Business Environment Analysis: Micro and Macro Factors and Strategies

This report provides a comprehensive analysis of the business environment, examining both micro and macro factors that influence organizational operations. It explores the structure and size of various organizations, including sole proprietorships, partnerships, and limited organizations like Associated British Foods Plc and IKEA, evaluating their objectives and how they align with their structures. The report delves into the positive and negative impacts of the external environment, such as technological advancements and government regulations, and their effects on business operations. It also applies PESTLE and SWOT/TOWS analyses to identify strengths, weaknesses, opportunities, and threats, providing insights into strategic decision-making. The report concludes by summarizing the interrelation of strengths and weaknesses with external macro factors, offering a practical framework for businesses to adapt and thrive in a dynamic market.

Running head: BUSINESS ENVIRONMENT
Business Environment
Name of Student
Student ID:
Name of University:
Author’s Note:

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Table of Contents
Introduction:....................................................................................................................................3
P4. Identifying the negative and positive impacts in the external environment of the operations,
with examples..................................................................................................................................4
Scope and Size of several types of organizations:.......................................................................4
Evaluation of size, capacity and structure of different forms of organization that are involved
with the products and services and the objectives of the organization........................................4
Relationship between several functions of organization and their association with objectives
and structure:...............................................................................................................................5
a. Divisional Organizational Structure:...................................................................................6
B. Matrix Structure:.................................................................................................................7
Merits and demerits of inter-relationships between impact on the structure of the organization
and the different organizational purposes....................................................................................7
Identifying the positive and negative impacts of the business operation through the external
environment:................................................................................................................................8
P5. Conducting micro and macro analysis of the organization to identify the strengths and
weakness..........................................................................................................................................9
PESTLE Analysis:.......................................................................................................................9
P6. Explain how strengths and weaknesses interrelate with external macro factors....................15

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Interrelation of strength and weaknesses with the external macro factors:...............................15
Applying SWOT/TOWS analysis and justification of it in decision-making:..........................17
SWOT Analysis.....................................................................................................................17
Conclusion:....................................................................................................................................18
References:....................................................................................................................................19

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Introduction:
This report takes into account various kinds of business and environment where they
generally operate. Business environment takes in both the macro and micro environment. This
report would also be taking into account the ways these factors would be interrelating with each
other and the ways they help in the organizations to develop new strategies along with improving
on the existing ones.
There are various kinds of organizations like:
Sole trading organization: The sole trading organization can be defined as the institution that is
being exclusively owned on private basis and sustained by a person who is responsible for
bearing the losses and profits of the organization.
Partnership Organization: This is the kind of organization that is being administered taking in
two or more people sharing all the profit and loss of the company, like FAB.
Limited Organization: These organizations are the ones where the transfer of ownership can be
conducted easily by the Board of Directors. For instance, Associated British Foods Plc; would be
considered for this paper ass the limited organization related with factors of safety in food, and
for the purpose of the sole trader the paper would deal with Zaffirson food.
It has been noted that the purpose of Associated British Food Plc is the sustainable and
strong position of leadership within the marketplace along with offering of various category of
food items to the customers (Wooten and Hoffman 2016). The purpose of Zaffirson food is in
providing fresh food products to the consumers and maximizing of the revenue on sales.

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P4. Identifying the negative and positive impacts in the external environment of the
operations, with examples
Scope and Size of several types of organizations:
The dimension of the Associated British Foods Plc is being formed with approximately
more than 1000 employees. They are further boosted by revenue of £12,800 along with operating
revenue of £947 million. Their work scope is in serving nationally along with their global
customers through their varied segments in business like retail, agriculture and grocery. In case
of Zaffirson, it is very small, consisting of only ten employees with revenue figure standing at
£17000 with operating income showing £950. Their work scope lies in the fact of serving various
types of food along with items of beverages to the national customers and earning huge profits
from them (Grade 2013).
Another organization taken in for this assignment is IKEA which is a big organization
having its existence across the globe employing many and having revenue that is worth noting.
Their furniture has been doing good business everywhere it has expanded.
Evaluation of size, capacity and structure of different forms of organization that are
involved with the products and services and the objectives of the organization
Any organization’s size and extent are associating with the business organization’s goals
where it has been seen that organizations generally set bigger targets within their objectives only
when they possess a good organizational configuration. As per Schaltegger and Wagner (2017),
if an organization boasts of fewer people within their business structure with no one having apt
knowledge concerning their responsibilities and that of their subordinates, then it becomes
difficult for these people to accomplish their goals for less clarity within the roles. On the

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contrary, any business organization that is in the habit of setting their objectives based on the
size, big money is being invested for them to set bigger targets. However, as per Kim and Li
(2014), it has been witnessed every organization has certain widespread objectives for the
purpose of serving their customers and earning of profits, though the level of profit differs with
the organizational size. For instance, Zaffirson food would be setting smaller targets related to
their objectives, whereas, Associated British Foods Plc would be setting bigger targets as their
purpose.
Organizations have been setting their objectives for business through reviewing their
scope for the business. If the organizational scope is in serving the national level of customers,
then the organizations would be setting their objectives consequently. On the other hand, if their
focus is in serving the global customers, then their business objectives would be according to that
factor. If the organization is of the notion that their product or service does not necessitate
massive structure of organizations, then they do not generally set those. On the contrary, if the
business scope for any service or product is vast only then an organization would be creating a
scope, or else, they would be creating an organization of small sized nature (Crane and Matten
2016).
Relationship between several functions of organization and their association with objectives
and structure:
The structures of the organization are mainly dependent upon the function of the business
as organizations are in the habit of making the structure of the organization along with objectives
based on the responsibility they provide to customers. Associated British Foods Plc has been
generating objectives for augmenting organizational productivity and creating an efficient
congregation of organization for maintaining a reputable movement of commands within the

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organization. The function of business within Associated British Foods Plc is for the purpose of
serving the customers with the services and products along with upholding a homogeny along
with the control of the organization. The company can maintain consistency through proper
control and monitoring of their business through their structural formation. It has been observed
that Associated British Foods Plc can accomplish better functionality if all the people associated
with a project possess proper knowledge related to his or her role and responsibilities (Grade
2013). Thereby, efficiency within the setting of the authentic objective and structure of the
organization might assist Associated British Foods Plc in attaining functions of the organization
as it assists employees in knowing regarding their responsibilities with efficiency.
IKEA has been a profit making organization having a goal of regular improvement in the
standard of living of its customer. The structure of the organization takes into account an
understanding of the line of authority along with other responsibilities and rights of
communication at various organizational level (Hobley et al. 2015). IKEA has been adopting a
formal structure of organization where two of the structure of information exchange has been
operating between the external and the internal environment. It adopts processes of standard
policies and culture. It is important for the company in adopting its structure around the function
it has. There are availability of certain types of organizational structures that are being planned as
per the functions and objectives of the organization. These take in:
a. Divisional Organizational Structure:
In this function of the organizational structure, the business is being divided as an
exacting group or branch based on the product, market, geographical or the service group. Each
division tales into account a complete function set, having their own head for carrying all the
functions in attaining of the objectives of organizations (Smith and Rees 2017). This structure

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facilitates divisions in focusing on certain particular product or service through a leader.
However, structures of divisional organization at times might invite office politics instead of the
strategic thinking offering views over the attainment of the organizational objectives.
B. Matrix Structure:
Some of the organizations do go for this matrix structure that is stated to be more flexible
than some of the others. Under this each of the employees would be working within a department
that is function based like the human resources or the marketing department and they are
required to work under a group or team on certain particular projects. The team would be
comprised of employees from various functional areas. This can be stated as an amalgamation of
the divisional organizational structure and the functional organizational structure. This structure
is generally been adopted by many of the organizations for the purpose of the needs of the
organization. The structure of matrix organization assists in improving the system of
communication through effective information exchange. Departments need to work together
along with communicating with each other in solving the issues. This exchange of information
before the decisions brings in internal complexities signifying that employees are at times
confused about whom to report (Ashkenas et al. 2015).
These organizational structures have their own advantages and disadvantages. Business
organization needs to accept one of the structures of the organization according to the objectives
along with the work profile.
Merits and demerits of inter-relationships between impact on the structure of the
organization and the different organizational purposes
Merits:

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Inter-relationship of employees amidst various functions of the organization assists any
organizations in maintaining cooperation. It also helps in up-surging of connection between the
employees and augmenting efficiency within the business. It escalates the level of profit because
each employee of several purposeful departments sharing their information.
Demerits:
Every employee from several branches should know and understand the responsibilities
attached with their jobs along with the operations of other branches for them to exploit those
information in harming that branch. It amplifies the competition factor among various functional
branches.
Identifying the positive and negative impacts of the business operation through the external
environment:
In the macro environment, new risks have always been appearing and for the
organizations it becomes harder everyday in identifying the same. In case of retail organizations,
it is not probable for any organizations in rejecting the modification as they ascend and adapting
those transformations (Real, Roldán and Leal 2014). Macro environments take into account
economic, societal, governmental and technological persuasion. Technology does have various
vigorous and unconstructive impacts on the operations of the business.
Advancements within the technological aspect can offer various opportunities in business
to the Associated British Foods Plc if they are able to take it. Technology has the ability in
opening up of the networks of home shopping, new markets of retail, web-based retailer and
other markets of online, offering added online market to any sort of organization (De Villa,
Rajwani and Lawton 2015). Therefore, it augments point-of-sales in increasing sales by

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facilitating any of the organization to route debit and credit card classification along with cash. If
Associated British Foods Plc is not able to pertain efficient advancements in technology they
might lose out on their competitive development. Policies along with various regulations of
government might have positive and negative influence on the business. If the government helps
the company through provision of various supports like subsidiaries and loans, helping them in
establishing their organization in a positive way is the need of the hour. On the other hand, rates
of tax on any of the corporate organization might negatively affect any of the organization.
An economy of healthy nature has the ability in increasing the consumers’ disposal
income, augmenting their sales factor and helping them in selling more services and goods. On
the other hand, on the economy that is of lethargic nature, it might decrease the disposal income
and might cause lesser amount of spending within the marketplace (Purce 2014). After that, it
generally leads to the dilapidated sales level and forcing the retailers in lowering their pricing
strategy. The retail industry has always been under demands in becoming a socially accountable
organization if they are selling products of environment-friendly nature, removal of any sort of
product that is controversial at the marketplace, placing warranties within market (Capon and
Singh 2017.). However, there are various cases where social factors along with government
overlie each other in various areas and that might cause harm to the various organizations.
P5. Conducting micro and macro analysis of the organization to identify the strengths and
weakness
PESTLE Analysis:
Political Factor Associated British Foods Plc has been operating
across the globe in countries like China, US,

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Portugal, Africa, Belgium and US along with other
countries. The performance of them is being highly
influenced by the legislations and politics existing
within those countries.
In employing labors, governments have been
encouraging organizations in hiring employees
through provision of flexible, locally-based along
with average paying jobs. Adding to that the UK
government has developed a tax recently affecting
the operation of Associated British Foods Plc. In
2011, the company’s VAT rate amounted to 20 per
cent from 18 per cent augmenting the revenue of 13
billion pounds, decreasing the profit factor of
various organizations (Camisón, and Villar-López
2014).
Economical Factor The economy of UK has been portraying the
positive signs from the factor of inflation along
with the crisis of the economy. During the recent
times, the estimated GDP was stated to be 2.7 per
cent more than which was in previous year.
Therefore, the results of growth in expansion of
Associated British Foods Plc. However, it would
take up sometime in increasing the clearance that
was monthly of the citizens so it would be taking
time in increasing development within their

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revenue.
Socio-cultural Factors During recent times, the customers demand has
also been distorted, they have started in buying
more fresh and organic kind of food. Consequently,
it is significant for them in filling their stores with
the organic products. In recent times, the number of
mature people has been expanding and due to the
issues of mobility (Liefbroer et al. 2015). They are
more akin to buying of groceries online so it would
be improved for the company Associated British
Foods Plc. in having good strategies of online in
meeting the requirements along with earning bigger
profit amounts. Along with all that, they can extend
a good catalog with their assorted collection of the
products.
Technological Factors Customers have been giving more values to the
present day upgraded technology, so it becomes
highly important for them in paying consideration
to effective technologies. There has been an
increase in the number of e-shoppers, it is
significant in developing efficient activity of
internet for the technologies in attracting
customers. Various technologies needs to be
utilized like the self-checkout machines along with
wireless devices and certain other things.
Legal Factors There exists various factors of legislations that