Business Environment: UK Supermarket Sector Analysis Report

This report provides a comprehensive analysis of the business environment, beginning with a differentiation between profit, non-profit, and non-governmental organizations, exploring their structures, functions, and impact on the economy. It then delves into the size and scope of various organizations, comparing micro, small, medium, and large enterprises, and examining their market share, profit share, growth, and sustainability. The report further investigates different organizational structures, including financial structures and transnational, international, and global structures, along with their associated complexities and preventive measures. The second section focuses on a case study of the UK supermarket sector, applying PESTLE analysis to identify the positive and negative impacts of the macro environment. It also conducts a SWOT analysis and utilizes the external Five Forces Model to assess the strengths, weaknesses, opportunities, and threats faced by UK supermarkets, explaining the interrelation between strengths, weaknesses, and external factors. The report concludes with an overview of the UK retail market, highlighting the influence of political factors like changes in governmental policies, taxation, and legislation, and their impact on the industry.

Business & Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
P1 Differentiating between profit, non profit and non governmental organisations..............1
P2 Size and scope of the organisations...................................................................................3
P3 Different kinds of structures and functions.......................................................................7
SECTION 2 Case Study- The UK Super market Sector..................................................................7
P4 PESTLE and identify the positive and negative impacts the macro environment has upon
the UK retail sector.................................................................................................................7
P5 SWOT analysis and external Five Forces Model of a UK super market to identify the
strength and weaknesses. .....................................................................................................10
P6 Explain how strength and weaknesses interrelate with external macro factors. ............11
CONCLUSION .............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business environment refers to the combination of internal as well as external factors that
are directly or indirectly affecting the operations and functionality of the organization (Sullivan
and Gouldson, 2016). The interaction may be direct or indirect and these involve various number
of factors as well which are being considered and are given importance in the business
environment. Some well known examples of this can be classified as customers, employees,
supply, marketing, sales etc. The report is about different organizations such as small, medium,
large etc. The influence of macro environment on different sectors have also been included.
Some frameworks such as Pestle etc. can be used in order to identify various strengths and
weaknesses of the organization.
SECTION 1
P1 Differentiating between profit, non profit and non governmental organisations
There are different types of organizations such as profit, non profit, non governmental
organizations etc. Every organization has a different impact on the overall economy of the world.
Discussing the differences between them as under :
Profit organizations Non Profit organizations Non governmental
organizations
 Profit organizations are
considered as the firms
in which the basic
target is to achieve
sources and means to
gain a higher rate of
productivity.
 Rather than focusing
on the fact of helping
the people and
communities, the only
goal of profit
 Non profit
organisations are
considered as the firms
in which the focus is on
providing help and
support to the ones in
need. Rather than
keeping their focus on
money, the actual focus
is on providing help
and support to
individuals.
 Non governmental
organisations are
considered as the
organisations that are
also referred as NGOs.
 Usually, these are also
considered as the non
profit organizations
because the funding of
such firms is done by
sources like donations
etc.
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organizations is to gain
profit by various
means. Also, it can be
said that their only
concern is to achieve
money (Hamilton and
Webster, 2015).
 All the policies of
profit organizations are
profit oriented. It is
because they plan and
work with the target of
gaining a higher rate of
productivity.
Increasing the revenue
of the firm is the first
priority of profit
organisations.
 Profit organisations
make use of various
tactical features in
order to attract a higher
rate of customers so
that they can become
able enough to gain
higher revenues as well
as higher interests.
 Some very common
examples of profit
organizations are
considered as Google
 Some well known and
common examples of
non profit
organisations can be
considered as
charitable organisations
etc.
 These are developed
and initiated in order to
perform some social
cause. Although they
have some limited
sources for the
financial help but still,
they try to provide the
support and help in the
available funds only
(Hair and et.al., 2015).
 A very common
example of this can be
considered as the
American Red cross.
 The main purpose of
non profit
organisations is to
provide an efficient
amount of support to
the people who are
actually in need.
 The supply of services
and goods is also done
 There are some
volunteers who
participate in such
organisations and then
provide all the help and
support to the people.
 The purpose of NGOs
is to provide proper
support without
considering any sort of
benefit, financial
support etc.
 They supply all the
products and services
with the funds they
have achieved through
means of donations etc.
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etc.
 The purpose of profit
organizations is to
achieve a higher rate of
productivity and that is
the reason the supply
of services and goods
are being done in a way
that it can be able
enough to attract higher
number of customers,
so that they can gain a
higher range of
productivity as well.
in a way that with all
the funds they have,
they perform all the
operations and supply
in an effective way.
P2 Size and scope of the organisations
Difference between micro, small, medium sized and large enterprises & Market share, profit
share, growth and sustainability of each.
This is to compare the nature and scope of micro, small, medium as well as large scale
entities as specified below-
Basis of
difference
Micro
organisations
Small enterprise Medium sized entity Large scale
establishment
Scope and
Size
 This is to
differentia
te on the
basis of
the total
number of
employees
in such
micro
 It together
represents
another level
of micro
businesses
with nearly
10-50
employees to
run their
 A medium
sized
enterprise
consists of
no more than
250
employees
who are
responsible
 Such type
of
establishm
ents is
known to
have a
large set
of
employees
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sized
businesses
where it is
no more
than 5-10
people
involved
in its
operation.
functions. to handle its
business
related
operations.
who are
nearly
more than
250 or so.
Nature and
type of the
businesses
 These are
mostly
privately
owned or
represents
a family
business
structure.
 These are
sole
proprietary
businesses
that are
independentl
y owned or
can be in the
form of
corporations
or
partnership
businesses
(Hamilton
and Webster,
2015).
 The structure
of medium
scale
enterprise
varies from
the interest
of the
stakeholders
and can be in
the form of
sole
proprietary,
partnership
or
corporations,
etc.
 These are
large scale
organisati
ons that is
mostly in
the form
of big
corporatio
ns usually
owned by
either a
single
individual
who is a
big
entreprene
ur or more
than 2-3
partners
running a
corporate
business in
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partnershi
p.
Investments  In terms
of
investmen
t, micro
businesses
initiate the
business
with a
very
minimalist
ic capital
amount.
 These are
usually
divided
into 2 vital
industries
of
manufactu
ring and
service
based
sector,
each
having a
discrete
terms of
investmen
t.
 This type of
organisation
is also
known to
have a very
restricted
investment
and limited
revenue.
 In
manufacturin
g sector, a
small sized
business is
elected to
invest more
than 27
thousand
pounds but
no more than
5, 45, 000
pounds.
 Likewise, in
service
sector
industry,
they are
allowed to
invest up to
 Medium
scale
companies
can invest up
to 10, 91,
000 pounds
with a
minimal
investment of
5, 45, 000 in
manufacturin
g industry.
 Similarly, in
service
sector, there
is a permitted
investment of
up to 2, 18,
000 pounds
and no more
than 5, 45,
000.
 Large
scale
businesses
are not
restricted
with any
such
specific
amount
and can
easily
invest
more than
10, 91,
000
pounds.
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 This is for
instance,
in
manufactu
ring
sector,
these
companies
do not
invest
more than
27
thousand
pounds
and up to
11
thousand
pounds in
service
based
sector.
2, 18, 000
pounds with
a minimum
of 11
thousand
pounds.
Market
share and
growth to
contribute
in the
economy
 In terms
of growth
and
market
share,
such type
of
businesses
largely
contribute
 Small sized
businesses
are also
contributing
in nation’s
economy by
offering high
number of
jobs and
other
 Medium
scale
businesses
are known to
earn a huge
amount of
revenue by
which they
make
aggressive
 The
developme
nt of large
scale
organisati
ons is also
high in
compariso
n to others
with a
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s in the
developm
ent of
emerging
countries
by adding
value to
its
economic
condition.
occupational
opportunities
.
expansions
and hire
more number
of
employees.
high
amount of
shares and
revenues
in the
market.
 It thereby
makes the
greatest
contributio
n in the
overall
economy
of UK.
P3 Different kinds of structures and functions
On the basis of scope and size of the operations, there are different types of structures
that are based on these aspects. A very common example of this can be considered as the
financial structure. This is categorized as a very common structure that is divided into various
sub parts and usually, these are based on the specified size and scope of the operations only.
There are various organizational structures and some well known examples can be
classified as transnational, international and global structures. As there are various benefits of all
these structures, there are some complexities as well. For managing these, various preventive
measures can be involved in order to resolve the complexities as soon as possible.
SECTION 2 Case Study- The UK Super market Sector
P4 PESTLE and identify the positive and negative impacts the macro environment has upon the
UK retail sector.
UK super market is dealing with huge market and product and services. They have been
increasing in more fast manner and provides the best productive sources. UK retail market is
enormous and influential (Boyd and et.al., 2017). There are around 91,509 retail stores. Among
some are more popular and best having the best quality such as Mark & Spencer, Asda,
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Sainsburry, Tesco and many more. They are dominating the retail market and earn the best
productive profit margin. UK super market is the one of the established market which
contributes large number of national income. During the last 30 years food retail corporations
expanded their activities to serve various consumer goods. All popular and market expansion
retail stores are offering high product quality through many customer get attract. On the other
sides, they also facing external business environment effects due to some changes and
challenging in the market.
PESTLE Analysis
Political Factor: Political factors influence from changes in market environment due to changes
in governmental policies in interest rates, democratic rates etc. future political decisions
concerning taxation or the retail industry legislation (Charter, ed., 2017). All the sup[er market
industry or an organization require adopting all changes in the policies in order to get the better
environmental growth. More part, current taxation or the retail industry legislation will definitely
have an impact in the industry competitors policies and strategies. Along with, there are other
some factors which impact on the super market industry such as competition, employment,
environmental, food and grocery, financial services and health issues. Specifically, retail stores
should obliged to adopt hygiene legislation set by the food standards agency and the equivalent
European union regulations.
Economical : It is the another significant factor which impact on the supermarket companies.
Economic factors incidents and situations affect the food retail, clothing and other grocery
market. Mainly due to ups and downs in inflation, interest rates, unemployment, monetary issues
and financial crises affect the overall, company structures. Apart from that, it will also impact on
the profit margins of the company. It will be given more enhancing and more target marketing
activities in order to deal with the external environmentalist financial crises has definitely
brought many changes in the retail organizations (Gong, Simpson, Koh and Tan, 2018). Effect of
financial crises directly impact on demand and supply of the company. Besides, due to high
prices customers also give less interest on the product and services. In economical crises'
consumers invest less on the product and services and try to take cheaper goods and services.
Under this situation profit margin of the company will get down. This gives impact on the heavy
destination to reach the goals. Another factor in economical is price competition between all
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rival firms. This factor might be affect company sells. UK supermarket facing high pricing
competition through they get attention of consumers.
Social: it is the most distinct factor among all others. Social factor affect overall industry
or company image. UK super market ensure the best services to society through they maintaining
their long term stability in the market. Besides, social sector affect overall industry by
demographic, lifestyle, culture and population trends (Hair Jr, and et.al., 2015). Societal factor is
totally based on current trends. For earning good profit revenue UK super market needs to adopt
the best trend and productive growth to grab the buyers' attention. Apart from that, it will also
affect the overall process of making good task oriented in order to make sure the better quality
services. Social factors directly impact on the industry product and services if it is not according
to them. For that, company make sure their providing services or quality level. On the contrary,
society health and safety issue is another most concerning and affecting factor through company
can affect mostly.
Technological: Technological factors are the productive factor which provides better
quality services and flexibility to consumers or industry as well. It also provides better objectives
and target goals. More apart, supermarkets in the UK took advantage of advanced technologies.
It helps to reduce the personnel costs while they are able to advertise almost free and make
consumers aware of their costs. Technological impact has been given great changes and enhance
the quality assurance in the product and services. UK supermarkets has adopted various digital
technologies in order to promote their brand and logical constraints. It also provides the best
level of quality good and services (Hamilton and Webster, 2015). More apart, it will be given
more challenging and advanced technology to take better growth market.
Legal: legal factors of external environment has been given direct impact on the overall industry
if company or an organization fails to adopt legal implication on business activities. It will be
more challenging for the industry to make sure their in nor negative happened occurred in the
business (Heasman and Lang, 2015). For that, UK Government is very strict to adopt best and
safe environment to secure the consumer interest and better quality of working environment.
Through companies stable their image in the market.
Environmental: it is the another factor of external environment under which market
changes their function on the basis of different situations has been changed on the basis of
customer preferences and enlarging performance. Environmental structure is the long term
9

market which enhance the better performance level. Environmental restrictions imposed by in
country governments sustainable resources CSR Corporate social responsibility is very much
necessary to adopt better environment (Kew and Stredwick, 2017).
P5 SWOT analysis and external Five Forces Model of a UK super market to identify the strength
and weaknesses.
SWOT analysis
Strength
 Big market expansion.
 Deals with huge variety of product and
services.
 Offering best prices with the best
quality of services.
Weaknesses
 High competition level.
 High dependency on customer needs
and wants.
 Overlapping of business activities.
Opportunity
 Technological advancement.
 Employee productivity.
 Business expansion.
Threat
 Threats of new entries.
 Heavy competition in the supermarket.
Five forces Model of Porter's
Bargaining Power of buyers: UK supermarket spread in wide term many big retail companies
dealing with high profit margins. There are many players who compete with each other. It is
important that with whom they adopt the better opportunity and growth. Besides, bargaining
power of buyers are high in UK super market (Sullivan and Gouldson, 2016).
Bargaining Power of suppliers:Super market in UK has widely expanded in so many terms it
makes better advantage and growth for the country to get better resources from their strong
suppliers. Due to heavy demands of material or product and services. More apart from that, it
will be given great impact on the company structure in order to make the better among all
different goals and techniques it's also help to implement the long process of working.
Threats of substitutes: Threats of substitute products has also been the better opportunity and
growth. Moreover, it will be going the best productive. Grocery business offers broad along with
it will be more challenging and effective growth market. Supermarket involves high brand
products and substitutes (Sullivan and Gouldson, 2016).
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Threats of new entries: UK super market has been always in the middle of the subjects
concerning corporation presentation, global rivalry, price wars and alternations in plan. Many
super market having strong image in the market such as M&S, Sainsburry, Asda and Tesco. So
in terms of threats for new companies it is required or very taught to compete with all those big
brands.
Rivalry among competitors: Rivalry among competitors are involves huge market. Due to
competitors image and products its affect other companies profit margin. Moreover, it provides
better opportunity growth.
P6 Explain how strength and weaknesses interrelate with external macro factors.
Strength of the UK super market has been wide and enlarging. It provides huge market
share in terms of enhancing the economy growth (Sullivan and Gouldson, 2017). More apart, it
will also provide best growing target market plans. Strength will help to take better decision
making approach. Along with that, strength will help to reduce the company weaknesses in order
to provide the better target goals and effective management tools and techniques. Companies
always ready to introduce new activities and best offering services to meet the needs of
organization (Tidy Wang and Hall, 2016).
CONCLUSION
From the basis of above section it can conclude that business environment play a very
significant role in order to analyse the external or internal environment in order to meet the needs
of organisation objectives. Business environment introduce new trend and customer requirement
through company get better resources. Business environment analyse the business opportunity.
On the contrary it also provides some restriction from the factors such as political, legal, social,
environmental, technological or economical. Present study based on UK supermarket and their
strength and impact on the UK economy. It also helps to influence the better opportunity and
growth.
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REFERENCES
Books and Journals
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leadership. Routledge.
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
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sustainable performance metrics and its effect on business decision making: Theory and
practice. Resources, Conservation and Recycling. 128. pp.155-166.
Hair Jr, J. F., and et.al., 2015. Essentials of business research methods. Routledge.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Heasman, M. and Lang, T., 2015. Food wars: the global battle for mouths, minds and markets.
Routledge.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Sullivan, R. and Gouldson, A., 2016. Comparing the climate change actions, targets and
performance of UK and US retailers. Corporate Social Responsibility and Environmental
Management. 23(3). pp.129-139.
Sullivan, R. and Gouldson, A., 2017. The governance of corporate responses to climate change:
an international comparison. Business Strategy and the Environment. 26(4). pp.413-425.
Tidy, M., Wang, X. and Hall, M., 2016. The role of Supplier Relationship Management in
reducing Greenhouse Gas emissions from food supply chains: supplier engagement in the
UK supermarket sector. Journal of Cleaner Production. 112. pp.3294-3305.
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