Business Environment Analysis: Morrisons, Virgin, and Oxfam

This report provides a comprehensive analysis of the business environment, focusing on Morrisons, Virgin Group, and Oxfam. It begins by differentiating between non-profit, profit, and non-government organizations, as well as the distinctions between small, micro, and medium-sized enterprises. The report explores various legal structures associated with different company forms and examines how legal structure, scope, and size relate to business objectives and products. Furthermore, it delves into the interrelationship of organizational functions and their connection to structure and objectives. The analysis includes macro-environmental assessments using the PESTLE framework, micro-environmental evaluations with Porter's Five Forces model, and internal strength and weakness identification through value chain analysis and the VRIO model. A SWOT analysis of Morrisons is also presented, along with a justification of how weaknesses and strengths are interrelated with micro and macro factors, influencing strategic business decision-making.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
ACTIVITY 1....................................................................................................................................3
Differences between non-profit, profit and non government organizations................................3
Differences between small, micro and medium sized enterprises...............................................4
Legal structures associated with different forms of companies...................................................5
Legal structure, scope and size of different firms link to objectives and products of business...6
Critical analysis of interrelationship of varied organizational functions and then its connection
to organizational structure and objectives....................................................................................8
ACTIVITY 2....................................................................................................................................8
Macro environmental analysis through PESTLE framework......................................................8
Micro environment analysis by using Porter's five forces model..............................................10
Value chain analysis and VRIO model used to identify organization's internal weaknesses and
strength-350...............................................................................................................................11
SWOT analysis of Morrison......................................................................................................13
Justification of weaknesses and strengthen interrelated with micro and macro factors............14
CONCLUSION..............................................................................................................................14
REFERENCES .............................................................................................................................15

INTRODUCTION
Business environment is collection of varied factors some are external and some are
internal such as supply & demand, consumers, staff members, stakeholders and government, that
impact on business practices as well as performances.
The current report is based on Morrisons and also define some information about Virgin
group and Oxfam. It explains the differences between non-profit, NGO and profit companies, the
purpose of varied firms and differences between small, micro and medium sizes enterprises.
Furthermore, this assessment justify the interrelationship of several organizational functions and
their connection to organizational structure & objectives. This study clarifies macro & micro
environment analysis, Porter's five forces model and VRIO model to identify the strength and
weakness of firm. Moreover, this report define how strength & weakness interrelated with
external factors as well as influence on strategic business decision-making.
ACTIVITY 1
Differences between non-profit, profit and non government organizations
Public organizations-
Public sector is usually comprised of companies that are operated and managed by the
government, they are able to provide better services and quality products to its consumers which
is the centre focus of public sector firms more than then earning profit. Under this sector non-
profit and profit making organizations work and operate their business effectively. Entrepreneurs
pay taxes to the authorities and this money is used to finance most of the public sectors. The
purpose of public sector firms is to cater important public services and use available resources
effectively for benefits of society (Misuraca and Viscusi, 2015). For example, Morrison is one of
the biggest supermarkets chain in UK, they operate its business all around the world and provide
better quality items to local people. The aim of this company is to give people a one stop shop
and provide them more of what they exactly want on shopping period. Morrison recognized as
non profit company considered by IRS.
Private firms-
It is different type of sector, in which organizations are run and owned by private
individuals (Daunfeldt, Johansson and Halvarsson, 2015). Franchises, sole traders and
partnerships are the examples of private sector businesses. The purpose of this sector firms is to
make profit, increase their marketing share, operational efficiencies and maximize sales year by

year. It is composed of economic aspect that are intended to earn profit for owners of
companies. In simple words, private sector organization are businesses which are not run and
owned by national authorities. For example, Virgin group Ltd, is one of the leading investment
firm along with international identify and appealing brand image within market place (Garcia-
Bernardo and et.al., 2017). The aim of this organization is quite different from public sector
companies, its purpose is to change business for good that in return provide profit and put long
term positive impact on productivity.
Voluntary firms-
Voluntary sector play vital role in society, organizations under this sector are accountable
for well-being. It is the duty of social activities undertaken by firms that are non-government and
non-profit enterprises (Alfraih and Almutawa, 2017). This sector is also known as community
and third sector, in contrast to public & private sector. On the other hand, some firms will be
accountable for assuring that it set budgets and does what it is set up to do. In certain cases they
attempt to help specific type of people like Blind. The only purpose of this sector firms is to
enrich and benefit society and help local people. For example, Oxfam work under voluntary
sector, they tackle poverty wherever they find it, include in UK as one of the richest and well-
developed nations in the world. NHOs finance their activities with the help of charity
programmes which make them able to receive money and utilize for society well fare.
Differences between small, micro and medium sized enterprises
Micro sized organizations Small sized firms Medium sized enterprises
 Micro Sized enterprises
are businesses with
assets valued and
annual sales at less
than 2 Million each
year and with less than
5 workers including
owner (Petersen,
Bruwer and Le Roux,
2018).
 Their commitment and
 On the other note,
small sized businesses
work with 1 to 100
workers, that is more
than Micro firms.
 These types of
enterprises is able to
invest in future
business growth but not
too much.
 They earn more than
 The attribute used most
often is number of
workers, small business
defined as firms with
fewer than 100 people
on the other hand
medium sized
enterprise are those
companies with 100 to
999 staff members.
 Medium sized firms are

initiative lead many
micro firms to progress
into wider entities
which comprises the
small business market.
 Micro sized enterprise
cannot be able to offer
wide number of job
opportunities to local
people because they are
not operating business
as wider than the other
enterprises.
 It is usually defined as
medium size firms, as
their earning is not
much effective than
other companies.
Globally, most micro
enterprises are family
owned businesses, they
are interested in
earning a living to help
themselves and their
families.
 These types of
enterprises only grow
its business when
something in their lives
changes, and they want
to generate much better
10 million but does not
exceed more than it.
 Small size enterprises
play vital role in
economy as they
provide employment
opportunities to people
after Brexit in UK that
help to enhance living
standard of individual
better than before
(Kubíčková,
Votoupalová and
Toulová, 2014).
 The annual turnover of
these enterprises is
more than 629,163
million as compare to
micro sized firms.
 The growth of these
firms are slower than
other, they attempt to
sustain for long term
period.
able to invest in
equipment more than 2
million but does not
exceed more than it.
 They are capable to
provide large number
of employment
opportunities to cloak
or residential people in
UK.
 The annual turnover of
medium-sized
enterprises is more than
small and micro, that is
639,322 million which
make them able to
operate and sustain
business within
marketplace.

income. In context of
size, micro sized firms
are smaller than small
and medium size
companies.
Legal structures associated with different forms of companies
Sole traders-
It is known as sole proprietorships, sole trader is type of organizational legal structure,
that is owned by one person. It is one of the simplest structure accessible for organizations,
which allow them to have full control over its business operations. It defined as business with
single owner & not registered as a partnership, corporation or limited liability firm. Sole traders
work as independent operator or run a small or large firm (Banerjee, 2015). Virgin group is one
of the best example as sole trader, Sir Richard Branson is the owner of this company who are
operating its business individually (Patuelli, 2019). Company offer many services and products
to its consumers that include mobile telephony, music, health, financial services and holidays.
Advantage- with this structure entrepreneur has power to full control on overall and day to day
activities. Disadvantage- negative aspects of sole trader is that it may be difficult to accept and
bid wider contracts.
Partnerships-
This is the another type of legal structure that is associated with public sector
organizations. Partnership structure adopt by those firm who are operating business with co-
owners and share its net income equally along with risk as well. Partnership structure is formed
through handshakes and oral agreements, as well as written that can be the best chose in event of
lawsuits & disputes between partners (Lee, Kozlenkova and Palmatier, 2015). Pros- One of the
main advantages of this structure is lack of formality compared with organizing as well as
managing a limited firm. The accomplices can consent to make organization verbally or recorded
as a hard copy. There's no compelling reason to register with organizations House & enlisting the
business organization for tax assessment with HMRC is very simple. Cons- this structure has no
autonomous lawful presence particular from accomplices. As a matter of course, except if an
association concurrence with elective arrangements is set up, it will be broken down upon the

renunciation or passing of one of the accomplices. It modification can cause uncertainty, occupy
consideration from building up the business and will frequently not be favoured outcome of the
rest of the accomplices.
Private limited firms-
It is one of the latest organizational or legal structure for companies, it recognized a
hybrid as limited liability firms can be formed as corporations (Kotlar and et.al., 2014). Private
limited companies can cater owners, who are mostly referred to members under this structure,
protection from liability as well as other obligation. This structure is connected with Virgin
Atlantic a trading name of Virgin Atlantic airways limited. It is a British Airline, established in
1984 and was originally planned by co-founders Alan Hellary and Randolph Fields to fly
between Falkland Islands and London. Cons- one of the disadvantages of this structure is that it
restricts transferability of shares by their articles. Pros- one of the advantage of this legal model
is that members are well known to each other, on the other hand control is in hand of business
owner of capital.
Legal structure, scope and size of different firms link to objectives and products of business
Size and Scope of different companies-
Virgin Group-
It is known as one of the most irresistible brands in the world, company has expanded
into several diverse sectors from health to banking, travel to health and music to
telecommunications leisure (Naughton, 2019). Organization operate more than 60 Virgin
organizations all around the world and employing approximately more than 50000 workers in 50
nations. From 1970 to current period, virgin group attained success and growth to serve their
existence purpose, operating as a brand is one of the most essential aim of this company. The
annual sales of organization is more than of 4 billion.
Morrisons-
Firm size and scope is measured by considering their operational range and business
locations in different nations (Tran, 2014). They employ more than 110,000 workers and serves
around 11 million consumers each week. Morrisons have 491 stores in UK, recently it is fourth
biggest supermarket in nation with their headquarters in Bradford. Firm is engaged in operation
of retail sector supermarket outlets under brand name associated activities. They had many

superstores across Wales, Scotland and England, as well as Gibraltar, which is the chain only
outside of Great Britain.
Oxfam-
Oxfam is confederation of 19 independent charitable firms focusing on alleviation of
world-wide poverty, it is a non-profit group with a large collection of operations. Along with
this, firm also focus on disaster relief, advocacy, policy research and pro-migration. With 77 staff
including temporary and secondment staff they provide its services to local people. Oxfam run
business operations in America, Australia, Belgium and Canada (Hutchings, 2014).
Connection of legal structure and other things with business objectives, goods and services-
The legal structure, scope and size of three organizations discussed above which directly
connected with their business objectives and services offered by them. For example, the
objective of Virgin group is to earn profit by offering its range of products and services to
people. They work accordingly and focus on improving operational efficiencies rather than
before because it helps to earn more money.
Furthermore, size and scope of organization are linked to objectives and products,
company operate with partnership legal structure, they focus on quality of goods more than just
increasing profit. While managing different operations the management of organization work
according to the set objective and provide things according to the needs of target market.
 It is fact, that small or medium companies have sole trader legal structure because it does
not require more people to manage their activities.
 Business objectives of companies such as NGOs, non profit and profit will have impact
on types of legal structure they can have. As their business practices affect structure
positively, it helps to work with benefits get from structures.
 The objectives of organizations will impact on legal structure as it helps to increase their
operational efficiency rather than before. With the help of objectives, companies gain
competitive benefits.
Critical analysis of interrelationship of varied organizational functions and then its connection to
organizational structure and objectives
Organizational functions is the main procedures of activities carried out within a
administration of company. The most common functions include, marketing, production and
other that work together for achieving organization aim and objectives.

Production and marketing-
Marketing department or function is the main section of any company, they are
accountable to promote business products and drives sales of goods more than last years.
Production is another function of firm that relates to physical output of manufacturing
procedures to factors of production (Polonsky and et.al., 2014). Marketing and production
function work together as it can be said that there are some interrelations between both
department. For example, marketing section provide information to production for
manufacturing products according to the needs of consumers because they knew about the
preferences of target market. By working together both function effectively achieve organization
objectives and satisfy the needs of customers as well as effectively meet with their expectations
regarding products.
Advantage-
When production department communicate with marketing in effective manner, they can
satisfy needs of clients.
Disadvantage-
When the coordination between marketing and production was poor, it affects sales and
consumer base.
Information technology and marketing-
Information technology (IT) is another organizational function that work more closely
with marketing because they are able to solve technical issues within technologies used by
marketing function, which make them able to create content for business promotion within target
marketplace. Furthermore, by working together marketing and information technology sector
gain the attention of people available within market that help to increase sales because they can
buy things in exchange for money (Kang, Rhee and Hyun, 2015).
On the other hand interrelationship between above function, leads to miscommunication
because they cannot be able to communicate and work in collaboration at same time.
Advantage-
The benefits of marketing and information technology department see in term of
managing technologies or system while promoting brand within marketplace via social media
and other digital marketing tools.
Disadvantage-

Lack of coordination and collaboration between these two departments directly impact on
business activities as firm is unable to increase profit by selling number of goods.
Marketing and HRM-
Marketing department work closer with human resource management section, as they
create job advertisement strategies and plans for hiring new applicants. HRM communicate to
marketing manager, for this reason.
Advantage-
The benefit of this relationship is that organization can obtain skilled and talented
applicant from talent pool.
Disadvantage-
It create conflict in workplace when miscommunication between both department give
negatives results as they would not hire right candidate.
ACTIVITY 2
Macro environmental analysis through PESTLE framework
Political factor-
Political stability and instability is included in political factor that directly impact on
profitability and operational activities of company negatively. Brexit is one of the major factor or
political event that influence upon business growth and income. Morrisons business get affected
due to Brexit because it changes the overall trade policies as well as regulations which is not
suitable for organization trading practices. EU exit form UK, this act makes changes in trade
policies between two these countries which affect on retail sector. UK's government restrict retail
firms to trade in specific nations, do to this thing they had to make a trade agreements and follow
the rules mention under it which is quite difficult to do (Briefing, 2017).
Economic factor-
Change in inflation rates, increase number of unemployment, foreign exchange rate and
GDP are the economic factors that affect business and its activities. These elements are the main
point of focus for Morrisons as they are most likely to increase costs, profits, demand and prices.
Due to ongoing financial instability in the UK after Brexit, government encourage Morrisons and
other firms to create jobs for local population (Belke, Dubova and Osowski, 2018). It impacts
positively on company as they can hire or chose skilled people who are able to contribute in
achieving business goal and enhance productivity as well as profitability of firm. As Morrisons

plays their vital role in bringing employment chances, it in turn increase demand for their goods
and diversifies their workforce which is quite beneficial for them.
Social factor-
Population always follow the trend, which directly impact on selling and production
activities of company, as it is impossible to identify changing trends effectively all the time so it
impacts negatively on firm (Zaheer, 2019).
Technological factor-
This factor impact positively in term of increasing profit and enhance productivity better
than before (Gutierrez, Boukrami and Lumsden, 2015). Technological advancement is one of the
factor that contribute in enhancement of marketing practices and supply chain management. It
brought different new opportunities for Morrisons which they can use to supply goods
effectively and also use in context marketing for example, social media and digital marketing
tools are the best technologies that help firms to generate revenue and increase consumer base.
Legal factor-
Government legislations and policies also directly affect Morrisons performance. For
example, changes in employment law impact on current employment policies of organization
(Kenny, 2018). To facilities this policy, Morrison provide their employees facilities according to
law. They offer salary package based on qualification and abilities of applicants without making
differences based on age, race and gender (Kenny, 2018).
Environmental factor-
Increased pressure on firms by UK government to address environment problems and to
adopt ways of business which what would advantage society put positive impact on Morrisons
because they already committed to reduce its carbon footprint and contribute to save
environment. Firm is decreasing waste produced in their outlets by increasing social conscience
in clients.
Micro environment analysis by using Porter's five forces model
Bargaining power of consumers-
The degree of this force is high. The bargaining power of buyers in supermarket sector of
UK is relatively high which impact Morrison and its sector to be more profitable and attractive
for exiting. Customers are able to lower down the cost of products, but they can switch from one
firm to another as products within this sector are mostly differentiated. The number of consumers

within market is high, when people switch to other company it affect Morrison profit margin as
they cannot be able gain attention of new customers more than before.
Bargaining power of suppliers-
Suppliers play vital role in business performance and supply chain activities, they are
able to provide high quality goods from manufacturer at good price to retailer or distributor such
as Morrisons for resale. The bargaining power of suppliers within retail sector is low because
there are number of more suppliers available, with them company can communicate and work. It
means that suppliers of Morrisons have less power to increase the prices of raw materials or
products that affect positively on net worth of its business. The goods that suppliers cater are
fairly standardizes, have low switching costs and less differentiated which makes it easier for
retailers such as Morrisons to switch suppliers. It makes braining power of supplier as low force.
Threat of new entrance-
The degree of this force is low. Threat of new firms in retail sector is determined by
barriers to entry, it is very difficult for a new organization to enter into UK supermarket sector,
making it very attractive for existing organizations. Morrisons, ASDA and other firms build their
strong brand image within marketplace which is quite difficult for new companies to acquire as
they cannot be able to overpower all of them that reduce threat of new entrance. In addition,
opening a new business as big as Morrison may cost hundreds of million of pounds with no
assurance of success, it poses threaten for new enterprises.
Threat of substitute products or services-
The level of this force is low, because there are few substitutes goods available in market
produced by supermarket sector in which Morrisons operates since for so long (Spethmann,
2016). Few substitutes that are accessible produced by low profits earning sectors, that means
there is not selling on maximum income that companies can earn in retail industry. All of these
elements make threat of substitutes services or goods lower force. It does not increase the profit
margin of company but help them to sustain for longer. Within retail industry, the substitute’s
products are not too much, as it unable to affect Morrison goods or productivity.
Competition among existing player within sector-
Rivalry among existing firm is extremely higher in UK supermarket sector, therefore, it is
a less profitable sector for existing organizations such as Morrison. While Morrison, is fourth
market leader, the competition between firms enhance their operational efficiencies and drive