Business Environment Report: Associated British Foods Analysis

This report provides a comprehensive analysis of the business environment, focusing on organizational types (public, private, and voluntary sectors) and their structures. It explores the impact of macro and micro environmental factors on business operations, utilizing PESTLE and SWOT analyses to evaluate Associated British Foods PLC. The report examines the interrelation between organizational functions, objectives, and structure, highlighting their influence on decision-making processes. It delves into the size and scope of different organizations, offering insights into their operational dynamics and market positioning. The report also provides a detailed case study of Associated British Foods PLC, examining its strengths, weaknesses, opportunities, and threats within the external environment. It concludes by assessing the impacts of both micro and macro aspects on business objectives and decision-making.

Business Environment
Name of the Student:
Name of the University:
Author’s Note:

BUSINESS ENVIRONMENT
Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
P1 Explain different types and purposes of organisations; public, private and voluntary sectors
and legal structures..........................................................................................................................4
Public Sector:...............................................................................................................................4
Private Sector:..............................................................................................................................5
P2 Explain the size and scope of a range of different types of organisations.................................6
P3: Explain the relationship between different organisational functions and how they link to
organisational objectives and structure............................................................................................7
Advantages..................................................................................................................................8
Disadvantages..............................................................................................................................9
Task 2.............................................................................................................................................10
LO3: Positive and Negative Influence on Business Operations of Macro Environment..............10
P4: Impacts of Macro Environmental Analysis.........................................................................10
M3: PESTLE Analysis of Associated British Foods PLC.........................................................12
LO4: Relationship of Internal Aspects of Associated British Food Plc with the External factors:
.......................................................................................................................................................14
P5: Understanding Strength and Weakness of Associated British Foods Plc by Internal and
External Analysis:......................................................................................................................14
P6: Interrelation with External Macro Factors..........................................................................15
Page 1 of 22

BUSINESS ENVIRONMENT
M4: SWOT Analysis of Organization and Influence on Decision Making...............................15
D2: Impacts of Micro and Macro Aspects on Decision-Making and Business Objectives.......18
References......................................................................................................................................19
Page 2 of 22

BUSINESS ENVIRONMENT
Introduction
In order to have better idea on the business and business-oriented study, ideas on organizational
aspects is highly needed. To complete the study Associated British Foods Plc. has been taken
under consideration. Depending upon the various aspects and functionality of the company,
questions are going to be answered. Headquartered in London, the company has a gigantic
network in the whole world and Austria, Belgium, France, Germany, Italy, Ireland, the
Netherlands, Portugal, Spain are the prime grounds for it to business (Associated British Foods
plc, 2012). The current CEO is George G. Weston and it is the second largest company in terms
of sugar producing.
Page 3 of 22

BUSINESS ENVIRONMENT
Task 1
P1 Explain different types and purposes of organisations; public, private and voluntary
sectors and legal structures.
Having an aim and objective is one of the most important criteria of a company. In this aspect,
companies from public, private voluntary and legal sectors have abided by this and that is why
those sectors are flourishing in this highly competitive area. The purpose of running a business
has to be clear and only then one organization can see the development in it.
Public Sector:
The public-sector organizations are those which are mainly run by the state and it is necessary
for the organizations to think for the people first. In this context, the most important thing that
needs to be known is the involvement of the state. The organizations that are in education and
healthcare genre are the prime targets of state. In this aspect the stare has to provide necessary
services to the citizens in order to be have their faith and perform the duty that one state has
(Yang, Hong and Modi, 2011). The most of the cases it is seen that management of the body
takes decisions on behalf of the organization but the state takes the final decision in order to
retain the faith of the people. In some cases, the central government takes the matter to its hands
and in some cases the local government.
The Associated British Foundation is one of the private companies and it is developing in a rapid
speed. The authority of the organization looks for what is necessary and the government takes
the decision in order to perform the executable decisions. It is necessary to have better kind of
opportunity to the market and for that reason it is beneficial to work in a public organization. The
most of the cases it is seen that the management is depending on the people who are working in
Page 4 of 22

BUSINESS ENVIRONMENT
the office and this gives them the work solitude that is needed (Sharabati, Naji Jawad and
Bontis, 2010). The opportunity to earn more with less effort is also available in this genre of
business. The most of the cases it is seen that the people who are willing to make a good kind of
contribution undergo training schemes and all other things to get a proper kind of idea and this is
why the efficiency is always ensured from their perspective.
Private Sector:
The prime objective of a private sector organization is to have better kind of growth in the
upcoming future. The company is owned by one individual or a group of individuals and there is
no right of states on it. It is one of the most important things to remember that the group of
people who work in this territory are working for the betterment of the company so that they can
get more benefits from the market and have better kind of opportunity in their career
(Turban,Sharda and Delen, 2010). There are different types of private sector business and it is
necessary to have better knowledge of the sector. The limited companies are constantly trying to
reach the level of unlimited liability and it is one of the prime needs of any organization.
Apart from this the sole trading organizations look for better kind of opportunity in the market to
flourish their business in a steady manner. There are many benefits of having a private
organization and in this aspect, it is necessary to have the idea of what is happening in the
institution. The most of the cases it is seen that the management revels the financial status of the
company to the public if that is a public company but in case of private institution there is no
chance of going through the measure. The private companies are not liable to give their detailed
information on the financial report to the people because they don’t have any kind of public
investors to rely on. The planners has the right to plan for a long term basis and in this regard the
service providing authority can make sure that they are in the business for a long time (Chaffey
Page 5 of 22

BUSINESS ENVIRONMENT
and White, 2010). The most of the cases it is necessary to plan on a long-time basis for proper
understanding of the manner. The owners have the ability to lose only the desired amount that
they have gained from the market and it is one of the best advantages that one can have in the
business.
Voluntary Sector Organisations: The organisations of this sector operate with the aim of
providing services for a good cause and thereby make significant contribution to the society. The
reasons for such activities are entirely dependent on the individual perspective. These
organisations are not paid for the services they provide. The major focus of these organisations is
to create a significant social impact rather than generating profits. Around 165,000 charitable
organisations exist in UK (Reachvolunteering.org.uk, 2018). The speed at which the operational
activities take place in this sector tends to be slow.
P2 Explain the size and scope of a range of different types of organisations.
In order to understand the difference of size it is necessary to make proper kind of comparison of
companies that are linked with each other. It is necessary for a good kind of communication
process and in the end of that the size of a company will definitely ensure a better understanding
of the matters as well. In this regard the company that has been taken under consideration is
Associated British Food Plc which is one of the largest companies in the world and it has 10000
employees working under it (Taticchi, Tonelli and Cagnazzo, 2010).
The company generates a huge amount of revenue per year and in the recent studies it was
revealed that around £12,800 million was received by the company. In this case the most
amazing aspect is the operating income which is way over £947 million. In this context one thing
can be easily said that the company has the ability to make sure that they have the potential of
Page 6 of 22

BUSINESS ENVIRONMENT
being the best in the world. In this regard the company will definitely have better kind of market
influence as well. For better understanding of the scenario it is necessary to know that the service
providing organizations size play a huge role in decision making process.
Apart from this the genre of business is one of the most important parts to be taken unde4r
consideration. The management of any organization is looking forward to have better kind of
business in the market. In this regard the most beneficial way will be going for those kinds of
methodologies that are necessary to be accepted. The size of the industry is a factor and the genre
where it is making its business is another thing to be taken into consideration (Van Der Aalst, La
Rosa and Santoro, 2016). For a beneficial aspect it is important to have better kind of scope in
the field. People cannot live without food and in daily life sugar is really important to be used
and in this aspect the scope for the company Associated British Food Plc. will definitely rule the
other aspects.
The other companies which are lesser in size are going to be very efficient in the industry but it
is necessary for them to be a part of the business as well. The biggest advantage of them is the
size of the company. Being a small company, it is easy for the organizations to have better kind
of opportunity in the field as well. The most of the cases it is seen that the management decision
is taken and they result in a productive manner but the people often do not see all this ( Trkman,
2010).
The service seekers see the opportunity that they have in the company and if the size is creating
any issue then they do not go for it. In this aspect one thing is important to be remembered that
reputation in the market can be redeemed only if the service providers have the ability to perform
Page 7 of 22

BUSINESS ENVIRONMENT
in a proper manner. The company JB Hi-fi is a good example for this. The company has the
ability to perform well and it is doing a great business in the related sections.
Hovis has emerged as a significant competitor of Associated British Food Plc, which is known
for its bakery products and also has mills for flour production. The vision of the company is to
hold the position of the leading organisation in the baking sector. The mission of the company is
to uphold their 130 years old performance and maintain the consistency of performance that is
high level. The estimation regarding the generated revenue of this company is around $20
million. The business spans of UK as well as Ireland. The business has employed around 3200
individuals (Hovis.co.uk, 2018). The various operational activities of the company include eight
bakeries, which span all over UK. The number of flourmills that the organisation owns is four
along with a facility for wheat malting. Three regional distribution centres are present across the
nation. The product range of the company includes specialities such as low-carb loaves since the
present generations have an inclination for being fitness conscious and thereby monitor their
carbohydrate intake. In addition to this, soft white breads are one of the premium products of the
company (Hovis.co.uk, 2018).
P3: Explain the relationship between different organisational functions and how they link
to organisational objectives and structure.
The various different structures within an organization have inter-operational features since in
order to effectively conduct a business it is important that every department maintains a balance
in their activities. These organizational functions include finance, human resources, marketing
and sales, customer services, administration and production activities.
Page 8 of 22

BUSINESS ENVIRONMENT
It is essentially important that an organization effectively manage its finances since it is capable
of causing an impact on the resources acquisition and other business activities. A continuous
monitoring of the financial proceedings need to be carried out since it is capable of providing
valuable insight regarding the financial performance of the business organization (um.edu.mt,
2018). The internal auditors tend to play a key role. Organizations like Associated British Food
Plc show the potential of ensuring the fact that the business has the potential to meet the
demands of the UK market.
Marketing function is crucial for an organization since it is the connection of the business with
the consumers of the target market. Thus, it is important that the organization is capable of
creating a significantly positive relationship with the targeted consumers. The competitive
environment demands the creation of consumer loyalty for business sustenance (um.edu.mt,
2018). It has a link with the financial condition of the organization, as the demonstration of a
competitive marketing strategy is a crucial aspect of marketing.
Page 9 of 22

BUSINESS ENVIRONMENT
Task 2
LO3: Positive and Negative Influenceon Business Operations of Macro Environment
P4: Impacts of Macro Environmental Analysis
According to Botha, Kourie and Snyman (2014), operating within the macro-environment, it is
essential for the business to understand the appearance of the new risks as it is very much
difficult for the different organizations to identify. It is also essential to understand that, in the
sector of retail business, it is almost impossible to ignore the changes which are currently being
observed within the market. The macro environmental analysis is supported by the PESTLE tool
which is helpful in identifying the political, economic, social, technological, legal and
environmental aspects of the business and the operations related to it. However, it can also be
stated that the technological aspect deals with major positive and negative impacts as well on the
business operations.
The advancements made within the technological fields are very much helpful in providing a
betteropportunity to the business, Associated British Foods PLC. In order to achieve the better
outcomes, the company must adapt to the changes within the technology. According to Savrul,
Incekara and Sener (2014), by the help of the technology it is now very much easier for the
business to develop the better shopping networks and also become a highly advanced retailer.
The online market would also allow the business to gain extra market and audience and
therefore, would help in increasing the sales. Additionally, it has also been a part of the research
to understand that these technological advancements have a negative impact on the business as
well. The negative impacts of the technology on the business is majorly related to the choice of
the customers due to the reason that the customers preferring online shopping are much more
Page 10 of 22

BUSINESS ENVIRONMENT
tilted towards the organizations having a developed online marketing system. It is also essential
to understand that, in case it is difficult for the Associated British Foods PLC to implement the
technologies in a proper way the competitive advantage within the market would reduce and
might affect the company significantly.
As opined by Cull et al. (2015), the policies and laws which are implemented by the government
are also having a few pros and cons on the business running in any industry. The government in
any case can help the organizations to develop by providing loans and other assistance. The
assistance of the government is considered as the major positive impact on the organization.
Comparatively, there are a few negative impacts of the policies and the laws which are majorly
related to the imposing of various taxes on the organizations running in the corporate sectors.
Similarly, it can also be studied that the changes within the economic conditions of the country
can affect the business of the organizations in either positive manner or in a negative manner. As
studied by Epifanova et al. (2015), the increase in the economical stability would allow the
consumers to spend more and help the organization to enhance the sales whereas, a weaker
economy could affect the sales due to the reduced income of the population the spending
capacity of the market is reduced. The reduction in the spending capacity enforces the reduction
in sales. However, Savrul, Incekara and Sener (2014) commented that, the organizations must be
conscious about the social and environmental aspects as well. The organizations must be using
the products which are environmental friendly and helps the consumer to use it in an appropriate
manner. Additionally, the organizations should be responsible socially and must help the society
to develop by the presence.
Page 11 of 22