Business and Business Environment Report

This report analyzes the business environment, covering different types of organizations, their structures, sizes, and scopes. It examines the impact of micro and macro environmental factors on business operations, decision-making, and the attainment of objectives. The report also includes a critical analysis of organizational structures, SWOT analysis, and the interrelationship between different organizational functions. Desklib provides past papers and solved assignments for students.

Business and Business Environment

INTRODUCTION
Business is the organised effort of enterprise to supply goods and services to consumers.
It varies in sizes, types and structure, but all businesses have common purpose i.e. to earn profit.
Business Environment consists of all external and internal factors that affect a business and some
external factors are such that they can't be controlled (Aishah Kamarazaly and Phipps, 2013).
These factors are often called external constraints. Business environment includes both threats
and opportunities for businesses. It is the responsibility of an organisation to identity and
evaluate the environmental factors.
This overall report on business and its environment, will cover different types of public,
private and voluntary sectors and its purposes. Sizes and scope of range of organisation and
relationship between different organisational functions. Apart from it, this report will analyse the
impact of micro environment over business operations both positively and negatively,
interrelation of strengths and weaknesses with external macro environment. Further, it will cover
evaluation of types of organisational structures, its complexities and how micro and macro affect
business decision making.
P 1 explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures.
Cancer Research, is a cancer research and awareness charity in the UK with 40,000
volunteers. The company was established on 4 February 2002 by Isle of Man, by the fusion of
The Cancer Research Campaign and Imperial Cancer Research Fund. The main aim of the
organisation is to reduce the amount of deaths which occur due to cancer and it also raises funds
for the organisation. This charity chain sells second hand goods such as; books, records to raise
money and clothing. It also provides various information about cancer and run campaigns. They
aim to raise diseases awareness and its cause to public policy. The public provides complete fund
to this organisation. It raises funds through; legacies, donations, corporate partnership, events
and community fundraising (Aterido, Hallward-Driemeier and Pagés, 2011). The main purpose
of the Cancer Research is to reduce cancer deaths, conduct research into the preventions,
diagnosis and treatment of diseases.
ASDA stores Limited company, in West Yorkshire is supermarket retailer, and was
founded in 1965. Asda became the American retail giant subsidiary, i.e. Walmart in 1999 and
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ASDA was one of the 2nd largest supermarket chain between 2003 and 2014 and it is currently 3rd
behind TESCO and Sainsbury's. Apart from this, the organisation also deals in other services like
finance and provides mobile phones which make use of existing EE network. Marketing
promotions of the company are based on price and since 2015, it has encouraged itself under the
slogan “Save Money, Live Better”. The company offers frozen foods, health and beauty
products, groceries, home and clothing, kids products etc. ASDA's main purpose is 'To make
affordable its products and services for everyone', it's values are to give respect to individuals,
service to their customers and seek for excellence. Private limited company i.e. ASDA store
liabilty is limited by shares. Furthermore, their share cannot be traded publicly which determines
that they cannot list their shares on the stock exchange.
Marks & Spencer, is a multinational retailer company in London. The company sells
clothes, home ware, and luxury food products. The organisation was established in 1884 and was
founded by Michael Marks and Thomas Spencer. The company also sells corn flakes which it
started in 2008. The company also had 47 stores across Canada and it has 980 stores across the
UK. It also values customer's loyalty and confidence (Bryman and Bell, 2015). The purpose of
Marks & Spencer is to cuts its technology bill by supplier's reduction and focusing its IT
business on Tata Consultancy services as partner of principal technology. It also aims at serving
as a general store that caters for the middle to lower-upper class. Public limited company like
Marks & Spencer is a limited liability company and they sell their share freely on the stock
exchange. Public limited company cannot trade its shares without obtaining a trading certificate
from Companies House in the UK and must include public limited in their name.
P 2 explain the size and scope of a range of different types of organisations
Voluntary sector
Size of cancer research :- cancer research prevents, diagnose and treat the cancer
patients, this has helped to save millions of lives. It has been seen that over the past 40 years the
company has doubled survivals, research has made great progress. Its long term investment in art
facilities has helped to make a successful network of research at 95 institutions and more than 42
towns and cities across the UK. Sum of 195 employees were paid salaries of 60,000 euro or
more, up from 189 in the previous year.
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Scope of cancer research :- the company will speed up its progress to see 3 quarters of
cancer people surviving the disease by 2034 (Carroll and Buchholtz, 2014.). The research
strategy which it set up in 2014, showed how they will attain their ambitions through a
significant rise in research in precedence areas. They need to create a strong community of
highly trained, advanced, world-class cancer researchers to support cancer research in the long
run. Investment in the areas of diagnosis has been small, both in the UK and globally. There is
very limited activity from industry due to very high investment risk involved.
Private sector
Size of ASDA :- the following table shows the amount of ASDA store in the UK as of
2017 and one of the major supermarket brands and a subsidiary retail chain Walmart. There were
630 Asda retail stores in the UK in 2017, where Asda superstores were 340.
Number of stores
Retail units 630
superstores 340
supermarkets 205
Asda living 35
Petrol fuelling stations 20
Scope of ASDA :- there is good scope for development within ASDA from all parts of
the business. It has huge scope in the market as compare to other competitors. As it focuses on
the quality and productivity of product and services and always meet demand of customers. Its
supermarket is situated in commercial area where every one can easily go and buy it services and
item.
Public sector
Size of Marks & Spencer :- Marks and Spencer is one of the most famous retailer in the
market which have 979 stores in the several countries. It has more than 84939 employees who
continuously making efforts for improve profitability. It specialises in the selling of cloths, home
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ware products and luxury food items. In the 22 may 2018, it was confirmed that over 100 stores
will have in 2022 (Chavis, Klapper and Love, 2010).
Scope- Marks and Spencer have huge scope as it delivers products and services with
high quality in the market. It concentrates on the actual demand of customer through which it has
effective position in the market. It has competitive advantage related to extreme quality of serves
which no other retailer delivers.
M 1 analyse how the structure, size and scope of different organisations help in attainment of the
objectives.
Marks and Spencer have huge scope as it delivers high quality of product and services in
the market. The main focus is on actual demand of customer through which it has effective
position in the market. It enables company to achieve goals and objectives such as gaining
customers trust in their product. It has competitive advantage related to extreme quality of serves
which no other retailer delivers.
P 3 relationship between different organisational functions
ASDA company undertake 6 key functions to produce and sell their products and
services. Functions are; finance, design and manufacture, sales and merchandising, human
resource, administration, research and development. Each of its operations work together so that
the whole company has similar objectives as well as aims (Osterwalder and Pigneur, 2010).
Operating management :- Asda marketing department work closely with the department
of production to make sure that; adequate research and development has been planned which will
satisfy customer's current as well as future needs, the product can be produce based on the
attribute and design features set by the customer. Marketers wish to bring products to the market
in a short period as much possible to make sure competitive advantage, on the other hand
production will check and create products in such a way to ensure that they do not have to repair
or replace imperfect or faulty products and that they fulfil health and safety needs.
Finance department :- the financial department contains brief about the entire
organisation to ensure that the business works within its financial capabilities. Here the
marketing department works along with the finance department to ensure that there is an enough
budget to fulfil the needs for distribution, research and promotion. The marketing department
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focuses on sales volume and creating their share in the market, while the financial department
more concentrate on cash flows (Griffin, and Pustay, 2012).
Human resource management :- the HRM also works with marketing department to make
sure that proper ability and personnel levels are in right place to; explore and create new ideas,
meet the target of manufacturing, and creating competent and aspiring sales team (Dragoi, Rosu
and Draghici, 2013). This department contains many training and recruitment demands from
across the company. This helps them to balance the obligations to marketing with those to other
departments.
Sales and marketing functions :- the marketing department recognises customer's needs to
make strategy and design product which will satisfy their needs. On the other hand sales are
responsible for persuading the customer to purchase the product.
M 2 advantages and disadvantages of interrelationships between organisational functions and its
impact on structure.
Advantages of functional organisation
 Specialisation:- it makes sure to have a greater labour division and allow the business to
take benefits of specialisation of functions.
 Workers skilfulness has enhanced, as they have to work for a constricted number of
activities and they get operating instructions from specialists.
 It makes sure the detachment of functions of both mental and physical. As a result this
guarantee better operational control of different departments. Scope for expansion is offered by organisational functions as compared to line
organisation. It does not face any issue related with few line manager's limited
capabilities
disadvantages of functional organisation
 The process of decision making becomes slower and more official.
 Under this, there is division of work into parts which results in difficulty in coordination
between the functioning of different parts.
 Adaptation to changes in the surroundings is very slow.
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D 1 a critical analysis of the complexities of types of business structures
Complexity occurs and expand when interdependence of the components within the
system becomes relevant. There are also certain regulations that are applied to these elements.
The main difficulty faced by matrix is that it is determined as just an organisational structure. If
there has been a set up of matrix structure, it is unlikely to work. Matrix management is such that
it cannot be command and control. The problem in a matrix structure is inbuilt through which
managers are pulled in several directions at a time. A divisional structure also contains some
weaknesses. Divisional structure also brings dissociation that results into incompatibilities.
Hence, sometimes one division act to weaken another.
P 4 identify the positive and negative impact of macro environment over business operations
All organisations must identify, evaluate and monitor macro environmental forces and
assess their present and future impact on their business operations. Macro environment consist of
a wide range of factors affect not only company but also other workings in the micro
environment. These are consisted of political, economical, social, technological, legal,
environmental (Kodolitsch, Bernhardt and Detter, 2015.).
 Political:- a political environment develops, because democratic government have
to prosecute re-election every few years. Increase or decrease in tax rate, foreign
trade regulations, employment laws etc. are example of political environment.
This decision will directly affect business, as government rules may increase tax
rates. Increase in tax rate will lead to company's loss and visa versa.
 Economical:- rise in the inflation rate of an economy would impact company's
pricing strategy. Moreover, it will affect customer's purchasing power and also
change in demand and supply for that economy. Decrease in foreign exchange
rate, interest rate etc., leads to lower prices of company's products and services
and will result in higher purchase.
 Social factors :- trends, population, demographic etc. are examples of social
factors which greatly affect the business environment. For example, buying trends
in US, where is high demand during holidays.
 Technological:- innovation of new technology also affect the business operations
both positively and negatively.
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 Legal :- legal factors also impact on the working of the business both positively
and negatively. For example, consumer and labour laws, safety measures etc. are
taken into consideration.
 Environmental :- this element of PESTLE is very crucial for some industries such
as; farming, tourism, agricultural etc. These factors are not only limited to but
include weather, climate or global changes in environment (PESTLE Analysis
2018).
M 3 PESTEL model to support macro environment within an organisation
In order to sustain in the business environment for long time it is very important to
analyse the business environment. There are various factors consist with business environment
such as political, social, legal, environmental, technological etc. These all factors directly and
indirectly affect organisation strategy and policies (Aishah Kamarazaly, Mbachu and Phipps,
2013). Thus, it is very important for corporation to consider these all factors in the business
decision making. With help of Pestle analysis, corporation understand the factors and its several
impacts upon business operation and activities so as it can develop effective strategies according
to business objective. It helps to company in overcome negative impact of various elements of
business environment.
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Illu
stration 1: PESTLE analysis

P 5 internal and external analysis of organisation Internal analysis of Marks & Spencer
Strengths :- Marks & Spencer deals in superior and quality products. Good employee's
relationship as its they are treated better and company pay them more than sales assistants in
other companies. It is a profitable company, apart from this it has larger targeted market of many
retail sectors.
Weaknesses :- as compared with Marks & Spencer's competitors who were using
overseas suppliers for lower cost products, the company was dependent on suppliers from
British. In M&S advertising has been miserable and they neither provide sales to their buyers
during Christmas and Easter period.
Opportunities :- Marks & Spencer must enter into the e- business in an effective way for
keeping themselves in line with competitors. It must focus on clothing market segments by
keeping in mind their age.
Threads :- Marks & Spencer has tough competition like; Oasis, Top Shop, Zara & Tesco.
Expansion of the company internationally has lead to less successful for M&S.
Internal analysis of ASDA
Strengths
 Asda offers a broad range of products and services also including the finance related
services.
 It is much known for its marketing campaigns (Welford, 2013.).
Weaknesses
 Its global existence is very limited when compared to other organisations.
 Company's ability to sell prices have forced their entry in few countries as the country
contains threat of competition.
Opportunities
 Offer their products and services in other developing countries.
 Grow their business in some other areas like opticians, jewellery etc.
threats
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 there has been a pressure to maintain low prices
 change in policies of central government
P 6 explain how strengths and weaknesses interrelate with external macro factors
The strengths of Marks & Spencer has excellent and quality products as it uses new and
innovative technologies in their manufacturings. Economical factor i.e. rise in the inflation rate
of an economy would impact company's pricing strategy and by keeping this in mind company
adopt new pricing strategies. Its weaknesses are poor advertising and they neither offer sales to
their buyers during Christmas and Easter period. Legal factors also have both positive and
negative impact on the working of the business as a result they were highly dependent on
suppliers from British as compared with its rivals who were using beyond the sea suppliers for
lower cost products.
M 4 apply SWOT analysis and justify how they influence decision making
SWOT analysis model helps to organisation in providing information regarding
business strength, weakness, opportunity and threats. With help of this analysis, organisation can
easily identify its strength, competencies and weak point through which it can develop its
effective strategy. In addition to this, corporation can take the effective business decision with
help of SWOT analysis (Trkman, 2010.). Business decision can take with help of the SWOT
analysis as if organisation assess and analyse business effectively then it becomes easily to take
effective decision. For example, cited venture have effective strength of utilisation of advanced
technology and equipments and weakness is unskilled workforce. On the basis of this
information, organisation can take the decision for employees learning and training so as they ca
improve their existing performance and skill (SWOT Analysis 2018).
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D 2 evaluate the impacts of both micro and macro factors upon business objectives and decision
making.
Micro and macro factors of the business environment helps to organisation in taking
business decision in effective manner. In the macro business environment includes political,
social, cultural legal, environmental, technological. On the other hand in the micro business
environment includes suppliers, employees, government, customer, investor etc. While
management takes any decision regarding business and set business objective then it is very
important to consider various factor macro and micro factors because these directly and
indirectly affect business objective and decision.
Conclusion
The report concluded that Business Environment consists of all external and internal
factors that affect a business and some external factors are such that they can't be controlled.
Cancer research also provides various information about cancer and run campaigns. They aim to
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Illustration 2: SWOT analysis

raise awareness of the diseases and influencing public policy. Further it concluded that Marks
and Spencer have huge scope as it delivers high quality of product and services in the market. It
concentrates on the actual demand of customer through which it has effective position in the
market. Micro and macro factors of the business environment helps to organisation in taking
business decision in effective manner.
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concepts/marketing-and-strategy-terms/2353-swot-analysis.html>.
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