Global Business Environment: SWOT Analysis, Impact of External Environment Drivers

This report discusses the global business environment, including a SWOT analysis and the impact of external environment drivers on Asda. It covers topics such as marketing and research & development.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
SWOT ANALYSIS.........................................................................................................................1
Overview................................................................................................................................1
Strengths.................................................................................................................................1
Weaknesses.............................................................................................................................1
Opportunities..........................................................................................................................2
Threats....................................................................................................................................2
EXAMINATION OF IMPACT OF EXTENRAL ENVIRONMENT DRIVERS..........................3
Marketing...............................................................................................................................3
Research & Development.......................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Global Business Environment covers all the aspects, elements and factors that are
surrounding an organisation and are directly or partially impacting and influencing decisions of
the company (Wetherly, 2014). Based on CW1, this report is related to Asda, which is one of the
most recognised retail organisations in the UK. The assignment would address interpretation of
information relevant to analysis of firm’s business environment, along with assessment of impact
of government on structure and operations of Asda. Moreover, the assignment also covers
understanding of impact of changes in business environment on the firm and its activities. This is
would be done through a SWOT analysis, as well as impact of key drivers of previous PESTLE
analysis impact areas such as Marketing and R&D.
SWOT ANALYSIS
Overview
SWOT Analysis is an appropriate tool to determine the internal strengths and weaknesses of
an organisation, along with its external opportunities and threats. It is a highly necessary
framework that allows the firm in judging its core competencies.
Hence, with respect to Asda, the SWOT analysis is performed below:
Strengths
 Product Diversification: One of the main strengths of Asda is associated with its product
diversification. As it could be interpreted through PESTLE analysis, the firm is currently
focusing upon expanding its product portfolio by including organic goods that are
currently in demand.
 High End Technological Usage: The company is using digital scanners, EFTS and
EPOS, which allows the firm to stock and syndicate the goods in an effective manner,
hence, decreasing the cost of inventory which automatically enhances revenue (Adekola
and Sergi, 2016).
Weaknesses
 Sales Decline: The firm is currently facing the issue of reduction in sales. The reason for
this is because the organisation has decreased flexibility which is causing disadvantage to
the firm to cope up with the ambiguity related to Brexit.
1

 Weak Positioning: The company has a very weak positioning of its product as compared
to its competitors like Sainsbury’s and Waitrose, which provide better quality, as well as
affordable pricing to the customers (Savrul, Incekara and Sener, 2014).
Opportunities
 Technological Advancements: This opportunity is associated with the advancements in
the technological front within the country. UK is one of the most prominent nations
where access of technology is quite evident. Moreover, as per the interpretation from
PESTLE analysis, the firm is already working towards using latest technology in its
stocking and syndicating functions. Hence, opportunities related to this include using
technologies like Artificial Intelligence and Automation technologies, within stores,
which would allow the company to provide more effective services to the customers.
 Rising Environmental Concerns: Another opportunity for Asda is that there is an
ongoing environmental concern at global level regarding the climate change issue which
is affecting the natural landscapes, as well as health of individuals at a global level.
Therefore, the company has this opportunity to mould its practices and products to
support the environmental practices within the country, which would help the firm in
gaining government’s support, as well as acquisition of customers within the
organisation.
Threats
 Brexit: One major threat that Asda is currently facing is related to the uncertainty
surrounding Brexit. This is because the regulations, policies and government rules are
changing rapidly and there is a high uncertainty within the political environment. It is a
threat to the firm to set up its long term strategies due to political instability.
 Unemployment: Another threat for Asda according to the PESTLE environment analysis
is regarding the high unemployment standards within the UK, which is reducing its sales
level quite drastically (Kasemsap, 2014).
2

EXAMINATION OF IMPACT OF EXTENRAL ENVIRONMENT
DRIVERS
All the key drivers mentioned in CW1 have a certain level of impact on all of Asda’s
functional areas. However, there are two prominent areas upon which these factors would have
major influences on. Thus, the impact on key drivers on these departments is elaborated below:
Marketing
The business environment surrounding Asda is drastically changing and according to the
key drivers, the firm is diversifying its product portfolio which has a major influence upon the
marketing unit of the company. The reason for this is because in order to sustain the competition
from companies like Waitrose and Sainsbury’s, Asda is required to cope with the changing
business environment and must mould its marketing methods to ensure competitive advantage
within the marketplace. For this purpose, the company could use digital and social media
marketing as its effective tools to communicate its organic offerings to the people. Moreover,
Search Engine Optimisation (SEO) must also be utilised by the organisation so that its popularity
amongst masses enhance appropriately and ensure effective acquisition and retention of
customers within the firm. In addition, this functional area would also be influenced by
economical factor, as strengthening marketing environment would allow Asda to generate
appropriate and effective jobs within the organisation to contribute towards solving the situation
(Tallman, Luo and Buckley, 2018).
Research & Development
Another functional department where the impact of these drivers could be showcased upon
is the R&D unit of the company. Factors such as social, technological and environmental are
influencing the firm to include better technologies to satisfy the criteria in an effective way. For
instance, as per the trend, Asda is planning to add organic products to its portfolio, for which
food manufacturing technologies are required to ensure better production of offerings. Moreover,
technological and environmental changes are influencing the company to adopt technologies that
could suit the organisational functions, as well as allow the organisation to appropriately reduce
the generation of CO2 emissions from their factories.
3

CONCLUSION
Thus, it is concluded from the report above that it is necessary to analyse business
environment of an organisation to determine internal and external factors impacting upon the
practices of the company. It is important to interpret information from the external environment
in order to determine their impact upon the organisation and its internal departments. Lastly,
SWOT analysis is an effective method in order to determine the competencies of the company,
along with determination of various strengths and weaknesses that the firm might face from the
external environment.
4

REFERENCES
Books and Journals
Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Kasemsap, K., 2014. The role of social networking in global business environments. In Impact of
emerging digital technologies on leadership in global business (pp. 183-201). IGI Global.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150. pp.35-
45.
Tallman, S., Luo, Y. and Buckley, P.J., 2018. Business models in global competition. Global
Strategy Journal. 8(4). pp.517-535.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford
University Press.
5