Business Environment Analysis of ASDA: A Comprehensive Report

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BUSINESS AND BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION........................................................................................................................1
LO1 AND LO2............................................................................................................................2
P1 DIFFERENT TYPES AND PURPOSE OF ORGANISATION.....................................................2
P2 SIZE AND SCOPE OF DIFFERENT TYPES OF ORGANISATION.............................................4
P3 RELATIONSHIP BETWEEN DIFFERENT ORGANISATIONAL FUNCTIONS............................6
LO3........................................................................................................................................... 8
P4 POSITIVE AND NEGATIVE IMPACT OF MACRO ENVIRONMENT ON BUSINESS
OPERATION.......................................................................................................................... 8
LO4......................................................................................................................................... 10
P5 INTERNAL AND EXTERNAL ANALYSIS OF ORGANISATION IN ORDER TO IDENTIFY
STRENGTHS AND WEAKNESS..............................................................................................10
P6 INTERRELATION OF STRENGTH AND WEAKNESS WITH MACRO FACTORS....................13
CONCLUSION.......................................................................................................................... 14
REFERENCES........................................................................................................................... 15
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INTRODUCTION
The business environment is a combination of external and internal that affects the
operations of the company. Business environment includes factors like competitors,
suppliers, customer, government, technologies, and economy. It is one of the important
aspects for any business as it provides threats and opportunities for the business. In this
assignment, the learner comes to know about the knowledge and understanding about the
business with the help of business environment as business environment helps in identifying
business opportunities and improvement of the business. The learners will also gain the
knowledge about the impact of business environment on business and how to overcome
the issues with the help of different strategies that will help in knowing the strength and
weakness of the organisation.
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LO1 AND LO2
P1 DIFFERENT TYPES AND PURPOSE OF ORGANISATION
Business environment affects the operation of the company in negative and positive ways.
Business environment may be defined as the combination of internal and external factors of
the market like customers, competitors, government, economy and technology. The
business environment provides threats and opportunities to the company and gives a
chance to improve the business. The success of the business depends on the opportunity
handling and the ways in which the company takes the challenges as an opportunity. There
are different types of organisation in the market sector like profit, non-profit and public
(Storey, 2016).
PROFIT ORGANISATION
Profit organisations are those whose primary goal is to make a profit from the business.
Such an organisation does not have any link and shares with the government. Profit
organisation focuses on providing services in value to money. Virgin Atlantic is one of the
best examples of profit organisation. Virgin Atlantic is a British airline company founded by
Richard Branson in 1984. It is one of the largest airline companies in the world that serves in
more than 33 destinations. Virgin Atlantic is a private organisation that serves the customer
to earn a profit (Kondasani and Panda, 2015).
Business purpose
Virgin Atlantic is an airlines company and has a joint venture with Singapore Airlines. The
main purpose of the organisation is the expansion of the business in more and more
countries by providing better services to the customers in value of money (Kondasani and
Panda, 2015).
Products
Virgin Atlantic is one of the biggest airline companies in the world and thus serves many
products and services to the customer like just ride, must ride, fact ride, Pharma and pets.
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The company introduced the products and services according to the need of the customer
(Kondasani and Panda, 2015).
PUBLIC ORGANISATION
The public organisation can be defined as the organisation that works for the economy and
development of the country and company. These organisations have a link with the
government that will help in the development of the country. The profit in this sector is
shared by the organisation and the government for government services, public
transportation, infrastructure, healthcare, and education. HSBC is an example of a public
organisation. HSBC is the largest banking and financial services organisation founded in 1865
and is based in London, UK (Heikkinen et al., 2019).
Business purpose
HSBC is a banking organisation and wants to expand the business in the whole world. The
bank serves in more than 130 countries of the world. The main purpose of the company is
providing better services to the customer that will help in the development of the business
as well as the country (Heikkinen et al., 2019).
Products
HSBC is a banking organisation and provides various services regarding banking like credit
cards, fixed deposits, home loans, bank loans, personal loans, and bank saving account.
Apart from this, the online banking service is also available for the convenience of the
customer (Heikkinen et al., 2019).
NON PROFIT ORGANISATION
The non-profit organisation works for the welfare of the citizens with the help of donations
and charity. These organisations serve people in the same way by offering goods and
services. Oxfam is a non-governmental organisation that serves all around the world and
was founded in 1942 (Massingham et al., 2018).
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Business purpose
The main purpose of the Oxfam organisation is the reduction of poverty and injustice in the
world. According to Oxfam the poverty and injustice can be removed from the society with
the help of politics and human action (Massingham et al., 2018).
Products
The main services provided by Oxfam are the charity and donation for the poor and
powerless people, also the organisation preserves the heritage and government assets for
the future generation by maintaining those (Massingham et al., 2018).
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P2 SIZE AND SCOPE OF DIFFERENT TYPES OF ORGANISATION
Size includes the area and products served by the company to the customers. The different
organisation has different sixes of business according to the types of services they are
providing. Scope relates to the opportunities that the organisation have for the expansion of
the business and help the organisation in earning a profit. The scope of the organisation
depends on the sector and the challenge handling power of the company. Also, the different
sector has different scopes and size for business (Alvesson, 2018).
PROFIT ORGANISATION
Virgin Atlantic is a profit organisation that serves the customer by providing airline services.
The organisation has more than 45 aircraft that includes 20 airbuses and 25 Boeing that
serves in more than 33 destinations in the world. The company wants to expand the
business in more countries that can be achieved by using the challenges as an opportunity.
Virgin Atlantic airlines have a great scope in the private industry as it is one of the best
airline company in the world and can expand the business on the basis of reputation and
services. The company can enhance the services to the customer by focusing on the needs
and demand of the customer. Knowing customer will help in finding opportunities and
according to that, the business can be expanded. The organisation have a great scope in
earning more profit as the customer prefer better services instead of money (Salamon and
Sokolowski, 2016).
PUBLIC ORGANISATION
HSBC is a public organisation and is the world's seventh largest bank and biggest bank in
Europe. The organisation has approximately 228,687 employees and serves in more than
130 countries. The company wants to expand the business in the world that can be achieved
by the utilising the scope within the industry. The company has a great scope in expanding
the business digitally. The company needs to provide online services to the customer like
net banking, online transactions and customer care. The company can use the new
technology and innovation for the digital transformation of the business and for the
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transformation the company has to focus on the demand of the customer that will help in
generating new ideas for the expansion of the business (Bovaird et al., 2015).
NON-PROFIT ORGANISATION
Oxfam is a non-government organisation based in London and founded in 1942. The main
aim of the organisation is to end the injustice of poverty. The organisation works with a local
and national organisation that will help in fighting against injustice. The organisation has
approximately 20,000 volunteers in the UK that serve the poor and powerless people with
the aim to reduce poverty. The company serves all around the world and has a great scope
in business expansion. Oxfam has a great opportunity in the field of empowerment,
accountability and the preservation of the heritage for the future generation. The company
can expand the business by including more and more organisation in the campaign (Ahmed,
2016).
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P3 RELATIONSHIP BETWEEN DIFFERENT ORGANISATIONAL FUNCTIONS
Organisational functions are one of the important aspects of the growth and success of the
business. The organisational function of the company has great importance and needs to
have a relationship with another functional unit for the success of the company. There are
many functional units in the organisation that corporates in the development of the
business. All the functional units of the company focus on the business environment that
impacts the development of the business. The business can be impacted by the internal or
external factors and so all the functional units of the organisation work together to
overcome the issues. There are six functional units within an organisation (Allen et al.,
2016).
Design and production
To design and produce product and services the company needs to combine the labour,
capital, information and resources that will help in the manufacturing of the product. For
the design and production of the product, the department needs to coordinate with other
departments like finance and human resource that will help in information and resource
gathering (Allen et al., 2016).
Finance
The finance department of the organisation is responsible for maintaining the budget of the
company. The finance department focuses on the earning of the company and the losses
that the company needs to cover with the performance and services. For the improvement
of the budget the finance department of the company coordinate with another functional
unit of the company like production and research team that will; help in gaining profit to the
company (Allen et al., 2016).
Human resources
Human resource is one of the important functional units of the organisation as it is
responsible for the overall development of the company. The HR department helps in
managing all the issues within the organisation that is affecting the business. The HR
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department of the company coordinates with another department for like finance and
development team to resolve the issues (Allen et al., 2016).
Sales and marketing
Sales and marketing focus on the demand of the customer that will help in increasing the
productivity of the services and thus leads the business towards success. For the
productivity of the services the sales and marketing department coordinate with other
departments like finance and management that will help the execution of the research
(Allen et al., 2016).
Administration
Administration department deals with all the issues, complaints, emails, enquires and
computer services. The department is responsible for maintaining and preparing the
documents of the organisation with the help of finance and another department (Allen et
al., 2016).
Research and development
Research and development team plays an important role in the improvement of existing
products and services and for the overall growth of the organisation. The research and
development team coordinates with all other functional units of the company for the
improvement of services that help in the improvement of the services (Allen et al., 2016).
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LO3
P4 POSITIVE AND NEGATIVE IMPACT OF MACRO ENVIRONMENT ON BUSINESS
OPERATION
The macro environment can be defined as the external environment that influences the
business of the organisation. The macro environment includes factors like economy,
technology, culture, political, environmental and legal factors. The impact of the macro
environment may be positive or negative that depends on how the company is handling the
problems. Asda is a supermarket retailer company founded by Peter and Fred Asquith in
1949. Asda has redundant 28 jobs in the head office due to the impact of the macro
environment on the business. For overcoming the problem Asda needs to properly analyse
the factors that are impacting the business and then according to that has to resolve the
problems that will help in the development of the business. The company needs to give
emphasis on the external factors that are influencing the business like political, legal, social
and environmental factors (Schaltegger and Wagner, 2017).
Figure 1: ASDA Image (ASDA, 2019)
PESTEL ANALYSIS
Pestle analysis is used for the analysis of the macro environment in the market that will
impact the business. Asda Company needs to use the pestle analysis tool for the analysis of
the external factors affecting the business in a positive and negative aspect. ASDA is a
supermarket which retails clothes, food, general merchandise and toys. ASDA’s promotions
are generally based on the price and thus the company needs to do an emphasis on the
external factors that are affecting the business (Schuetz and Schrefl, 2017).
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Figure 2: Pestel Analysis (Academey, 2019)
Political factor
 Employment law
 Taxation
 Trading laws
Environmental factor
 Weather change
 Hazardous waste
 Pollution
Social factor
 Demographics
 Health and security
 Demand changing
Technological factor
 New innovations
 Stock control
 Research cost
Economic factor
 Exchange rates
 Inflation
 Interest rates
Legal factor
 Planning permission law
 Consumer law
 Age and disablement favouritism law
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