formulated.
TASK 3
P4 Identify positive and negative impact of macro-environmental factor upon UK Retail Sector
The retail sector of UK remains one of the most essential part of the economy. The
overall worth of the sector is 300 billion pounds and contributes almost 20% to UK's GDP.
Retail Sector is considered as UK's major private employers who provides large number of
employment opportunities to approx 4.2 million people. There are near about 428,000 business
units currently operating in retail industry. However, with the passage of time, companies under
retail sector are facing major problem in the form of macro-environmental factors that possess
adverse affect on the entire functioning and operation of companies falls under the category of
Retail Industry.
Political: These factors identify the extent to which government can interfere or may impact the
economy of particular industry. For instance: Suppose government impose new tax which
indirectly influence the overall revenue generating model of company. The activities of retail
shoppers are affected by the policies and structure of political parties or government in numerous
ways. One of the main political factor that adversely affect TESCO is exercise of power over
sites through the land-use planning system. The policy is concerned with location of retail stores.

Issues such as business rates, VAT rates also affect the overall retail industry. As it enable
consumer to spend less on purchasing such highly charged products.
Economical: The economic structure of UK has a direct influence on the retail landscape. The
majority of retailing sector is mainly dominated by large Multi-national stores which are
headquartered outside the boundaries of country (Cavusgil, Ghauri and Akcal, 2012). There is an
increased requirement to promote and encourage foreign based stores and local investors such as
Walmart to continuing in dominating the market. Moreover the interaction between economic
and political environment is much dominated by these multinational global players. There are
many other factors as well that possess negative influence on the profitability of UK's retail
sector such as global financial crisis. Moreover the level of employment and UK's disposable
income also affects retail sector.
Social: The UK Population is facing numerous change in the form of lifestyle and social changes
that have considerable affect on TESCO. It has been observed that needs, attitudes, wants and
beliefs s changing rapidly (Isik, Jones and Sidorova, 2011). According to KURT, trend of
consumer are like to get affected by depressed mood of customers. Moreover the country is
becoming increasingly diverse. Choices of young generation as well as old generation gets
affected by these trends.
Technological: The retail sector has been completely transformed by recent technological
advancement and innovation . In order to survive in the market, retail outlets mainly laid stress
on enhancing their overall productivity and efficiency. The recent trend witnessed by retail
industry is in the form vast shit of customer to online shopping. With the introduction of this,
buyers can simply purchase products as per their need by just one click. This create an urge for
all retail stores to launch its online application. TESCO, are having its own online shopping
application. This enable to avoid the chances of customer retention. Moreover, with the
introduction of social media platform, every retail store is now focusing on promoting their
products through various social media websites such as Youtube, Twitter, Facebook etc.
Legal: The retail industry requires to follow the regulation and standard of EU laws. For
instance, Companies like TESCO are obliged to follow Minimum wage act should be taken into
account by every retail outlet as they are the one who are contributing significantly in given
various employment opportunities to UK local resident.

Environmental: Such factors are identified by surrounding environment. Today residents have
become more protected towards the environment which indirectly impact the profitability of
retail stores. For example: People have stopped wearing original leather made up of animal. In-
fact companies like Tesco have initiated their green movement towards protecting the interest of
society and its members (Louhiala-Salminen and Kankaanranta, 2011). TESCO have decided to
reduce its carbon footprints.
P5 Conduct SWOT Analysis and Five Forces Analysis upon UK Supermarket
SWOT Analysis:
Strength:Very first strength which is financial banking of the retail sector if it has the plenty of
capital and access to the bank loans. Another strength which can be the cheaper wholesale price
of the retailers. Along with this, there are many kind of products which are being offered by the
company as compared to other retailers. TESCO can be taken up of clothing store which may
sell high quality but slightly defective clothing at the low price (Pingali and Roger, 2012).
Weaknesses :By the help of market research, it is being checked regarding the weak image of
the brand and lack of identity within the marketplace. Way the Policy is being drafted in TESCO,
retailer can set up the stores in those kind of states where they have agreed for the future for
allowing the FDI in multi brand retail. There is the poor infrastructure along with supply chain
management due to which taxes are being multiplied, high taxes on fuel, high percentage of
logistics and many more. There is the less conversion level and it has been observed that the
actual conversion of footfall within sales for the mall outlet which is about 20-25%. Besides this,
high street store of retail chain which has an average conversion about 50-60% which in result a
stand alone has ROI of 25-30% with in contrast of retail majors which are experiencing a ROI of
8-10% .
Opportunities: TESCO is taking the advantage of Digital Strategies which is the high demand
of the customers for improving the experience in terms of searching, browsing and conducting
the transactions online. Rural retailing Customer centric approach (Stroke, 2015). Changing the
Regulatory scenario
Threats: Availability of Land and Real Estate, Human Capital and Shopping Culture
Five Forces Model

Bargaining Power of Buyers: In retail industry, customers possess high power. At the financial
crisis, buyers become very sensitive towards high price clothes. They started spending much on
purchasing low price products as compared to high priced product.
Threat of new entrants: Retail industry of UK has always been found in the middle of price
wars, global rivalry and alteration situation which denotes that country is massive competition in
terms of retail sector.
Threat of substitute: Retail sectors provides large variety of goods and services to its
customers. With this diversity, we cannot stop customer's from shifting to another brand who
satisfies their need in cost-effective manner (Wilson, 2014).
Bargaining power of supplier: In retail sector, supplier owns enough power to regulate the
entire industry. They are known as the important player of the society and main role of supply
chain is executed by them. If retailers doesn't offer good prices to supplier, they will not get the
goods to sell.
Threat of rivalry: It has been observed that high intensity of rivalry found in retail sector which
enables customers to try the product or services of other brand as well. Moreover in order to gain
high competitive advantage over one another, retail stores are using different tactics to seize the
attention of customers.
TASK 4
P6 State how strength and weakness interrelate with external macro factors
One of the main strength of Retail Sector is launching online application that enable
customers to buy product by just one click. This is mainly possible because of technological
advancement and innovation which allow retail store to expand and diversify their market
operation all across the globe. Moreover with the help of technological factor, companies can
remain in touch with their target audience and keep continuous eye on changing needs and
expectation of customer (Steve and knight, 2011). In today's competitive environment where
likes and dislikes of customers are changing frequently there are still plenty of retail stores who
aims at fulfilling such needs of their potential buyers.
The biggest weakness that retail industry is facing is rapid change in the taxes or policies
imposed by Political parties or Government. Any change in policies related with retail sector
possess adverse impact on the entire functioning and operation of Retail Industry. For example:

Increase in VAT affect the purchasing power of customer. Customer starting thinking before
making final purchasing. Moreover with increased VAT, customer prefer to purchase product
with lower price as they are also fulfilling its requirement as same as high price products are
doing (Brokylyn, 2015). Another weakness can be in the form of lack of availability of land and
skilled human resources which are essential for carrying operation of retail in an effective
manner.
CONCLUSION
As per the above mentioned report, it can be concluded that both internal and external
factors possess adverse influence on the overall functioning and performance of company. There
are various tools through which organisation can determine the impact of these factors such as
PESTLE Analysis, SWOT Analysis, Five-Forces Analysis etc. Further companies have been
categories on the basis of its size and form. In addition to this, inter-relation between strength
and weakness and macro factors have been observed so as to determine the impact of these
factors on company's overall operation.

REFERENCES
Books and Journals
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