Business and Business Environment

This document explores the different types of organizations, legal structures, and factors influencing the business environment. It covers topics such as different types of organizations, legal structure, and positive and negative factors influencing the business. The document also provides study material and solved assignments on business and business environment.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Different types of Organization..................................................................................................3
Leagal Structure..........................................................................................................................4
Difference between micro, small medium and large sized organization....................................5
PART B..........................................................................................................................................10
LO 3 Positive and negative factors carries influences in the business......................................10
LO 4 Strength and weakness of the business............................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment refers to the environment activities such as internal and external
factors which affects the working of the business. The focus of the business is to provide quality
products within the set time period to the customer and also retain the suppliers interest towards
the business for longer way. Business environment is necessary to be flexible so that it enhances
the economy in the country through dealing in more imports and export of products and also
increases the chances of job facility (Saleem, 2017). Present report is based upon the Sainsbury
which is the second largest supermarket store in UK. It was founded in 1869 and at present
located in around 1,415 places. This report will cover the matters relating to the examining
different type, size and scope of organizations. It also includes the matter determining the
interrelationship between the various function within an organization. It further covers the macro
factors which examining the impact upon the business. At last, it also covers the internal factors
and its interrelationship with the external factors.
PART A
Different types of Organization
It mainly carries three types of organization, firstly the profit's organization which
primary goal is to earn profits in the business and for that they bring continuous amendment in
their working styles to attract customer towards the business. Secondly it is related to the not for
profits organization in which they work for other purpose rather than with the motive of earning
profits (Lu, 2017). Third organization is related to the non-governmental organization in which
their main motive is to be helps the needy people through supporting and providing monetary
benefits. Their main aim is not to make profits.
Profit organization Non Profit organization Non govermental organization
The purpose of the profit
organization such as in case of
Sainsbury is to provide quality
food to the customer at fair
price. They prefer to expand
the business and its operation
In case of not for profits
organization which is
explained with the
organization such as BBC
company. The purpose of BBC
is satisfying the stakeholder
Third organisation which is
related to the NGO is of
Oxfam company as the
purpose which they carry is
relating to helping the people
through donating the useful

in respect of adapting the short
term advantages to gain profits
for longer term. The size of
Sainsbury is higher as they
carry 1415 shops which are
located in various places. It is
stated that they are engaged
with around 1,86,900
employees carrying the
business globally. The scope
of the Sainsbury is to bring
innovative ideas in business so
that they can retain the
customer interest towards the
business for longer way. They
mainly deal in supplying the
high quality products at fair
prices.
interest through providing the
more quality services instead
of focusing on earning profits.
The size of the business is
around 22,401 employees
which are carrying the
business of broadcasting the
new worldwide. Scope which
the BBC carries is to provide
better services to the customer
instead of focusing on
expanding the business at
global level (Quinlan and
et.al., 2019). The services
which they are dealing is
relating to connecting large
number of person through
radio station and also fulfilling
the customer needs in better
way.
things. The size of the business
is small, but they linked up
with various other
organization. Scope of the
NGO is to motivate other
person to help the needy
people in respect of donating
the useful things to them. The
services which deal in is to
organize charity function or
any campaign activities to
reduce the poverty in the
country.
Leagal Structure
Sole trader: Sole trader is the type of the business who is the only owner of the business
and who is entitled to keep all the profit of the market. Objective of this type of the business is to
satisfy the need of the customer and making good profit out of business. This organization has
lesser scope then partnership form of the business. Sugar and ice cakes is the organization who
used to work on the sole tradership basis. Sugar and ice used to supply variety of the cakes and
backery item in the nation.
Partneship: This is the type of the business in which two or more individual who used to
come together to form the business to carry out the operqation of the business. Scope of
partnership firm is very high as they used to procure different resources from different source.

Objective of partneship firm is also to earn good sort of the profit from the market. Blackheath &
Elthamians Hockey Club is the example of the partneship firm. They used to provide there
services to train the customer in hockey field and used to charge fees in return.
Private ltd: Private limited is the legal structure of the organization which is owened by
the private individual or group of the individual. Asda is one of the exampel of the same. They
also used to operate with the sole motive of earning good profit from the market.
Public ltd: Public limited is the organization which is owned by the government of the
nation or used to have 51 percent or more share in operation of the business. This company has
limited scope as they generall used to operate in one nation only. Objective of this firm is to
satisfy need of consumer ratehr than earning profit. NHS is the example of public limited
organization.
Difference between micro, small medium and large sized organization
Basis Micro
organization
small organization medium-sized
enterprise
Large sized
organization
Meaning They refer to the
small business
which requires
lees budget to set
up. The business
is carried by less
employees
In case of small
organization, they
are higher than the
micro organization
In case of medium-
sized enterprise,
the size of the
business is good
enough to operate
at national level
In context of
large sized
enterprises, the
size of the
business used
to operate at
both the global
and national
Objective and
goal
To carry out the
business to
survuve in the
market
To carry out the
business to
survuve in the
market
They generally
operate with the
objective of
expanding the
business
Main objective
is to maintain
the goodwill of
the company
and satisfy need
of the customer

Level of activity domestic domestic Domestic and
nation
Domestic and
nation and
international.
Geograhic Home nation Home nation Home nation Home and
global nation as
well
Employee Less than 10 10 and 50
employees
50 to 250
employees.
larger than 250
Scope of
organization
Scope of the
business is to
provide the
quality services at
fair prices.
. The scope of the
business is to
increase the sales
in the company
through dealing in
more buying or
selling of goods or
services. .
the business into
different countries
to enhances their
operational
activities for
longer term gain.
The scope of
the business is
to be earned
profits and thus
can be pertained
through
providing
various benefits
to the
stakeholder.
Market share They carry the
less market share
in the country
regarding
managing the
business by itself.
The market share
of the business is
also very less and
thus not dealing in
any of the
activities.
In respect of
market share, they
carry the attractive
market share
through balancing
the activities
between the small
and big
enterprises.
The market
share of the
large
enterprises is
higher as they
share the
percentage of
the market
share to the
company in any
charity function
or any social

activities.
Profit margin Profit sharing of
the business is
small as they
itself decide the
amount of profits
distributes to
others (Evans and
et.al., 2017).
They gain profits
through sharing
the profits equally
or also gain
advantages
through settling
the losses equally
In respect of profit
sharing, they carry
the various plans
and policies to
their employees to
retain their interest
towards the
business (Aithal,
2016).
The profits of
the company
are to be
ascertained in
respect of
providing
various
monetary
benefits to the
employees and
also different
life saving plans
to secure the
employees
future.
Growth Growth of the
business is not so
high as they are
limited to the
particular area.
The growth of the
small business is
not so high as they
had to bring
innovative ideas to
enhances their
business.
The growth of the
business is higher
Growth of the
business is
higher but also
carry various
risk in
managing the
business.
Sustainability The chances of
sustainability of
the business is
also very low as
due to not
carrying the
renowned brand
They carry the
sustainable in the
country by
continuous
working in the
business.
also it results in
sustaining the
business in market
through adapting
the innovative
ideas to retain the
customer interest
Through this
manner, it
results in
sustaining the
business in
market for
longer time

image in market,
they are not
preferred by any
person.
in longer way. period.
Organization structure and functions:
It carries various types of organizational structure such as in case of hierarchical
structure, every person are group under certain supervision to guide them. In respect of matrix
structure, employees had to carry the relationship on the bases of dual format such as by
following the guidances of both the functional and products manger (Yang and Gabrielsson,
2017). The another structure is relating to the flat structure in which the owner itself had to
manage the work instead of appointing any supervisor to handle the matters of employees in
better way.
In such manner, Sainsbury uses the hierarchy structure to convey the thought and
company mission to their supervision and thus further guide the employees to work in the set
directions. Thus, by adapting this structure it results in managing the interest of the employees in
better way.
Illustration 1: Hierarchy structure
Source: Hierarchy structure, 2020
International Business structure
GLOBAL Business Multinational business Transational business

This is the type of the
international organizational
business which used to
preseant in more than one
conuntry and used to operate
the business in different or the
same way in all the country in
which they used to operate.
They do not used to
coordinate the product of
different nation.
This type of the business also
used to invest in the different
country but do not used to have
any sort of the coordinate
product of the company. All the
nation used to offer different
sort of the product. More
focused on adapting their
products and service to each
individual local market.
This organizational structure is
more complex organizational
structure, as they have invested
in the foreign operation of
diffrnet business and used to
have central corporate facility
but the decision making power
in the organization is enjoyed
by the individual foreign
market of the company.
Interrelationship between different organization functions:
In case of examining the interrelation between the marketing and finances, they both are
the pillars of the company. Marketing of the Sainsbury is necessary in respect of promoting the
business activities at global level while in case of finance, they make budgets for particular
activity and try to manage the funds of the company. Thus, through finance, it helps marketing
department to promote the business and through marketing, it helps finance department to earn
more profits.
In context of relationship between the marketing and human resources through the
procedure of marketing they mainly promote the vacancies in the company for the particular post
while in case of human resources, they get the qualified person to whom they carry the duty to
recruit and trained such person (Likoko and Kini, 2017). This helps Sainsbury to get qualified
person to retain at work place for longer time period.
The relationship between the finance department and information technology department
as IT helps in bringing new software in business and in case of finance department, they mainly
provide funds to the IT department to bring changes in their working procedure. In case of
Sainsbury, they both carry the relationship as in case of finances, through providing funds to UIT

for new software resulting in enhancing sales in business and in return IT increases the security
and speed of delivering products to the customer at faster way (Hamilton and Webster, 2018).
Through this manner, it results in bringing changes in the working style and also increases the
sales and growth of the business.
PART B
LO 3 Positive and negative factors carries influences in the business.
In the context of Sainsbury company, they are mainly affected through various external
factors which can be explained in the form of conducting PESTLE analysis.
 Political: In this, the external impact arises through various political norms which is
imposed by government in respect of changes in their norms and regulation. For example,
the major threat industry is facing is the Brexit. The positive impact of it will be that
Sainsbury can provide the high demand products and increase its sales (Oriesek and
Schwarz, 2016). But the negative impact of it will be that it will lead to increase in the
cost of import and export of material and products respectively which will eventually
lead to increase in the price of the product.
 Economic: This factor mainly faces issues in respect of managing the economy in terms
of interest rate or inflation in the rates. As every country had different perspective of
selling or purchasing the food, thus the impact arise regarding inflation in the prices of
the products and also the increase in the price of fuel cost. The positive impact of it will
be that Sainsbury will look for other methods which will help in taking advantage of it.
The negative impact of it will be the increase in the price of the products which may lead
to either decrease in sales or decrease in profit margin.
 Social: Due to changes in social trends in market, regarding demanding for the healthier
products and thus resulting in changing the market trends through adapting the culture
variances. The positive impact of this factor will be to take competitive advantage of this
change by bring products as per the demand before the competitors (Gebauer, Haldimann
and Saul, 2017). The negative impact of it will be that Sainsbury might have to change its
production process which may require it to incur additional expenses.
 Technological: The impact is raised through adapting the innovative technology in the
Sainsbury regarding preferring the digital platform in which the innovation is done on the

websites or advertisement procedure. As Sainsbury mainly deal the business online and
thus it results in facing lot of competitors through promoting their products or services.
The positive impact of this factor on Sainsbury is that it can expand it promotion
practices through digital platforms. The negative impact will be that it required to be
active 24*7 and should be prompt enough to reply to the customers queries and may
require a professional to handle it.
 Legal factor: The impact arises regarding facing strict government norms and in respect
of Sainsbury, they are facing changes in sugar tax rate which is the main brand products
of the Sainsbury. The positive impact of this strict rules lies that after getting approval
from the government, it results in enhancing the top most sales in market (Gorla,
Chiravuri and Chinta, 2017). The negative impact which lies are relating to stopping the
promotional activities of the Sainsbury which results in facing losses by not selling the
sugar in market.
 Environmental: This factor is mainly affected through changes in climatic condition or
reducing the impact of carbon footprints or also adapting the eco friendly products. The
positive impact of such factor stated on the bases of getting more demand of the products
of the Sainsbury which had adapted the eco friendly products in the market. They can
also attract the customer through promoting the less carbon footprints in the existing
products. The negative impact lies on the bases of not delivering the products within the
set time period. As due to changes in climatic condition, it results in not delivering the
products within the set time period. Thus, it affects the interest of the customer to retain
at particular services for longer way.
LO 4 Strength and weakness of the business
In case of identifying the SWOT analysis of the Sainsbury it is stated through examining
the internal strength and weakness with the opportunities and threats which helps in sustaining in
market for longer way (PESTLE Analysis of Sainsbury’s, 2020). It is stated as
SWOT analysis of Sainsbury
Strength
They carry the strong marketing in terms of
online promotion of the products. Thus, able to
reach to large number of customer through
Weakness
Sainsbury not initiate the planning to expand
the business as their stores are limited to the
particular areas. Due to facing inflation in the

providing flexibility to their customer to share
their views and thoughts after attaining the
products or services (Prajogo, 2016). For
example, with effective marketing it can attract
more customers and increase its customer base.
prices, they are facing declining in managing
the sales in the company. For instance,
inflation has caused the increase in price of the
products which has lead to the decrease in sales
and profits.
Opportunities
Due to facing increasing in demand of the
healthier products, it results in providing
opportunities to Sainsbury to bring changes in
their exiting products. Example: if the
Sainsbury introduces new healthy and organic
products in the market before its competitors it
will help in gaining competitive advantage.
Threats
In UK, lot of competitors are engraved which
are promoting the same products with high
discount rates in market. Thus, Sainsbury faces
the biggest threat in respect of retaining
customer towards the products. For example,
the other competitor is providing the same
electronic product but with reduced prices will
attract customers towards it which will
decrease its sales and customer base.
SWOT analysis of ASDA is:
Strength
ASDA deal in wider range of products which
mainly attract the customer through providing
the quality products or services in market
(ASDA SWOT Analysis, Competitors & USP,
2019). They are also awarded with the best
services in respective of other companies
products. For instance, ASDA provides
distinguished products which helps in grabbing
customers towards it.
Weakness
ASDA not use the effective promotion tool to
promote their products, this results in lack of
global presence of the company. By not facing
the strong competitors, they mainly restrict
themselves in expanding the business globally.
For example, the digital platforms are very
famous marketing tool and if ASDA does not
adopt it, it will be at big loss of losing
customers.
Opportunities
ASDA expand the business into different areas
such as in field of pharmacy, jewellery or any
other home equipment which is high in
Threats
Price war is the major threats for ASDA as
they are not providing any special discount in
respect of the supermarket stores in UK.

demand. In china, it carried the vast
opportunity for business to expand their
operation, thus ASDA carry the opportunity to
expand the business. For example, if ASDA
expands in the new untouched market, it will
provide it with number of opportunities and
give competitive advantage over its
competitors.
The changes in company policies is also the
major threats which is faced by ASDA
regarding dealing the business into different
countries. For example, if ASDA do not
provide low price products and heavy
discounts it will lead to loosing customers.
As per the discussion raised regarding conducting SWOT analysis of both the company
such as Sainsbury and ASDA, it is examined that Sainsbury carry the strong perspective in
respect of enhancing the business at global level. They are considered to be the good retailer
service provider in respect of other supermarket in UK. As ASDA lost the trust of the customer
regarding not using the accurate tag line which results in facing conflict in sustaining the
company reputation for longer way (Erasmus, Strydom and Rudansky-Kloppers, 2016). Thus, in
case of Sainsbury, they are mainly faces trust issues ion respect of not providing good discount
on particular products as comparison to other company. But after cross-checking the quality,
Sainsbury carried to be the best service providers in comparison to others. Thus, from above
discussion, it is clearly interpreted that Sainsbury internal management is stronger than others as
they deal in wider range of products and also the customer retained with the services which they
are providing. It further results in retaining large number of customer towards the business for
longer term growth.
Strength and weakness interlinked with the external factors
Strength: In this aspect, the strength of the Sainsbury are interlinked with the technology factor
through adapting the innovative technology to build the strong base for customer. As due to
changes in time, most of the customer are preferring the online services to order the products
online and also make payment through various modes. Through this manner, Sainsbury carries
the effective technology which helps the customer to get the speedy delivery of order and also
their information are secured in the systems of Sainsbury. For example, Sainsbury has effective
online shopping platform which helps customers to buy products online instead of looking for its
store.

Weakness: The weakness of the Sainsbury is linked with the economic factors which stared that
in respect of inflation in the prices result in not sustaining the growth of the business at certain
level. Thus, Sainsbury is lacking in managing the sales of the business as due to this perspective
it results in facing losses in not managing the business at higher level. As the stores of Sainsbury
are only limited to UK and thus, in respect of changes in polices of the government regarding
promoting for the particular products, it results in facing losses regarding not managing the sales
of the business in better way. For example, the increase in the cost of the product will lead to
increase in price of the product and will lead to decrease in sales.
CONCLUSION
From the above report, the study conclude the matters relating to the examining the
usefulness of business environment which is helpful in sustaining the business in market for
longer way. In this report, the matter concludes that in case of examining the profit, not for
profits and NGO companies, all carry the different role in achieving the goals and objectives in
business. It is also stated that every company had different scope, purpose, growth and sustaining
regarding managing the business activities in better way. It is necessary that the every
department had to work interlinked with each other so that they can manage the business
operation in right manner. In respect of conducting the PESTLE, it helps in determining the
external factors which results in causing impact upon the business. SWOT is carried for both the
Sainsbury and ASDA which helps in identifying the internal working and also carried the
comparison between the two.

REFERENCES
Books and Journals
Aithal, P. S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems. International Journal in Management and Social
Science. 4(1).
Erasmus, B., Strydom, J.W. and Rudansky-Kloppers, S. eds., 2016. Introduction to business
management. Oxford University Press Southern Africa.
Evans, S. and et.al., 2017. Business model innovation for sustainability: Towards a unified
perspective for creation of sustainable business models. Business Strategy and the
Environment. 26(5). pp.597-608.
Gebauer, H., Haldimann, M. and Saul, C. J., 2017. Competing in business-to-business sectors
through pay-per-use services. Journal of Service Management.
Gorla, N., Chiravuri, A. and Chinta, R., 2017. Business-to-business e-commerce adoption: An
empirical investigation of business factors. Information Systems Frontiers. 19(3). pp.645-
667.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Likoko, E. and Kini, J., 2017. Inclusive business—a business approach to development. Current
opinion in environmental sustainability. 24. pp.84-88.
Lu, S., 2017, March. Study on Business English Teaching. In 2017 7th International Conference
on Education, Management, Computer and Society (EMCS 2017). Atlantis Press.
Oriesek, D. F. and Schwarz, J.O., 2016. Business wargaming: securing corporate value.
Routledge.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics. 171.
pp.241-249.
Quinlan, C. and et.al., 2019. Business research methods. South Western Cengage.
Saleem, M. A., 2017. The impact of socio-economic factors on small business
success. Geografia-Malaysian Journal of society and space. 8(1).
Yang, M. and Gabrielsson, P., 2017. Entrepreneurial marketing of international high-tech
business-to-business new ventures: A decision-making process perspective. Industrial
Marketing Management. 64. pp.147-160.
Online
ASDA SWOT Analysis, Competitors & USP. 2019. Online. Available through:
<https://www.mbaskool.com/brandguide/lifestyle-and-retail/2040-asda.html>.
PESTLE Analysis of Sainsbury’s. 2020. Online. Available through:
<https://pestleanalysis.com/pestle-analysis-of-sainsburys/>.