Introduction to Business Environment Report

This report explores the different types of business sectors, including public, private, and voluntary organizations. It examines the purpose and objectives of each sector, using examples like NHS, Morrison's, and Oxfam. The report also analyzes the impact of stakeholders and the micro and macro business environment on Morrison's, utilizing SWOT, PESTEL, and Porter Five Forces models.

Introduction to Business Environment

Contents
Introduction..................................................................................................................................2
Task..................................................................................................................................................3
A.The purpose of public, private and voluntary sector company.........................................3
B. Objective of stakeholder and its influence on the business:..............................................5
C. Micro and Macro business environment which affects the decision of Morrison:.........7
There are various factors which effect the Micro and macro environment of the Morrison.......7
Reference:..................................................................................................................................13

Introduction
There are different type sector some are private sector, some are public sector and some are
voluntary sector. In these report we highlight the different kind of organisation and there
purposes. Private sector and public sector are profit oriented and voluntary sector are non-profit
oriented organization. Public company raise the fund from public and issue there share from
initial public offering. Private company raise the fund from the investors, friends, family and
loan. Voluntary sector raise the funds from charity, donations, club and from different
organisations. We also highlight the objective of different group of stakeholders. We also present
the impact of micro and macro environment on decision in the organisation through different
models like porter five model, PESTLE and SWOT analysis.

Task
A. The purpose of public, private and voluntary sector company
Public company
A company which issued there share through initial public offer and listed in at least one stock
exchange or over the counter market is known as public company. A public company must have
to submit the annual report. The limit of minimum number of member in public company is 7
and there is no restriction on maximum number of member. They raise funds and capital through
selling the stock in market. They must have at least 3 directors. Example of some public limited
company are NHS, Google LLC, F5 networks etc.
NHS
National Health Service is a public limited company in England. It is world largest single health
care system. They provide the primary care, in - patient care, long term health care, dentistry and
Ophthalmology care. They provide the services on free of cost except for some specific service
like dental care, prescriptions, eye test and long term care services to the legal residents of UK.
Purpose of NHS
The purpose of NHS is to provide good health care service to all regardless the wealth. NHS aim
to meet the need of patient and provide free services so each patient can get the benefit of the
constitution of National Health services (Cornuelle 2017). The purpose is to provide services
directly to the patient with support of government. The objective is to provide the useful
information to the general public regarding the health.
Private company
A private company is a company who restrict public for subscribing there share and they can't
transfer there share according to the article of association. The government provide some
exemptions to the private company. The minimum number of member are 2 and the maximum
no. of member are 200 in private company. They use private limited at the end of the company
name. They must have at least 2 directors. They raise the fund through venture capital and by the
investment of different investor. They can also raise the fund from loan and borrowing from

friends and family. Example of some private company are NHS, Facebook, Ikea and candy
maker Mars etc.
Morrison
Morrison is the fourth largest supermarket in United Kingdom and there headquarter is in
Bradford, West Yorkshire and England. Morrison is a private limited company and listed in
London Stock Exchange. In 2012 Morrison launched its first online site “Morrison Cellar”. The
product of Morrison is food, groceries, drink, cloths, book, music and toiletries. They also work
on environment safety project. They use paper begs in there retail store. Mainly there business is
food and grocery and most of the product are sell through own manufacturing unit. They provide
the best fresh food to the customer with the help of skilled and expertise colleagues.
The purpose of Morrison is to provide the quality and best fresh food to the customer. They
provide food at lower price to the customer and also they focus on the brand loyalty. They recruit
the 200 local food supplier for the customer to provide food at lower price. It increases the sale
and profitability of Morrison. Morrison aim is to gain the profit through customer satisfaction.
The purpose is to capture the whole food market. They also own some manufacturing sites to
provide the food to the store.
Voluntary Sector Company
Voluntary sector business are those company whose aim is to provide the benefits to the society.
Voluntary sector organisation is non - profit organization. In private and public sector company
the profit is distribute in stakeholders but in voluntary sector the profit is reinvest in the
organization itself. They are independent of government. They are self - motivated and want to
achieve the social goal. Some example of organisation in which voluntary sector included are
charity, social welfare organisation, community group, foundation etc. voluntary sector
organisation understand the need of the society and solve problem.
Oxfam
Oxfam is a voluntary sector organisation and works for the poverty and injustice related issues. It
is a non -profit organisation and work for citizens to solve the poverty related issues (Bryson and
et.al 2017). They believe that poverty and justice can be overcome by the human efforts and
political support. Oxfam focuses on 4 major areas of economic justice, gender justice, rights in

crisis and essential services (Laffin 2018). They focuses that government provide equal quality
of food, education, health, water and sanitation to public.
Purpose
The purpose of Oxfam is to reduce the poverty and injustice in the world. They aim is to provide
the rights of livelihood, basic needs, right of heard, safety and security and right of identity.
There primary purpose is to create social impact on public rather than to create the profit. They
provided there services to help the general public and raise the social issues in the society. They
want to reduce the gap between the rich and poor. They focus to provide food to poor people
(Hall and et.al 2016).

B. Objective of stakeholder and its influence on the business:
How stakeholders affect the business activities
Customers, employees, communities and business partners are the key stakeholders which
carry the company decision and activities. The various role play by the stakeholders are :
i) Governance and social responsibility: Business government is establishment of mission,
vision and objective while the social responsibility of a company is to balance relation
between society and environment.
ii) Decision making: the stakeholders have the right to disrupt the decision and introduce the
new idea. Member of the board make decision regarding the major issues of the company.
iii) Investors: stakeholders invest in your company thus they can increase or decrease the stakes
of the company
iv) Corporate conscience: large stakeholders are the high profile investors the play the major role
in the decision making of the company, the large stakeholders can disapprove the plan if they
find it harmful for the companies long term goals.
Stakeholder mapping is the process of identifying the stakeholder who have interest in the
project. They may be the single individual or multiple individuals. Stakeholder are the person
who influence the business decision. They may be investor, customer, shareholder or employee
of the organisation.
The stakeholder of Morrison private Ltd are customer, shareholder and employees.
They influence the day to day activities of Morrison supermarket. Stakeholder has the power
of modify and set the requirement for the project. They have the power to change the
project according to the interest.
The objective of employee is to get higher salary, promotion, appraisal and job security.
The employee of Morrison can influence the business by demanding the higher salaries in
the organisation. They also can demand for higher job security and safety. The demand
of employees can affect the profit of the business and increase the expenses of company.

The objective of customer is to get satisfaction on consuming the goods and services
of Morrison. Customer can also influence the activities of Morrison business. They demand
the valuable product from the store. Customer aims to get the valuable product at cheaper
price. They also demand quality and safe product from the store (Jones and et.al 2016).
Morrison mostly trade in food and grocery. It’s company responsibility to provide better quality
of product and fresh food to the customer. The customer also can demand for better services.
The objective of shareholder is to get the dividend and profit from the organization. Shareholder
influence the business by demanding more share and dividend in the Morrison profit. They can
also force the company to change the promotional activities to increase the sales.
The local community can also affect the business of Morrison. The location of store can affect
the people surrounding it. Morrison has to develop the good relation with the local community so
in future local community will not affect the business.

C. Micro and Macro business environment which affects the decision of Morrison:
There are various factors which effect the Micro and macro environment of the Morrison.
SWOT analysis:-
SWOT analysis can be helpful to analyse the Morrison internal and external factors (Mugurel-
Alin, 2019.).
Strength:
 Morrison has an efficient supply chain
 It has a strong distribution network design
 it offers a wide variety of products to its customers which includes foods, drinks,
groceries, books, music, clothing and toiletries
 the company has also been listed in the London stock exchange
Weakness:
 the company has a limited geographical area
 Weak loyalty from the customers
 Bad customer service
 investment is low in the research and development in comparison to the other companies
in this industry
Opportunities:
 As nowadays the demand of the consumers is changing rapidly so it can help the
company to grab the new opportunities in the market
 Morrison can also acquire small business which will help the company in expanding its
range of products and it can also undergo partnership with the various other companies
in order to expand geographically
Threats:
 Increase in the taxes by the government can be an issue for the company
 As there are various competitors in the market which can effect the sales of the company

 the pressure for rise in the pay level by the government can also effect the profitability of
the company(Li 2017. )
PESTEL analysis
PESTEL analysis helps to identify the macro environment which effects the company. The
factors which effects the macro environment are includes political, Economic, social,
technological, economic, and legal.
Political factors:
Morrisons should analyse the following political factors which can effect the working of the
organisation.
 Legal framework related to contract enforcement
 the laws related to retail industry like anti trust law
 intellectual property protection
Economic factors :
The various factors such as inflation rate, exchange rate, saving rate and foreign exchange rate
can affect the working of the company. As Morrison provides its services in more than a dozen
of companies so it should consider the various economic factors of the country's
 the availability of skilled workforce
 economic growth rate
 inflation rate
 interest rate
 availability of infrastructure
Social factors:

The change in social factors can affect the firm in many ways , so it is necessary to analyse the
social factors in order to run the business successfully, the below are some of the social factors
which effects the customer needs and preference :
 Lifestyle
 Buying habit
 Education level
 Social class
 attitude toward saving
 culture
Technological factors:
As the technology is changing rapidly almost every sector make use of technology.
Technology has become essential to run the business.
 The impact of technology in the retail industry
 How the use of technology in retail industry has affected the prices of the goods
and services
 The periodic comparison of the technology used by the competitors
Environmental factors :
Different country’s have different environmental laws, even the countries within itself has many
environmental laws for the different states based on their geographical condition, whether,
climate , availability of water etc., Endangered species so firm should be aware of
 Laws related to environmental pollution
 Laws related to safety of the environment
 Whether and climate of the region
Legal factors:

To enter into any new business or to expand in another country Morison should analyse the legal
factors of the country as legal environment of the business plays an important role in the success
of any organization. The laws made by the government helps the firm for the economic growth
and protect the customer from exploitation. Some government laws are : Organisational law,
Security law, Consumer protection law, Employee protection law, health and safety law and data
protection law(Kimani and et.al., 2018).
Porter five forces
Porter five forces is helpful in understanding the business environment.
Threat to new entrants:
The firm profitability or a success pattern can highly be affected by the entry of new competitor
in the market. The Morison can take the following steps in order to minimise the risk from the
new entries in the market.
 the good quality of the product will help the firm to gain customer’s loyalty
 Better performance of goods and services
The various threats to the firm can be
The availability of substitute – if the firm fails to meet the demand of the customer, the
customer can switch to the other brand.
Market research – after completion of proper research of the market the product should
be launched in the market.
Bargaining power of supplier:
Every company in the retail industry buy the raw material from the suppliers. So here the
powerful suppliers are in the dominating position as they can extract higher prices from the
company.
The Morrison can overcome this
 By maintaining strong relationship with the various suppliers

 By using different types of raw material for their product so if the market goes up or
down accordingly they can switch to the other supplier
Bargaining power of buyers:
The buyers want to get the best product by paying the minimum amount.
The firm can overcome this
 By increasing the customer base:
 By innovating new product
Threat of substitute:
When the substitute of your product or services is present in the market it increases the threat of
loss of customer and profitability of the firm also suffers. Morrison company can tackle the
threat of substitute by following steps:
 By providing good service to the customer
 By understanding the need of the customer and offering the services accordingly
 Uniqueness in your product and services
Rivalry among the existing competitors:
If the rivalry in the market is intense it will lead to reduction in prices and will affect the
profitability of the company(Boasson 2016. ). Morrison can overcome this by
 Differentiating its product from others
 Cost leadership
 By building the competitive rivalry strategy
CONCLUSION:

From the report the business environment can be easily analysed as the report is helpful in
understanding the different types of sectors such as private, public and voluntary business sector
and their purpose which varies from each other in many aspects the NHS is the public company
which provides primary care to the patients while the Morison’s which is a private sector
company has the objective of providing fresh food and services to the customers and to capture
the whole food market while the purpose of voluntary company i.e., Oxfam is to reduce the
poverty and injustice in the world.
There are various objectives of the stakeholders which can affect the working of the business
such as decision making, social responsibility etc which affect the business of the company in
many ways.
The business environment can be analysed by the use of various models which will help the firm
to understand the market and identify the threats pertaining in the market. The firm can grab the
opportunities by analysing the market. The swot analysis is helpful in understanding the internal
environment of the market where as Porter five forces model and PESTEL analysis is helpful in
analysing the external environment.
Reference:
Boasson and et.al., 2016. EU climate policy: Industry, policy interaction and external
environment. Routledge.

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Hall and et.al 2016. Public, private or neither? Analysing the publicness of health care social
enterprises. Public Management Review. 18(4). pp539-557.
Jones and et.al 2016. The uneven impact of austerity on the voluntary and community sector: A
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ON THE RELATIONSHIP BETWEEN KNOWLEDGE MANAGEMENT AND
COMPETITIVE ADVANTAGE. European Journal of Business and Strategic
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Routledge.
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