Analyzing the Business Environment of Associated British Foods Plc

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Business and business environment
Word count: 2, 531

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Contents
Introduction......................................................................................................................................2
TASK 1............................................................................................................................................3
LO1..................................................................................................................................................3
P1 delineate the divergent types of business firms and their competence...................................3
P2 & M1 discuss the size and range of diversified organizations...............................................3
P3 & D1 discuss the various functions of the organization and how they link to the
organizational structure...............................................................................................................6
M2 discuss the benefits and limitations of the interdependence of various departments and the
ways in which it influences the organizational structure of British foods...................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................7
Introduction
Business environment is the total of all the micro and macro parameters that affects the business
environment and its operations largely. It can also be referred to as a marketing term that
influences the company’s capacity to build and maintain successful and positive customer base
in the market (Crane and Matten, 2016). In this assignment, we are going to address the different
types of business firms and its size and scope in the market followed by the interdependence of
various organizational functions such as marketing, finance, human resources etc. Moving
forwards the advantages and disadvantages of macro environment on the operations of the
business will be addressed followed by conducting a SWOT analysis of the business firm chosen
for this report. The organization chosen for this report is Associated British food Plc. it is a
multinational food retailing company that is situated in London and it operates worldwide by
serving customers with the best of its products.

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TASK 1
LO1 & LO2
P1 delineate the divergent types of business firms and their competence
A combination of both internal and external factors that influences the operations of British
foods is known as business environment. There are many discrete types of firms that are present
in the market depending on the functions they perform. The various types of organizations are
listed below.
Public organization: these are government based organizations that work under the government
and perform activities that are related to the government (Craig & Campbell, 2012). These
organizations are generally non-profit organizations that work by providing social services to the
common public of the society. The main aim of such organizations is providing services to the
public are more important than making profits out of these services. For example, Virgin money
is a public organization.
Private organization: these organizations are established with the aim of earning profits from
the services they provide to the public within the country and they form a very important pillar of
the economy of the country. Such organizations are owned privately and they operate privately
such as Tesco to fulfill their business objectives and make money out of their services offered to
the customers.

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Voluntary organization: these organizations work for the society with a specific purpose or
fulfilling an aim of the common public or those in need. They work for bringing about socio-
economic development within their country via their activities. An example of voluntary
organization is Bloodbot.
Charitable organization: these are also non-profit organizations which are also known in the
society as public charity organizations. They work for religious intentions, educational and
charity related issues within the society. An example of such type of company is Marie curie.
The range of legal organizations is sole traders, partnerships and private limited firms. The
sole trading organizations are the ones where a single owner handles the entire business entity
and is alone responsible for all the profits and losses of the company. In partnership
organizations, two or more people come together and form a business firm and run the
organization and share the profits and losses the company bears (Charles Jr et al, 2017). A
private limited firm is that is privately held and managed where the liability of members of such
organizations is very limited to the amount of shares they can have with them.
P2 & M1 discuss the size and range of diversified organizations
The discrete types of organizations present in the market are small, medium sized and large
organizations of which all have different purposes and objectives in the market.
Small organizations Medium
organizations
Large organizations
Size 0-100 employees in
size
50-250 employees in
size
250+ employees in
size
Scope The main scope of
small organizations
they add to the
economy of the
country and bring in
better income
opportunities
Medium organizations
may sometimes work
in partnership with
two or more people
and the scope of such
organizations is to
make social
contributions to the
country.
Large organizations
usually work as a part
of government that is
non-profit in nature
and the main scope is
to bring about
development in the
society by their
services.
Business objectives The goal of such
organization is to
bring about socio-
economic changes in
the country.
The goals of medium
organizations are
quite low compared to
large organizations
because their reach
out to customers is
low.
Since such
organizations work on
a global level the
goals are also high
and they earn profits
from selling their
products worldwide.
Market share 70.5% of the market
share
19.8 % of the market
share
9.7% of market share
Profit share £8,000 per year £1.9 trillion £200,000 per year
Growth The growth of small
businesses in UK is
very high because
Growth of medium
business is also seen
in UK since they
Growth of large
business is less
compared to small

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they greatly to
innovation to the
country.
employ a large
number of people and
add to the economy of
UK.
and medium sized
firms because the
employee count is
large and the goals are
also very vast.
Sustainability Sustainability is their
top priority and to be
in sync with changes
with the market
changes because of
the small employee
size.
In this case also
changes can be
brought about quickly
with respect to the
changes in the market.
The changes cannot
be brought be quickly
because the employee
size is very large.
Fig: Market share of small, medium and large business firms. (Source: www.ic.gc.ca)
The two types of organizations chosen for comparison of size and range are Associated British
Foods and Zaffirson Food because both belong to the same sector.
Large business organization Small business organization
Associated British Foods Zaffirson Food
Size Consists of more than 10000
employees in the organization
The employee number is only
ten in the organization
Revenue £12, 800 million £17000
Operating income £947 million £950
Scope of work The scope is to serve both
national and international
customers with the best of
products from their various
sectors such as grocery, retail,
agriculture etc.
They serve only to the
national customers with
several types of food and
beverage items and churn a
huge profit out of it.
Global growth refers to the expansion of business overseas by importing and exporting products
overseas to extend or expand the existing business and earn huge profits by the business.

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Transnational firm exercises its economic power overseas across the national borders and all
over the world. There is a lot of development seen in the past 20 years in the transnational sector
globally. Many developed countries are now welcoming transnational companies and see foreign
direct investment as an important source of development. Transnational companies play an
important role in developing and enhancing economic growth and also developing to social
growth. International organizations are the business firms that have an international identity,
membership and scope (Bull et al, 2016). The most famous international organization is UN
where the development is seen that promotes peace, fights diseases, and builds schools etc. that
add to the growth of the population on international levels. A global organization is a business
firm that sells its products and services on a global level and is accessible to people all over the
world. There is a lot of development seen in the global organizations due to the advancement in
technology and connectivity that is made it easier for firms to connect across countries so easily.
Market forces are forces that decide the price levels of a commodity that is been sold in the
market depending on the buying and selling behavior of business firms that is not under the
control of the government (Bryman and Bell, 2015). Scarcity and choice go hand in hand i.e.
when there is scarcity of resources the company must make efficient choices to fulfill the needs
of the customers. Supply and demand is the interrelationship between the quantity of a product
that the producers wish to sell at different prices and the amount of products the customers want
to buy. Income elasticity is the degree of responsiveness of a product that is brought about by
change in customer’s income where other parameters remain constant.
P3 & D1 discuss the various functions of the organization and how they link to
the organizational structure
There are various departments that operate within British food of which there are specific
functions each department follows to fulfill the goals of British foods effectively. The various
functions that are performed within British foods are marketing, finance, human resources,
research and development, sales, production and operations, customer service, administration
etc.
Marketing is one of the important bridges that connect the customers and the products and
services offered by the company. This tool is used in building awareness of the products sold by
British goods in the market so that the customers can get to know about them only then the
customers will buy the products. By promoting the products of the company it fulfills the
business objectives of the company (Bonoli, 2014). Human resources are one of the major
contributors in fulfilling the goals of British foods by adopting various strategies and methods. It
uses the resources of the company effectively and in the right manner that helps in fulfilling the
business goals that enhances the productivity of the company. The department also looks after
the recruitment process of hiring individuals within British foods that will help the company to
achieve the business goals. It enhances the productivity of the company and also enhances the
profit margin of the company by increasing its sales. Marketing and human resource departments
cannot function without the finances of the company because both the department needs finance
to perform their functions efficiently. The finances are taken care off by the finance department
of British foods that is responsible to control the expenditures of the company related to buying
and selling. It also needs to keep in account the sales of the company and if the company is
gaining any profits from the sales of the products sold out by the company to its customers. The

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operational department oversees the operations of the company and the entire production
process to make it run smoothly and meet the expectations of the customers efficiently.
The functional structure of British foods organizes the employees into groups based on the tasks
allotted to each one of them. A divisional structure of the organization organizes the products
and services into discrete divisions based on geographical areas. A strategic business unit is a
separate structure within the organization that oversees the process of product offering and
market segment which is interlinked to the function of marketing and operations department. In
the matrix structure the employees are required to report to two managers one is the functional
manager and the other is the product manager.
M2 discuss the benefits and limitations of the interdependence of various
departments and the ways in which it influences the organizational structure
of British foods
The interdependence of the departments within British foods is very essential because if any of
the department does not perform its work it will affect the productivity of other departments.
There is a large amount of information that is being passed on from one department to other for
the proper functioning of the organization and to carry out the operations of the company in a
hassle free manner (Bitektine and Haack, 2015). The advantages of such interdependence
among different departments of British foods is it helps to guide each other in terms of work
related issues, help to build good employee relations, builds a positive work environment within
the company, it provides assistance to other departments by helping them, it escalates the profit
level of every department because all of the departments are working together as a team and
finally due to all of this it enhances the productivity of the organization. The limitations of
interdependence among different departments in terms of personal grudges a department can
harm other department by disrupting or misusing the information against that department which
might lead to loses, it enhances competition among the various departments in terms of profits
and work, unnecessary interference from other departments may lead to conflicts within the
organization which may create a negative work environments in the company thereby impacting
the productivity of the organization.
Conclusion
Business environment referred to as a marketing term that influences the company’s capacity to
build and maintain successful and positive customer base in the market (Besley, 2015). In this
assignment, we have addressed the different types of business firms and its size and scope in the
market followed by the interdependence of various organizational functions such as marketing,
finance, human resources etc. Moving forwards the advantages and disadvantages of macro
environment on the operations of the business have been addressed. The organization chosen for
this report is Associated British food Plc. it is a multinational food retailing company that is
situated in London and it operates worldwide by serving customers with the best of its products.

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References
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