Business Environment Report: Asda, Macro Environment, & Strategy

This report provides a comprehensive analysis of Asda's business environment. It begins with an introduction to the concept of the business environment, encompassing internal and external factors. The report examines different organizational forms, including public, private, and voluntary organi...Read More

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Explanation of various forms & purpose of organisation along with the legal structure......4
P2 Explain size & scope of different types of organisation........................................................5
TASK 2............................................................................................................................................6
P3 Explanation of relationship among various organisational function & how they are
connected with objective & structure..........................................................................................6
TASK 3............................................................................................................................................8
P4 Determine the negative and positive impacts the macro environment has on business
operations....................................................................................................................................8
TASK 4..........................................................................................................................................10
P5 Internal & external analysis of particular organisation to identify its strength & weaknesses
...................................................................................................................................................10
P6 Explain how strengths & weaknesses interlinked with external macro factors...................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment consist of both external and internal factors that is employees,
government, technology, competitors, customers, suppliers and so on. In addition to this, it is the
sum total of all the organisation, people & other forces which are outside the power of company
but impact on its production and performance level (Boone, Kurtz and Berston, 2019). For the
present report, Asda is taken into consideration. It is a British supermarket retailer that is
headquarter in England, UK. The company was founded in year 1949 and provide its products
and services in more than 15 countries. The report will cover different types of organisation with
its purpose, scope, legal structure and size as well. Along with, internal and external analysis of
respective organisation is included in report. In the last, interrelation among strength as well as
weaknesses with macro environmental factors is elaborated in a proper manner.
TASK 1
P1 Explanation of various forms & purpose of organisation along with the legal structure
Public organisation: This form of organisation owned & controlled by government of a
country. NHS is taken into consideration, which was founded in the year 1948 with a mission yo
provide best and free heath service to people who cannot afford it.
Purpose: The aim of National Health service is to provide effective and best health
service to individuals who have no capability to afford it.
Legal structure: With reference to National Health Service, the decisions are mainly
taken by state & central government. All such decisions are followed by workforce of NHS so
that all the activities is implement in a proper manner.
Product and services: National Health service provide free service to people so that their
mental and health condition is improved (Crowley and Jordan, 2017). In addition to this, it also
give other services like emergency care, primary care and many more.
Private organisation: It consist of partnership, agency and sole proprietorship that is
established with a motive to gain higher profits and success at marketplace. Asda is a private
organisation that provide quality offerings in more than 14 countries.
Purpose: The main objective of Asda is to give an effective and quality service to
customers in order to earn profits and become the leader in retail indsustry.

Legal structure: In relation to private organisation, its legal structure is mainly depend on
CEO and top level authorities of business entity. They mainly take decision and them
communicate it to the employees so that all the activities and operations is implemented in a
proper manner.
Product & services: The product that is offered by Asda is grocer, general merchandise
and so on. In addition to this, it give services such as Asda living, Asda money, Asda mobile etc.
Voluntary organisation: It is basically a group of people that perform and starts working
with the objective to improve conditions of societies and welfare of people as well. Oxfam is a
voluntary organisation that is associated with around 21 independent charitable trust and is
founded in year 1942.
Purpose: The organisation is performing with a purpose to remove poverty and to
enhance living standard of people in a proper manner.
Legal structure: In voluntary organisation, most of the decision is taken by trustees of
company which is them systematically communicated to the volunteers.
Product & services: The organisation have volunteers that perform all the activities so
that they can achieve their objective and remove poverty from the country.
P2 Explain size & scope of different types of organisation
Private organisation- Asda
Size and Scope: Asda is one of the renowned supermarket of UK that offers high quality
grocery and general merchandise to its customers (Decock and Spiessens, 2017). The company
offers its product and servive in more than 12 counties and has around 5,000 effective and
talented employees who are the main reason of its success. The operating profit of Asda is 2.19
billion till 2019 that is higher from previous year.
Mission & vision: The vision statement of Asda is “To provide quality and best product
to customers in order to gain leading position in retail industry. “To be the first choice of
customer and attain competitive advantage” is the mission of respective organisation.
Public organisation: NHS
Size and Scope: National health service has a huge scope as it focuses on raising the
number of medical employers from 6500 to 9000 by year 2025. The organisation give is services
in around 7 countries & is planning to enhance its operations. The last year revenue of company
is $539 billion.

Mission & vision: The mission of NHS is “To enhance lifestyle and health condition of
people by reaching to high number of countries. The vision of organisation is “To give best
medical service to people that decline their mental and health condition”.
Voluntary organisation: Oxfam
Size and Scope: Oxfam is a voluntary organisation that involve wide scope as it is
performing for improving the conditions of society and welfare of people. This organisation is
associated with 21 independent charitable trust and is also planning to increase it.
Mission & vision: “ To make the world fee from poor financial condition” is the vision of
Oxfam (Holmqvist and Ruiz, 2017). The mission of organisation is “To provide justice to
individuals so that they can fairly treated in terms of colour, gender and many more.
Differences among Micro, small and large enterprises
Basis Small Enterprises Medium Enterprises Large Enterprises
Number of employees Small enterprises
involve 10 employees
or less than it who
perform activities
properly.
It consist of 50 to 250
staff members that is
selected by them in an
effective manner.
It is determined that
large enterprises has
mire than 250 staff
members prevailing in
the company.
Decision making Herein, the decision is
taken by the managers
of small company
which is further
communicated to its
workforce.
In medium size
enterprises, the
decision-making is in
the hands of managers
& stakeholders as
well.
BOD, higher
authorities, CEO take
decision about
enterprises & they take
time for taking proper
and effective decision.
Purpose The objective of small
enterprise is to earn
enough money which
satisfy their own and
family needs as well.
Medium enterprises
perform its activities
in order to enhance
their living standard
by gaining profits.
Herein, the purpose is
to reach large number
of people by
expanding operations
that leads to attainment
of higher profits.

TASK 2
P3 Explanation of relationship among various organisational function & how they are connected
with objective & structure
It is stated that every organisation is associated with various functions that is finance, HR,
marketing and many more. All this functions are interrelated with each other which help in
attainment of objectives within stipulated time period (Kirchoff, Tate and Mollenkopf, 2016).
The different functions of chosen organisation along with their interrelatedness is given below:
Illustration 1: Organisational Structure
(Source: Organisational Structure, 2019)
Finance and marketing: In order to implement any of the marketing activity that is
advertising, marketing campaign etc, the funds is required that is provide by the finance
department. In relation to Asda, its managers ensure that good relationship is maintain among

these departments so that activities is implemented in a proper manner that enhance profitability
and revenue level which is consider in the finance functional area.
Human Resource and IT department: The main function of HR department is to hire
the best employee that fits on the vacant job position. The IT department of Asda is required a
candidate who manage software and for this HR department of company is developing job
description and taking interviews of people so that they can hire right person (Kwilinski, 2019).
On the other hand, IT department develop software for HR department where it can record the
information of employees in a systematic manner. This interrelationship assist company to
enhance its productivity and performance level in an appropriate manner.
Research & development and Marketing department: Marketing department conduct
market research in order know about the customer requirements and market trends as well. This
information is then communicated to the R&D department that help in producing products
accordingly. Such inter-relationship among the marketing and R&D assist in fulfilling
requirement of customer that leads to customer retention and strengthen of market performance.
By analyzing the above interrelationship among different functional areas, it is analyzed
that it is significant for the top level authorities of Asda to emphasis on maintaining effective
relationship among these functional areas as it help in systematic implementation of activities
and attainment of organizational objectives in a timely and appropriate manner.
TASK 3
P4 Determine the negative and positive impacts the macro environment has on business
operations
In order to know about the positive and negative influence of macro environmental
factors, managers of Asda uses PESTLE analysis that involve six major factors, which are as
follows:
Political factor: It involve factors such as government policy, labour law, taxation,
political stability and so on. In relation to Asda, it is operating mainly in UK where government
support companies to expand their operations so that the company is highly contribute towards
growth and development of economy.
Positive impact: Due to the stable political environment of UK, Asda is able to expand its
operation that positively impact on its performance and profitability.

Negative impact: Due to Brexit, many of the policies has changed which arise cost and
time to company and impact on its operations in a negative manner (Liu and Vrontis, 2017).
Economical factor: This factors are labour supply & demand, pay level, competitive
pressure, cost of credit etc. It is analysed that all such factors affect on the pricing strategies of
Asda.
Positive impact: The purchasing power of people living in UK is high and prefer to
consume high quality products which leads to increase in profitability and revenue of company.
Negative impact: It is analysed that the labour cost in UK is high that decline the profit
margin of Asda.
Social factor: This are healthy lifestyle, celebrity following, ageing population that are
significant for Asda. It is analysed that understanding such factors assist Asda to introduce new
and effective product at marketplace which satisfy customers in an appropriate manner.
Positive impact: It is determined that the company focuses on offering healthy products
in market that fulfil the requirements of people and develop positive image in mind of customers.
Negative impact: The needs and preferences of people is changing rapidly and to deal
with this arise complexities for company and decline its efficiency level.
Technological factor: The use of technology is increasing rapidly and impact on the
overall functions and requirements of customers as well as they prefer to consumer product and
service which is new as well as innovative at marketplace (Moşteanu, Faccia and Cavaliere,
2020).
Positive impact: Asda has its own application and also has self-check out in stores which
is convenient for customers and also attract them to use its products and services.
Negative impact: Using of new technology on continuous basis arise cost to company
which leads to decline in level of revenue and profits as well.
Legal factor: The respective organisation must abide by the rules as well as regulations
of countries in which it operates, if not then it result into punitive actions and charges on
company.
Positive impact: It is stated that Asda follow all the laws and policies of countries that
help in proper execution or implementation of activities.
Negative impact: In the present time, the company is obliged with high penalties by
government that affect on its brand image in a negative manner.

Environmental factor: It involve factors that is carbon footprint, green economy,
hazardous waste and so on. In the present time, people are more concerned of their health and
prefer to consume environmentally- friendly goods & services.
Positive impact: The company focuses on declining the use of carbon footprints so that
they can contribute towards the environment protection.
Negative impact: ASDA at present time is not able to develop organic products which
affect negatively on its market performance and image as well.
TASK 4
P5 Internal & external analysis of particular organisation to identify its strength & weaknesses
For conducting internal analysis, the company make use of SWOT analysis that is
mentioned below:
Strength Weaknesses
 One of the biggest strength of company
is its high market presence that help in
gaining higher profits to Asda.
 Another strength of respective
company is strong backing of parent
organisation Walmart can be utilised to
enhanced business & penetration
(Phelps and Szabat, 2017).
 The ability of company to sell price is
restricted its entrance in some areas that
affect on its market performance.
 The company enables to offer organic
and healthy products that affect on its
overall sales in a negative manner.
Opportunities Threats
 Asda has the opportunity to expand its
operations in new areas that is
jewellery, pharmacies and so on.
 It is determined that acquisition of
small business entities allow Asda to
gain higher growth in market.
 One of the biggest threat of company is
its competitors such as TESCO,
sainsburys's and so on.
 The pressure of offering product and
service at low price decline the
profitability margins of Asda.

P6 Explain how strengths & weaknesses interlinked with external macro factors
Basis Political Economical Social
Strength It is determined that
the managers of
company follow all the
policies developed by
government that help
in systematic and
smooth execution of
operations and
activities as well.
Asda provide fair
wage to its employees
so that they can fulfil
their requirements and
perform activities
properly.
Asda focuses on
offering those products
as well as services
which fulfil
requirements of
customers and meet
with the market
demand.
Weakness Modifications in the
policies arise cost to
Asda which decline its
overall level of profits.
In the present time, the
economic conditions
of UK is not well and
impact on performance
of Asda..
Nowadays, customers
are more self-
conscious of their
health which is
consider as weakness
of Asda.
Basis Technological Environmental Legal
Strength Asda make use of new
technology that help in
offering quality and on
time service to
customer.
The organisation
emphasis on using
environmental friendly
products that
contribute towards
environment
protection and develop
positive brand image
in market.
The organisation
follow all rules &
policies that leads to
systematic execution
of operations and
activities.
Weakness Using of new
technology on
continuous basis occur
The higher authorities
of Asda is not able to
follow all the
Change in the laws and
policies consumes time
of company that

high cost to company
and reduce the overall
revenue of Asda.
environmental rules
that impact adversely
on its brand image.
sometimes impact
negatively on its
activities and
performance as well
(Saleh and Watson,
2017).
CONCLUSION
From the above discussion, it has been concluded that it is significant for an organisation
to conduct internal as well as external analysis as it help in dealing with the issues and
complexities that arise at any time. PESTLE analysis assist company to know about the factors
which influence on the operations and performance of company. Moreover, using of new
technology is important for a business entity as it ensure retention and growth at marketplace.

REFERENCES
Books & Journal
Boone, L.E., Kurtz, D.L. and Berston, S., 2019. Contemporary business. John Wiley & Sons.
Crowley, F. and Jordan, D., 2017. Does more competition increase business-level innovation?
Evidence from domestically focused firms in emerging economies. Economics of
Innovation and New Technology, 26(5), pp.477-488.
Decock, S. and Spiessens, A., 2017. Face-threatening e-mail complaint negotiation in a
multilingual business environment. Current Issues in Intercultural Pragmatics, 274,
p.129.
Holmqvist, J. and Ruiz, C.D., 2017. Service ecosystems, markets and business networks. The
TQM Journal.
Kirchoff, J.F., Tate, W.L. and Mollenkopf, D.A., 2016. The impact of strategic organizational
orientations on green supply chain management and firm performance. International
Journal of Physical Distribution & Logistics Management.
Kwilinski, A., and et. al., 2019. Formation of the entrepreneurship model of e-business in the
context of the introduction of information and communication technologies. Journal of
Entrepreneurship Education, 22, pp.1-7.
Liu, Y. and Vrontis, D., 2017. Emerging‐market firms venturing into advanced economies: The
role of context. Thunderbird International Business Review, 59(3), pp.255-261.
Moşteanu, N.R., Faccia, A. and Cavaliere, L.P.L., 2020, August. Digitalization and green
economy-changes of business perspectives. In Proceedings of the 2020 4th
International Conference on Cloud and Big Data Computing (pp. 108-112).
Phelps, A.L. and Szabat, K.A., 2017. The current landscape of teaching analytics to business
students at institutions of higher education: Who is teaching what?. The American
Statistician, 71(2), pp.155-161.
Saleh, A. and Watson, R., 2017. Business excellence in a volatile, uncertain, complex and
ambiguous environment (BEVUCA). The TQM Journal.