ASDA Company Micro and Macro Analysis

The provided document offers an in-depth examination of ASDA company's micro and macro factors. The report emphasizes the significance of organizational functions in achieving business objectives. It also discusses various external factors that influence a company's operations, including economic, social, political, technological, environmental, and legal aspects.

Higher Nationals
AssignmentBrief – BTEC (RQF)
HigherNationalDiplomain Business
StudentName Bejenari Marcel ID Marcel.HE10016
UnitNumberandTitle Unit 1 Business and The Business Environment
AcademicYear 2019/2020 Cohort April 20 Te
r
1
UnitLeader Assessor Rajini Chandrashekar
AssignmentTitle Macro Environmental Influence
IssueDate 27/04/20
SubmissionStartDate (Formative) 15/06/20
Submission Summative 27/06/20
IV Name Alfred Agyeman
IV Date 25/04/2020
Learners Declaration: I certify that the work submitted for this unit is my own and the research sources are fully
acknowledged.
Learners Name: Bejenari Marcel Date: 27/06/2020
1

Contents
Introduction................................................................................................................................3
LO1............................................................................................................................................4
P1 Explain different types of organisations legal structures..................................................4
P2 Explain the size and scope of a range of different types of organisations........................6
M1 Analyze how the structure, size, and scope of different organisations link to the
business objectives and product and services....................................................................9
LO2..........................................................................................................................................10
P3 Explain the relationship between different organisational functions and their linking
with the structure and objectives..........................................................................................10
M2 Analyze the advantages and disadvantages of interrelationships between
organisational functions and the impact that can have upon organisational structure.....14
LO3..........................................................................................................................................15
P4 Identify the positive and negative impacts the macro environment has upon business
operations.............................................................................................................................15
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro-
environment within ASDA company...............................................................................17
LO4..........................................................................................................................................18
P5 Conduct internal and external analysis of ASDA company to identify strengths and
weaknesses...........................................................................................................................18
P6 Explain how strengths and weaknesses interrelate with external macro factors............20
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence
decision- making..............................................................................................................21
Conclusion................................................................................................................................22
Reference..................................................................................................................................23
2

Introduction
The word business refers to all kind of business. It can be large, medium, and small. The UK
business market consists of different types of business. These are the for-profit business, not
for profit business etc. This report presents the different types and purposes of business. The
business has three sectors. Among these private sectors has a great contribution to the UK
economy. The different functions of the organisation carried out the objectives. The quick
goal attainment of the business depends on the good relationship of the business functions.
This business report also illustrates the impact of the internal and external business
environment. The strength of the business works as a shield for the company to face the
external environment effects. As an intern officer of the ASDA, UK company the analysis of
the business environment is given in this report.
3

LO1
P1 Explain different types of organisations legal structures.
There are different types and purposes of business are available. The details about the types
of business are elucidated below:
Types of business
For-profit business: This is the most common types of business. The organisation that runs
for profit is known as a for-profit business (jeff madura., 2018). All the profit-making
company generate profits for its shareholders and employees. The economy gets advantages
from this kind of business. In the UK most of the company run for profit. ASDA is a retail
company that runs for profit. The profit-making company can be small, medium, and large.
ASDA creates a vast amount of employment. It shifts the economic burden. The government
also earn huge tax revenue form this kind of business.
Not-for-profit business: Government-owned enterprise can be illustrated as not a for-profit
business. This kind of business runs for public welfare. Most of the Not for profit
organisation owned by the government, not by any individuals. The core of this business is
public welfare. The size of the public business is very gigantic. In the UK NHS, Railway, etc.
are the public business that has no motive to earn the profit.
Different sectors of business and its legal structures:
There are different sectors of business. Each sector of the economy contains several other
types of business. These are given below:
Private sector: Private sector includes the business owned by the individual and private
body. This business controlled and managed by the individual and groups. Majority of the
business comes from this sector. Different private sector business is given below:
 Sole trader: Sole trader business owned and formed by a single person (Epstein,
2017). He/she is the all in all of the business. All capital is provided by the owner.
The tiny bakery, Hair and Graces saloon is the sole trader business in the UK. The
formation of this two business is very easy. Only the owner of the business provides
the capital and enjoy the profit. No legal action is required to form the business. The
objectives of this business are not officially structured. They just provide service and
earn money.
4

 Partnership: When the business formed under the association of two or more people
it is called partnership business. For eradicating the problems of a sole trader business
partnership business is formed. The gist of these business contracts. Without the
contract, this business cannot be formed. NotOnThehighStreet.com, Carphone
Wearhouse is the example of successful partnership business in the UK. The owners
of this business share their profit according to the contract. Both partners inject capital
into the business. unlimited liability is the main problem of this partnership business.
 Private limited company: It is a company business. Company business has a
separate business entity. Legal registration is required to form this business.
Generally, the private limited company are small. A private limited company is often
managed by family members. Brakes is the food distribution company in the UK. It is
a private limited company. Shareholders have limited liability. It is the advantage of
this business. The business will continue even if the owner died.
 Public limited company: This is the large size of business in the private sector. The
PLC required permission to form the stock exchange for their initial offerings
(Littlejohn, 2016). This business requires lots of legal papers. Until manage these
papers they cannot start their business. ASDA is the large public limited business in
the UK. They collect capital from the public through IPO. The huge amount of money
can be collected through public offerings. The production cost of ASDA become low
because they produce a large quantity of product. The business formation is very
expensive and difficult. It requires lots of legal actions.
Public sector: Public sector businesses are accountable to the central or local government.
The objectives of this sector business are public welfare. In the UK NHS, road, and transport,
the defense is the example of public sector business. London north stern railway company is a
public company. The main motive of this business is a public welfare and ensure the easy and
comfortable transportation service for the London people.
Voluntary sector: The business that is formed and managed by those people who are
willingly ready to rendered service for free (Hussey and Perrin, 2019). They work for a
humanitarian and altruistic purpose. The voluntary organisation works for positive change in
society. Oxfam is a large voluntary organisation in the UK. They work on human rights and
fight against poverty.
5

P2 Explain the size and scope of a range of different types of organisations.
Based on the size and scope of business it can be segmented variously. Based on the size
organisations can be segmented into micro, small, medium, and large. A brief discussion of
this organisation is given below:
Micro firm: The micro organisation has 1-9 employees in the firm. All the operation of these
firm carries out by these small number of employees. The objectives of the micro business
are the expansion of the business. Gathering family members and friends is also the
objectives of this micro business. Hair and Graces saloon is the micro-business in the UK.
Small firm: A small firm has 10-49 employees. It is an independent business with limited
size. The objectives of this business are generating new idea and creation of the job.
Medium-firm: Medium size firm has 50-249 employees. Increase of sales is the prime
objectives of this business and serving the niche market. Oxfam international is the medium
size business in the UK.
Large firm: The name refers something big. The large size firm contains employee more
than 250 (Antonelli and Scellato, 2016). The large firm always wants to dominate the
business market. Growth, profitability is the common objectives of these large firms. ASDA
is a large firm in the UK. It is a multinational retail company.
The ins and outs of these three types of company are elucidated below:
Particulars Micro/Small Medium Large
Organisation Hair and Graces saloon Oxfam international ASDA, PLC
Goal and
objectives
Hair and Graces is the saloon
business. It is small and very
few members manage this
business. In the local street of
Birmingham, this saloon
operates its business. The
goals and objectives of this
business are gathering more
family members and friends.
Make satisfied the local
Oxfam international is the
Medium size charity
business (Oxfam
International, 2020). The
goal of this organisation
is increasing the service
and working for the
welfare of society. Their
main goal is to decrease
the poverty rate.
ASDA is a large
multinational company
(Asda. 2020). They aim
to provide good quality
of product at a cheap
price. The UK retail
industry is very
competitive. Without
customer satisfaction, it
is impossible to survive
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customer and compete
successfully in the local
market is the goal of this
business.
in the market.
Market share Small firms operate their
business in the local area. So,
their market share is very tiny.
But if we calculate the specific
local area then their market
share is large. Hair and Graces
operate their business in
Birmingham city. They
successfully capture the
market of Birmingham.
Oxfam is one of the large
charities in the world.
They successfully build
their brand name. In the
time of trouble, they
standing beside the
people. In every shaper of
the society they work.
People donate them
without any doubt. They
have a large market share
not only in the UK but
also all over the world.
The market share of the
Oxfam international is
7.25% of the total UK
market.
The UK retail market is
very competitive.
15.4% of the market
successfully captured
by the ASDA PLC.
ASDA provides a verity
of product. This attracts
more customer and
increases its market
share.
Products and
service
Hair and Graces offer many
services for the Birmingham
people. These are the Waxing,
pedicures, Hairdressing, Gel
nails etc. They have many
more other services.
Oxfam offer tons of
services for the people
and customer. They run a
different campaign for
poor people. They are the
largest second-hand
bookseller in England.
They have clothing and
shoe bank in the street of
England. They send relief
supplier for the affected
country.
ASDA has a different
product and service for
their customer. Their
product portfolio is very
strong. ASDA
supermarket, petrol,
living, George, etc. are
the product of ASDA
company.
Legal
structures
Its legal structure is the sole
trader business. It lies down in
the Small business.
Oxfam is a Non-
governmental
organisation. It is a
ASDA is the public
limited company.
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voluntary organisation.
Stakeholders
size
Hair and Graces is a small
service provider company.
Their stakeholders’ size is
tiny. Customers, employee are
the key stakeholders of this
small business.
Oxfam international
operates their business in
almost all the country.
Their stakeholders are the
doner, government,
different local agencies,
affected people,
volunteers etc.
The size of the
stakeholders is very
large for the ASDA
company. They must
think about every
stakeholder.
Shareholders, owner,
investors, employee,
customer, society are
the main stakeholders
of the ASDA plc.
Number of
employees
Hair and Graces saloon has
only 20 employees in their
shop.
Oxfam has over 5000
employees globally and
15000 volunteers.
ASDA has more than
250000 employees.
Functions The business function of this
Saloon is very small. They
have very few departments.
Oxfam International has
so many business
functions. They are an
international company.
ASDA has many
functions to carry out
their business.
Marketing, HRM,
operation etc. are the
basic business function
of ASDA.
Topic of Comparison Hair and Graces saloon Oxfam International ASDA Plc
Size Small Medium Large
Legal Types Private company Voluntary Public limited
Scope National International British Multinational
Company
This successfully describes the size and scope of these businesses. Each business has a
different size and scope. The scope of the business is depending on the size. The organisation
like ASDA is very large and have a very good scope.
8

M1 Analyze how the structure, size, and scope of different organisations link to the
business objectives and product and services.
ASDA is a large organisation. As a result, they have large objectives. They earn over 25
million euro each year. It is visible that the size of the business has a direct relation with the
organisational objectives. Business structure is the strength of the organisation to set a big
target (David and David, 2016). If the ASDA company found a skilled employee in their
structure, they can achieve any goal. More than 165000 employees work in the ASDA
company. Their business structure is very strong. The scope is very large of ASDA company.
They can invest a large sum of money in the profitable sector. ASDA has 631 stores in
different counties. They are a giant company. ASDA offer product for both national and
international market. Not all the product requires a complex structure.
9

LO2
P3 Explain the relationship between different organisational functions and
their limning with the structure and objectives.
Not only in a large organisation but also small organisations consist of several functions.
These functions carry out business activities successfully (Rozman, 2019). Each business
function refers to a department. In the ASDA company, there are many business functions.
Without a good relationship among these functions, it cannot possible to achieve
organisational goals. Different business functions of the ASDA company are given below:
Production function: Production function of the ASDA company works for ensuring the
quality of the product at the right time for the company (ASDA support for farmers, 2015).
According to the given information form, the marketing department production function
prepares the product. The profitability of the ASDA company largely depends on the
production function. This department can reduce the cost of the product through efficient
management. Without collaboration with the marketing function production department
cannot successfully attain its goals.
Marketing function: This is the most significant business function of ASDA company. The
customer needs and want is changing very rapidly. Marketing department deals the customer
directly. According to the need and want of the customer marketing function develop the
product (Kotler et al., 2019). Overall market planning is done by this function.
Accounting and finance function: This department prepares a financial statement of the
ASDA company. These statements help the management of the ASDA company to take the
right decision. Without a good relationship among the other business function, this
accounting and finance department can’t collect adequate information for preparing the
financial reports.
R&D function: This department of ASDA works for developing a product for the customer.
Without taking help from the marketing department they can’t develop the right product for
the market. As a result, their effort goes in vain. Good relationship among the department
helps the business to achieve its objectives. The marketing department provides the right
information about customer need and want.
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Human resource: This HR function deals with human resource in the organisation. ASDA
has more than 2.5 lac employee. Without a good relationship between the functions, this
department cannot carry out its objectives.
Organisational structure
Organisational structure refers to the systemic way of allocating, coordinating and
supervising duties for achieving the organisational goals (Graubner, 2019). There are
different types of business structure are available. Some of these are given below:
Functional structure: When the activities of the organisation divided on the group based
specific knowledge and skills it is called a functional organisational structure. Like marketing
function, HRM function etc. Each business function is good at their functional job.
Source: (Graubner, 2019)
11

Divisional Structure: Divisional structure refers to that when the company divide its
operation based on the demographic region. Like ASDA company operates its business in
many countries. They divide each region like USA region. Asian region.
Source: (Rozman, 2019).
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Matrix structure: This is the hybrid business structure. The employee may report two
bosses. In the natural work, they may report to their boss. But when they work in a project,
they need to report to the project manager as well as their boss (Shull, 2017).
Source: (Graubner, 2019)
The organisational function of the ASDA company is given below:
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Source: http://www.markedbyteachers.com/gcse/business-studies/job-roles-within-asda-1. html
ASDA company use the functional business structure. ASDA company divides it all
operation into a functional way. One manager oversees the total function. Marketing function
works for achieving its objectives. Like this, all the function works for its functional goals.
This business structure help to achieve the goals of the organisation. Like each function is
specialized in their functional activity. It will increase the productivity of the ASDA
company.
14

M2 Analyze the advantages and disadvantages of interrelationships between
organisational functions and the impact that can have upon organisational structure.
Good relationship among the organisational function is very important. This good relation
increases the speed of the organisation. The advantage and disadvantage are given below:
Advantages: A strong culture is created in the organisation if a good relationship exists. The
employee can take help from each other. The productivity of the organisation will increase.
Proper information circulation is possible if a good relationship exists among the functions
(Gorelnik, 2018). Accounting department requires information’s form of different business
functions. A good relationship makes this task so much easier.
Disadvantages: Functional competition is harmful to the company. It will be difficult to keep
secret confidential information for a good functional relationship. Good relationship
decreases the formal behaviour of the employee.
15

LO3
P4 Identify the positive and negative impacts the macro environment has
upon business operations.
PESTEL analysis is the tools that help to evaluate the impact of external environment on the
business. It is a framework of strategic planning. PESTLE analysis of the ASDA company is
given below:
Political factor: Political factors refers to the employment legislation, consumer right, tax,
government life span etc (Worthington et al., 2018). These factors have a significant impact
on the business. Like the government of the UK decide that they will increase the tax rate.
This decision has an impact on the ASDA company.
 Negative impact: The cost of ASDA company will increase if the government
increase the tax rate.
 Positive impact: Political factor also has a positive impact on the business. Like in
this pandemic time government of UK give subsidy to the businessman of the
country. This kind of assistance helps the businessman to promote the business.
Economic factor: While managing business ASDA company have to consider the pay level,
labour supply and demand, bank rate, foreign currency rate, export-import etc. (Business
environment, 2020). These are the economic factor and has a direct impact on the ASDA
company. These factors create both positive and negative impact on the business.
 Positive factor: Like soft export-import approaches alleviate the burden of the
company.
 Negative factor: on the other hand, increasing the pay level create a direct impact on
the ASDA company.
Social factor: Social factors refers to the purchasing choice, celebrity following, ageing
population etc.
 Positive impact: The increasing population has a positive impact on the company.
Like the product for a newborn baby is highly demanded the market.
 Negative factor: On the other hand, people become more conscious of product
choice.
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Technological factor: In this modern era of business most the business, directly and
indirectly depends on the technology.
 Positive impact: Rapid development of technology decreases the production cost
 Negative impact: Advancement of technology increases the competition in the
market. This is the positive and negative impact of the technological factor.
Environmental factor: Environmental factor refers to the carbon footprint, pollution, waste,
organic food etc (Mercer, 2016). ASDA company sells millions of products each day.
 Positive impact: In the rainy season ASDA company sales huge quantity of umbrella.
 Negative impact: It requires intensive transportation facility. This transportation
emits a large amount of carbon that creates a negative impact. Government and many
other environmentalist forces organisation to reduce the carbon footprint.
Legal factor: ASDA operates its business in many countries of the world. Different country
has different laws and regulations. For fairly conducting the business ASDA has to main
these laws.
 Negative impact: This legal factor sometimes forces the company to change its
strategic planning. It increases the negative impact on the ASDA company.
 Positive impact: But these legal factors have a positive impact. Government give the
tax-free opportunity to the newly born business.
17

M3 Apply appropriately the PESTLE model to support a detailed analysis of the
macro-environment within ASDA company.
Positive impact: Macro environment has a positive impact on the ASDA company. In this
time of the pandemic. Government ensure an adequate subsidy for the business organisation.
The UK has a flexible export-import policy. This policy has a positive impact on the ASDA
company. Technological factor reduces the cost of the product but increases the competition.
This competition bound the company to cut the price of the product (Najda and Wach, 2016).
As a result, the profit of the organisation is decreased. UK economy is strong. People have
god disposable income. It increases the sales of the company.
Negative impact: Political unrest create a barrier in the business function. Frequent changes
in the financial policy reduce the amount of disposable income. It harms the ASDA
Company. The distribution process of the ASDA company pollutes the air. This carbon
footprint is a barrier to their business operation.
18

LO4
P5 Conduct internal and external analysis of ASDA company to identify
strengths and weaknesses.
For finding the strength and weakness of any organisation SWOT analysis tools is the best
application. Here the SWOT analysis of the ASDA company and Tesco company is given
below:
SWOT analysis of ASDA company
Strength:
 ASDA company has a great brand
image in the UK. They offer large
varieties of product. It attracts the
customers most.
 ASDA has 25 distribution point in the
UK. This distribution point illustrates
the strength of the ASDA company.
 ASDA has online shopping service and
home delivery service.
 The R&D of the ASDA company is
very strong.
 This makes the company more
favourable to the customer.
 They have different types of
supermarket in the UK.
Weakness:
 The major weakness of the ASDA
company is to limited access in the
global market.
 Their marketing campaign is not so
much flawless. They use the false
story in the campaign.
 ASDA has several controversies
about its product.
 Like they sale horse meat in 2013.
This scandal made a bad impact on
their company.
Opportunity:
 ASDA can easily expand their
market into the other country of the
world.
 They can easily acquis small
company and expand the company.
 People feel more convenient to
purchase a product from the online
Threats:
 The UK retail market is very
competitive.
 This intensive price war is the prime
threats for the ASDA company.
 The changing policy of the
government is another threat to the
19

So the expanding business in social
media will be the best opportunity.
retail company.
 Due to technological advancement
and competition, regular price cut
strategy are threats for the company.
SWOT analysis of the Tesco company:
Strength:
 Tesco is a very diversified company.
 They have different other section of
the business. Tesco is the market
leader in the UK in the retail
industry.
 They have a 28.1% market share in
the UK.
 Tesco has its mobile, bank, fuel etc.
 They have a diversified market
strategy.
 Product price is low and quality is
moderate that seeks lots of
customers.
Weakness:
 Tesco has the fraudulent case in
2017 for misrepresenting of profit
statement.
 The main concentration of the Tesco
company is in North America.
Opportunity:
 Tesco can expand their market in
different another country.
 They have very good access to the
technology sector.
 They can easily expand their market
on social media.
 As they have a large market share in
Threats:
 Political turmoil is big threats to the
company.
 Frequent change in the government
policy create threats for the Tesco
company.
20

the UK people have trust in them.
21

P6 Explain how strengths and weaknesses interrelate with external macro
factors.
Strength and weakness have a direct relationship with macro factors. The Strength of ASDA
company helps them to face the Macro challenges. The interrelation of the strength and
weakness with the external macro factor of ASDA company is illustrated below:
Political factor: political factors refers to the employment legislation, consumer right, tax,
government life span etc. (Parker and Martin, 2014). These factors have a significant impact
on the ASDA company. ASDA company is very affluent. They have good resources and
brand image. If the government increase the tax rate it cannot create so much burden. ASDA
can pay high tax to the government.
Economic factor: While managing business ASDA Company have to consider the pay
level, labor supply and demand, bank rate, foreign currency rate, export-import etc. These are
the economic factor and has a direct impact on the ASDA company. Due increase demand
ASDA company can easily increase their production. They have that resources and
technology that can assist to produce a large quantity of product.
Social factors: Social factors refer to the purchasing choice, celebrity following, ageing
population etc. The increasing population has a positive impact on the ASDA company. The
R&D function is very strong. ASDA can easily develop a baby product.
Technological factor: Technology require a huge investment. ASDA is one of the famous
retail shops in the UK. They can easily adopt any advance technology in their shop and face
technological barriers.
Legal factors: Different rules and regulation is the subject matter of this legal factor. ASDA
is the first company who take the bold initiative to reduce the carbon footprint. They use the
eco-friendly process for production. They abide by the rules and regulation of government.
Environmental factor: For reducing the carbon footprint ASDA company deliver the
product to the customers’ home. ASDA have intensive distribution process. This process
helps them to implement this online shopping.
22

M4 Apply appropriately SWOT/TOWS analysis and justify how they influence
decision- making.
The strength of the ASDA company helps the top management to take the right decision.
Without understanding the strength, goal attainment will be difficult. Like ASDA company
want to increase the sales. Before taking this decision, they must analyze the strength. If they
found that they have skilled employee and distribution process. They can easily attain this
goal. This SWOT analysis of also discloses some opportunities. Like ASDA company can
expand the market into different continents. ASDA company can easily find out the weakness
and threats. By overcoming these they can go forward and achieve business goals. So, SWOT
analysis tools help the ASDA company to take the right decisions.
23

Conclusion
This report successfully represents the ins and outs of the micro and macro factor of the
ASDA company. It is visible that Macro factor has a great impact on the company. Not only
this different type of company and its scope is also illustrated in this report. Importance of
organisational function is needed for the attainment of the objectives.
24

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