David Game College HND: Unit 1 Business Environment Report Analysis

This report provides a comprehensive analysis of the business environment, using AstraZeneca as a case study. It begins by defining different types of organizations, including public, private, and voluntary sectors, and their respective purposes. It then delves into the organizational structure of AstraZeneca, examining its size, scope, and alignment with its business objectives, including its hybrid structure and emphasis on innovation and commercial excellence. The report explores the complexities of different business structures, such as hierarchical, functional, divisional, and hybrid models, and discusses the interrelationship between various organizational functions like IT, HR, production, and finance. Furthermore, the report investigates the macro-environmental factors impacting AstraZeneca, utilizing the PESTLE framework to analyze political, economic, social, technological, legal, and environmental influences. A SWOT analysis is included, along with recommendations for the firm's growth, considering both internal strengths and weaknesses, and external opportunities and threats. The report concludes with a summary of key findings and recommendations for AstraZeneca's strategic development.

Unit 1: Business and the
Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Section 1..........................................................................................................................................3
1. Different types and purpose of organisation............................................................................3
2. Organizational structure, size and scope of business and their alignation with business
objective...........................................................................................................................................4
3. Complexities of different type of business structures and the relevance of the interrelationship
of different organization function....................................................................................................6
Section 2..........................................................................................................................................7
1. Macro environment impact on AstraZeneca Business................................................................7
2. SWOT analysis..........................................................................................................................10
3. Actions for firm’s growth..........................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business can be defined as activities that emphasizes on selling and purchasing of
product and services and it need health environment for fruitful result. AstraZeneca is of well
known pharmaceutical company in United Kingdom and well known for its innovation. Firm
presently is in end process of developing process of COVID vaccine. There are three types of
business sector in any country namely, public, private and voluntary as discussed in report. This
organisation further divided according to scope, size etc. It also explains relationship between
different function of the firm and way in which it linked with objective & structure. Report
discuses about macro and micro drivers that effect on growth of firm. It also explains about
action that company can take to overcome from this barrier.
Section 1
1. Different types and purpose of organisation
Public sector – Public sector organisation is one which is owned and operated by the
government and these generally exist at three levels such as national or federal, regional or state
and lastly at local or municipal level. Some example of public sector organisation are education,
electricity, fire service, healthcare etc (Bouckaert, Peters. and Verhoest, 2016). The purpose of
these type of organisation is to provide the best service at any cost and also optimum utilization
of scarce resources to maximize country’s productivity. The public sector organization in UK is
National Pharmacy Association. They provide goods and services for the betterment of the
community and society. The finance for these type of organization comes from taxes.
In public sector organization there are separate finances of the business and the personal
finance of the members and issues shares to the public which have the value of at least £50,000
prior to initiating their trading. Advantage – Provides economies of scale, protection of public
interest, helps in quicker decision making.
Disadvantage – It creates financial burden, misuse of powers, consumer interest is ignored,
sometimes difficult to manage, political pressures.
Private sector – Private sector organisation is one which is owned, controlled and managed
by private individuals or enterprises. These enterprises are driven by profits and financed by
private money from shareholders and also by bank loans. The main purpose of these type of
3

organization is profit maximization of profits by finding the right balance between their sales
volume, selling price and cost of production etc. The private sector organization are not run by
government but run by individuals and companies with the objective to earn profit. The private
sector organization are funded through friends, family, bank loans, angel investor, venture
capitalists. The organizational structure of Astra Zeneca is public limited company which
comes under Multinational Corporation. A multinational corporation is one which is registered
and operated in more than one country at a time. There are some characteristics of the legal
structure of Astra Zeneca such as it has very large assets and turnover, several network of
branches, the control is with the home country. Capital-intensive technology is used to achieve
substantial growth and offer good quality and reliable pharmaceutical products etc.
Advantage – Greater opportunities for promotions, more profits, external environment
stability.
Disadvantage – fewer resources, lack of transferability of shares.
Voluntary organisation – Voluntary organization are those organization whose primary
purpose is to create social impact rather than profits. It is also called not-for-profit sector and the
money raised should be invested back into the community or the organization (Tomczak,2016).
Some example of voluntary sector is charities, foundations, community groups, social welfare
organization etc. It consist of three aspect which are an unincorporated association, a trust and a
company limited by guarantee. The members have limited liability partnership and has the
separate legal personality form the company. The organization has risk of personal liability.
Advantage – Gaining public trust and recognition, tax relief, no equity investment.
Disadvantage – less earnings, too high expectations of the public.
2. Organizational structure, size and scope of business and their alignation
with business objective
Organizational structure
AstraZeneca has a hybrid organisational structure but is changing their organizational
structure by creating therapy area-focused Research and development units that are responsible
for discovery through late-stage development (Ahmady, Mehrpour. and Nikooravesh, 2016).
They are also planning to include mirrored commercial units for biopharmaceutical and
oncology.
4

Hierarchies are removed and employees are grouped into teams made up of people possessing
different abilities.
Public sector Private sector Voluntary sector
Size 5.39 million People
are employed in public
sector. A very good
example of public
sector organization is
National Pharmacy
Association
The size of private sector in UK
is growing at a faster rate and
the public sector is little bit
shrinking. The contribution of
private sector to GDP in UK is
83.65%. AstraZeneca was
fourth largest in the world at the
time of merger in 1999. It has
around 59,700 employees and is
ranked 8th among its top 10
competitor.
As per survey there
are around 165,800
voluntary
organization in UK.
A very good
example of
voluntary association
in UK is The
National Trust.
Business
objective
The main objective of
public sector is to
provide services to the
community and also
creating employment.
The main objective of private
sector is cut cost in their
processes and become more
efficient and learn profits. Also
to enhance the technological
advancement in the business.
The main objective
of voluntary
organisation is to
provide social
service and to ensure
proper health and
well-being of the
public.
Business objective of AstraZeneca
The main objective of AstraZeneca is driving the growth through successful innovation and
commercial excellence and maximizing profitability by managing costs and scaling efficiently
(Morgan. and et.al., 2018). Also impacting and improving the whole patient journey from disease
prevention and screening diagnosis and treatment to rehabilitation.
5

AstraZeneca’s prioritize launching a steady flow of speciality care products, balancing the
company’s historic strength etc.
Rebuilding the R&D engine through innovation and distinctive science supported by co-
location of teams.
The scope of the company is to reduce the greenhouse effect and develop a climate strategy
for reducing the adverse impact on environment and also conducting the risk assessment. To
achieve their objective they also put patients at the first place and doing the right thing, guiding
the decision-making in the organization and foster a unified AstraZeneca culture in the purview
of their scope.
3. Complexities of different type of business structures and the relevance of
the interrelationship of different organization function.
Hierarchical structure – In this type of organization structure there is one supervisor under
which employees are grouped. The groups are made based on the following factors like function,
geography and product etc. it has pyramid shaped organizational chart and the chain of command
goes from top level to lower level.
Advantage – gives each employee a speciality, creates comrade between employees, clear
reporting relationship.
Disadvantage – slow down innovation, employees at lower level feel lack of ownership,
departmental goals are given more priority than the whole.
Functional structure – In this type of organization employees are organized as per their
skills and employees with similar skills are put into a particular department.
Advantage – enhances specialization, easily scalable in any type of company, allows employees
to focus on roles (Williams, 2020).
Disadvantage – difficulty in interdepartmental communication, creates silos within organization.
Divisional structure – In this type of organization there are various divisions and each
divisions have their own marketing, finance, sales, IT teams. This structure is best for large
organization
Advantage – increases flexibility, dynamic functioning, promotes autonomy and customized
approach.
Disadvantage – wastage of resources, communication interruption.
6

Hybrid structure – It is also called matrix organizational structure and looks like a grid
and people with similar skills are grouped together for a particular project.
Advantage – dynamic approach, encourage employees to diversify their skills.
Disadvantage – departmental conflicts may arise, can change frequently than other structures.
AstraZeneca has a hybrid organizational structure which means it combines two or more
structures. As AstraZeneca has a dynamic work environment therefore hybrid structure is best
suited to this company. The company can get functional expertise in terms of working groups.
The employees get diversification of the projects and because of this their skills sets broadens up.
But sometimes there are chances of occurring conflicts and the reporting relationship are also
ambiguous.
Interrelationship between different organizational functions
IT and HR function – As in the organization IT department is responsible for communication
and maintaining networks and records and HR department is responsible to hire right person at
right job. In AstraZeneca IT department helps in maintaining proper record of the potential
candidates that are related to pharmacy and also keep a proper record of medicines which they
manufacture such as Atacand, Crestor, Lokelma and many more and HR hires suitable candidate
who can operate IT, computers.
Production and finance – Production department of AstraZeneca is responsible for producing
all the pharmaceutical products and drugs such as Atacand, Crestor, Lokelma and finance
department is responsible to arrange monetary resource for the production department.
Production department needs finance to buy material such as hydroxypropyl
cellulose, polyethylene glycol, lactose, corn starch, carboxymethylcellulose calcium,
and magnesium stearate, sodium zirconium cyclosilicate, a potassium binder and produce the
drugs. And finance department needs funds which comes from the increased production and
ultimately making profits.
Section 2
1. Macro environment impact on AstraZeneca Business
There are number of drivers that influence growth of the organisation political situation
of the country, economical crisis etc. PESTLE tool is used by firms to analyse such kind of
situation and frame policy accordingly.
7

Political
United Kingdom is one of political is stable country but BREXIT has impact on its
stability. Consequently there are 3 Prime Minister Changes in the country which leads to change
in industrial policy (Morgan and et.al., 2018). Pharmaceutical industry export most of raw
material from Europe side but after exit of Britain from European Union, increase tariff and
custom duties. However, COVID has affected life of human being in the country which leads to
increase in conjunctions of medicines and gives opportunity to various companies.
Positive
AstraZeneca market increases because company is in the race of making COVID vaccine.
It also increased interest of different investors in the world and increase fame of the organisation.
NHS and other types of facilities need medicine support and hence new government
encourage company to provide best quality product & services.
Negative
Firm export most of raw material from Europe side but after BREXIT increases cost of it
which decreases profit share of the company. Company also import various kinds of vaccines in
different countries of European Union but because of Britain’s exit from it, decrease opportunity
in expansion.
Certification of British government are very strict which affect firm’s business reaching
to customers and increasing market share in time of globalization
Economical
United Kingdom is one of economic stable country but after BREXIT commodity prices
increases with decrease customer capacity to purchase it (Fuller and et.al., 2016). However,
government is determined to decrease corporate tax and support local Organisation in the
country. COVID highly affected on employment sectors and large number of people unemployed
in Britain.
Positive
Decreasing corporate tax by Britain government can help AstraZeneca in providing
medicines at low price and hence increased numbers of customers. COVID has increase market
share of the company as its vaccine in final stage. It also increases Goodwill of the organisation.
8

Infrastructure continuously improved in United Kingdom which can help firm in reaching
to customer on time as well as decrease cost of transportation.
Negative
Increasing inflation and unemployment rate leads to declining in its customers and also
rising tariff of raw mater affected on growth of the firm.
Labour cost and other facilities related to them in United Kingdom is high which
decrease firm’s profit share.
Social
Rising population of the country as with different lifestyle has impact on their health.
AstraZeneca provide product relating to various diseases according to changing trends in the
country such as firm is determined to provide COVID vaccine. However, large number of people
now started focusing on exercise and health consciousness and hence decreases chances of heath
which impact on its market.
Positive
Company’s product can be purchased by growing population and also its COVID vaccine
able to improve its financial situation.
Large population of country has improper routine as well as increasing work load
increase chances of various diseases and it can become create opportunity for firm to provide
drug services accordingly.
Negative
Increasing Health awareness among people effect on firm’s product consumption level
which decreasing its market share.
Increase Yoga and other form of exercise culture in country can improve health index of
country and hence it can decrease profit share of AstraZeneca as large number of people do not
need medical facility.
Technological
United Kingdom is one of technological advance country and hence pharmaceutical
industry keep update their system and able to increase quality, efficiency and productivity of
work. AstraZeneca is one of biggest medicine & vaccine manufacturing firm in the country
hence it make quick changes in its system.
9

Positive
Advance technology increase output of the firm with quality of product and hence firm
able to increase customer satisfaction level. It also improves supply chain management and
hence product can be delivered timely.
Negative
Change in system and process require large amount of money and hence increase
financial burden on the firm which can be used for expanding business. Training and
development programs also needed for it and hence time effective.
Environment
Pollution in United Kingdom continuously increases which effect on health of many
people. AstraZeneca provided various Types of tablets for overcoming from diseases form by
such kind environment effect.Raw material of company comes from different farmlands but
because of changing environment many crops effected and hence increase cost of agriculture
supply.
Positive
AstraZeneca provide various kind of medicine for environment born disease and hence
able to increase its revenue which supports growth of the firm. Company also contribute in
environment protection by its CSR activities.
Negative
Pollution destroy various places agriculture, it increase price of raw material which
impact on purchasing capacity of the customers.
Legal
Government has passed various kinds of laws and regulation for Pharmaceutical industry.
There are number of laws introduce in the country to protect workers at work-station such as Act
related Employment, wages. Equality etc (Ding and et.al., 2018). This law are implemented by
AstraZeneca which increase its good will and workers loyalty.
Positive
It help firm in increasing loyalty of workforce which positively impact on quality,
efficiency and productivity.
Negative
10

Increase financial burden on the firm and hence decrease chances of expansion of
business.
2. SWOT analysis
It is use by the firm to understand various positive and negative sides and the way in
which it impact on growth of the firm.
Strength
Company is well known for its innovation and creativity and ranked first in it which
helps in providing best quality services at low price. Company highly invest in developing
various kinds of vaccines and medicines that can help in growth off the firm. Presently
AstraZeneca is one of leading organisation in developing COVID vaccine and it attracts large
number of investors. Company’s product purchase in different part of world and hence increase
improves its financial performance.
Weakness
Company has bad public relation which highly effected on its image and remains in
various controversies. There are experiments relating to drugs failed which effect increase
financial pressure on the firm (Remneland Wikhamn and Styhre, 2019).
AstraZeneca has number of challenges related to leadership as well as management and it
effecting growth of organization in expanding business in different part of country (SWOT and
and PESTLE, 2020). Supply chain management need to be improved for delivering product &
services in different part of globe.
Opportunities
AstraZeneca is financially very strong and there are many countries where it can expand
business using this money (Willigers, 2020). It is in final stage of making corona virus vaccine
which improves its image and hence collaborating in different countries, it can able to increase
market share.
Increasing number of internet user can help firm in expanding business by attracting them
with product as well services of AstraZeneca. It can support firm’s E-commerce business and
also reaching to customers timely. Investing in promotion of product on different online platform
will become strength for the company to reach to customers which are in different part of world
(Fern Fort University, 2020).
Threats
11

Problems in management and decreasing public relation can effect on growth of the firm.
Increasing inflation and unemployment rate can decrease capacity to purchase AstraZeneca’s
product and services (Viña and et.al., 2019).
3. Actions for firm’s growth
 AstraZeneca is financial capable to invest in number of upcoming medical facilities
which helps firm in increasing profit share in changing business
 Rather than making rapid changes in technology firm has to select one which can
support sustainable business. It decrease expenditure of AstraZeneca and maintain
financial capacity of the firm to meet future need. Also, it reduce burden on workforce
and hence they able to perform well which increase quality & productivity of work.
 AstraZeneca vaccine gaining popularity all around the world and hence it’s time to
collaborate with multiple nation for its other product too which help in increasing profit
share while globalizing.
 Effective and transformational leadership can help Company to improve public relation
which is necessary for changing business and try to avoid any kind of controversy that
can destroy its image.
 Organisation finance can be invested for developing drugs that save people’s life from
polluting environment.
 Firm can decrease dependency on European market for raw material. There are number
of country which supply pharmaceutical accessories at low cost such as India, china etc
and hence organisation will be able provide its supply to various customers
 Organisation has to improve its supply chain management which help in reaching to
customers on time and increase profit share of firm.
 AstraZeneca senior leaders has to check management issue and quickly resolved them
which increase efficiency, quality and productivity of growth and help firm in expandi
business in different part of globe.
 Supply chain management can become effective by taking help of advance technology
and hence product as well as services can be reach to customer on time and enhance their
experience towards firm. It can create opportunity for organisation to supply COVID
vaccine in different part of world timely and hence able to increase profit share of firm.
12