LCCA HNC Business: Business and Business Environment Report

This report provides a comprehensive analysis of the business and business environment, focusing on two major organizations: Alibaba and Walmart. The report begins by examining the purpose, scope, structure, and size of both companies, highlighting their competitive positions within their respective markets. It then delves into a PESTLE analysis, assessing the political, economic, social, technological, legal, and environmental factors impacting each organization. A SWOT analysis is also conducted to evaluate their strengths, weaknesses, opportunities, and threats. The report further explores the microenvironment, including stakeholder relationships, and analyzes the interrelationships between different organizational functions within both Alibaba and Walmart. The study also examines the legal structures of both companies and their impact on business practices. The report concludes with a critical analysis of the complexities of different business structures and the interrelationships of the different organizational functions, providing insights into the challenges and opportunities faced by these global businesses.

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BUSINESS & BUSINESS ENVIRONMENT

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Organizations deals with many businesses to gain a competitive advantage within the
marketplace. The organization can be of many shapes and sizes. It is very hard to compete within
the industry and give competition to any of the organization or even start-ups including
association like private, public and voluntary. Businesses rely on their characteristics in order to
attain growth in the market (Pounder, 2015). The following discussion will cover the business
purpose, scope, structure, size, and relationship with different organization functions of
organizations such as Alibaba and Walmart.
An organization that gives a high level of competition to Alibaba Group Holding Limited
is Walmart incorporation which is a multinational corporation. Both the organization Walmart
and Alibaba are analyzed within the study. Both of these organizations operate on different
platforms, nations, and genres. As per the organization size, Alibaba is known as the biggest
online shopping site. It sells a huge number of items and has an effective system of payment
known as Alipay. It is a standard means of paying the amount online. It is recognized that at the
peak event, 2.85 million transactions managed at every minute by this system of payment. This
organization targets all types of sections including the lower, middle, and richer of society
(Lindner, & Wald, 2011). Alibaba also has the scope to offer high-quality services to many
individuals through which the organization can earn huge profits and make them at the top brand
of the e-commerce industry.
The supplied product and services by Alibaba consist of retail service platforms, services
of internet and entertainment, online payment platforms, E-commerce, cloud computing, and
many other services to the individuals who are ready to pay the organization with the
convenience and accessibility attribute. This also supports the organization to leave a positive
footprint around the globe and enhance the loyalty of customers (Lovejoy & Saxton, 2012).
Walmart deals with individuals that seek for retail goods, photo services, wireless
services, financial services, and the organization is targeting many segments within the industry
and expanding its chain with many acquisitions and mergers. In 1999, Walmart acquired ASDA
to deal within the market of the UK. ASDA in 1999 owned 229 stores and presently holds more
than 600 outlets in the UK. This organization was formed for individuals that seeks household

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items at a single place and looks for prices that are affordable at a comparative level
(Podsiadlowski, 2013).
 PESTLE analysis
Political factor affects organization profitability. It varies from rapid changes. A high tax rate
reduces profits of Alibaba. Low minimum wage helps the organization to gain high profits and
its chances of survival increases. Unemployment within the nation at high-level presents that
there is an excessive supply of jobs compared to demand and individuals like to work at a low
wage and it lowers Alibaba’s cost. Alibaba is aware at low level regarding the health standards
level and reaction towards the claims of harassment which is a weakness of the organization.
Protection of the environment is important and prevails within the industry and expected from
the organizations. Technological development with new technology will support the organization
to gain popularity. It will also translate the urgency level that needed to respond innovatively
through matching the technology as the core strength.
The legal structure of Alibaba is in the extensive control of the worldwide e-commerce
operations and classified as the hierarchical. The legal structure includes basic commerce, mobile
entertainment media, and innovation initiatives. For the business practices, the responsible
person is the CEO, Jack Ma. The worldwide controller and senior vice presidents are accountable
for business practices and report to the CEO. This organization has more than 1, 00,000 workers
in the organization and a huge number of customers at a global level. According to the internal
structure, there are many important segments such as the human resource division, legal
operations, and information technology. These are liable to report directly to the CEO. Alibaba
has a strong legal structure which is backed by many lawyers who holds good knowledge
regarding law. Renewable energy is expensive. It will support the base of customers and the
organization will get the products at a premium price and present the organizational strength.
Wal-Mart's expansion depends on exploiting the opportunities of the market and handles
the weak zone. Political instability within the operating nation pushes the organization to focus
on operations and meeting the standards as core strength. High-interest rate is an economic factor
that affects the organization and supplier. It increases the cost of goods sold which affects the
pricing strategy. It provides a competitive advantage to Walmart and presents its core strength.

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Walmart has the opportunity to enhance the items of organic and healthy food. It will support
Walmart to enhance its brand image. The mobiles, laptops, and tablets will create the opportunity
for the organization to enhance sales and share within the market as the core strength.
The legal structure of Walmart is relying on attributes like function and hierarchy based
definition. It has a huge hierarchical structure with 12 members within the board of directors and
includes two Walton families. It also presents the manager’s capability to impact the
organization (Palmer, & Hartley, 2011). It is strong and critical as it holds presence within the 27
nations and operates in more than 11300 retail units with 633 outlets. Sometimes management
within the organization decides based on knowledge and organization face some loses that
present the organization's weakness. The reduction of emissions is a challenge for the external
environment of Walmart. The organization has launched the project known as the Gigaton.
Suppliers and organizations are working to avoid the one Gigaton emission. It is an
organizational strength.
 SWOT analysis
Alibaba is known as the leading player of ecommerce within the China. The business of Alibaba
focuses to create the strong recognition through the effective service quality. It has a limited
presence outside the nation and organization is expanding within the overseas and not gets
enough success within the Indonesian ecommerce website known as the Tokopedia.
Organization has the opportunity to grow new channels and increase the base of customer. It is
also partnering with many other brands at the international level to grow the business faster.
Legal pressure is also known as the main hurdle for grow at large level with the international
technology business of Alibaba.
Worldwide size of Walmart provides the organization deep pocket to expand the business and
high technology also provides it a competitive advantage. It does not have the significant
competitive differentiators. The Walmart cost leadership strategy makes the business model easy
to copy. Walmart has the opportunity to increase the standards of quality and address its
weaknesses. The trend of healthy lifestyle is the threat for the organization as many of the
organization goods are not perceived as the organic, natural, and healthful (Daniels, Radebaugh,
& Sullivan, 2012).

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 Microenvironment analysis
Organization stakeholders work for a voluntary purpose (Worthington, & Britton, 2014).
Alibaba stakeholders include employees, shareholders, management, sellers and others. These all
have own range of benefits developed by the organization's profit and loss. The third-largest
stakeholder of the organization is Blackrock Incorporation which supports the organization
within the expansion and development of the market.
Walmart stakeholders include customers, government, competitors, employees and others
that work within the organization. It delivers services to the individual by the unified selling
system. It has many external stakeholders like the government, customers, retailers, suppliers,
and competitors (Elmorshidy, 2013).
Organizational functions of Walmart support to apply the different approaches and use to
enter within the global markets. These also present the complexity of the structure to link the
different systems. The traditional management structure of Walmart also proves that it applies
the structure within the management of operations (BPP Learning Media, 2013).
 Business Function in relation to the Organizational Structure of Alibaba group
Alibaba Group
Core Commerce Cloud Computing Media and Mobile
Entertainment
Other innovative
initiatives
Retail Commerce in China
Wholesale Commerce in
China
Global and Cross border
Commerce
Alibaba Cloud
Allyun.com
UCWEB
Alibaba Music
Ali Pay
Alibaba Pictures

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The business functions of Alibaba included within the organizational structure which
helps the individual around the globe by the e-commerce services at affordable values. It also
supports the individual segments and gets services from the organization and becomes loyal to
the organization. Continuous checking of organizational profit will regularly increase at the high
rate and support the organization to increase footprint in more nations. It is known as the global
multinational organization and has many business units and executives at the top level that
control the organization's operations with different rules (Luo, & Mann, 2011).
These functions interrelations can be understood through the convenience and
dependability. This is also used by the many brand division known as Alipay, e-commerce
platform and many more. Organization payment systems are handled by the operations roots and
build an effective organizational structure by offering support to the organization and compete
within the competitive globe. The organization structure benefits also ensure the availability of
many practices for the customers and sellers. The disadvantage regarding the system with the
many facts of business is related to the business model and lacks some elements like Walmart.
Alibaba has a large structure with many numbers of members and employees at many levels.
This also supports the organization's market development and diversification with the long-time
period (Gandia, 2013).
 Business structure of Walmart and interrelationship of different organizational functions

Walmart has the hierarchical function of organizational structure. It has the two features
that are known as the function and hierarchy based definition. Hierarchy feature pertains towards
President and CEO, Wal-Mart Stores, Inc.
President and CEO,
Wal-Mart U.S.
President and CEO, Wal-
Mart International
President and
CEO, Sam’s Club
President and CEO, Global
ecommerce and
Technology

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the vertical lines of authority and command within the organizational structure. Except for CEO,
each employee has a superior. Mandates and directives come from the uppers level of
management of Walmart that implemented by middle management down towards the rank and
files thee, employees, within the outlet of Walmart. Function-based definition article of the
Walmart’s organizational structure includes employees' group that fill certain functions. It has
the department for human resource management function. It has the department for information
technology function and other department for marketing function. These all are various function
based departments within the organizational structure of Wal-Mart’s. Walmart has purchased the
Flipkart and Amazon that present the adoption of hybrid business model offline and online by
predicting the disruption of traditional retail by the ecommerce organizations. It will encourage
the e-commerce players and support to manage the retail market and indicate the pressure to
diversify its reach. It also presents the organization regulatory approval and it presents the
Walmart biggest acquisition.
Walmart has also put itself in India that has adverse impact on the large retail space of
India. In today's time, retail market of Indian customers remain unorganized and present the high
untapped opportunity for organized retail chains. India is considering bringing the regulation for
e-commerce space and allowing 49 percent foreign investment within the e-commerce
organizations that use inventory model (Begg, 2013). In recent interviews, Walmart has
confirmed that India will be directed by the supporting farmers, reducing food waste, and
development of supply chain. Walmart sells many products within many areas around the globe
and operate its work in which it has the department for research and marketing. The department
of human resource management handles the broad range of situation from the customer and
employee problems. The department of accounting helps the organization to handle the finance
within the organization and ensure the adequate margin of profit and loss. Corporation budget
allows the organization to expand its location, advertising, services, products, and employees.
Walmart matrix is supportive to the structure as delivers corporate affairs, characteristics,
finance, and development of product among other things to the corporation and structure.
Organization holds has the broad rand of product that allows accommodating customers around
the globe.

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In the limelight of the discussion, it can be concluded that it is significant for Alibaba to
expand its target base of customers and attain a competitive edge within the market and lead
position against Walmart. The organization structure of Alibaba plays an important role in the
success with the positive leadership style. This organization has different internal and external
stakeholders just like its competitor Walmart. It is also very important for the organization to
cater to the demand of every stakeholder and ensure a competitive position. It also present that
functions of Alibaba is interrelated and lies on the effective functioning. These organization
functions can be understood in an effective way. Businesses hold a connection with the system of
structure and ensure that functions of business are appropriate.

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