Business Environment Analysis: A Report on ASDA's Operations

This report offers a comprehensive analysis of ASDA's business environment. It begins with an introduction to the concept of business environment and its impact on organizations. The report then delves into the factors affecting demand, including prices, interest rates, and consumer confidence, specifically in the context of ASDA, a major UK retailer. It examines the concepts of elastic and inelastic pricing, and considers the market structure, highlighting ASDA's operations within an oligopolistic market. The report further explores supply variables such as technological improvements, worker productivity, and profitability of alternative products. It discusses factors of production, including management and capital, and analyzes marginal cost and revenue, alongside market structure and economic problems faced by ASDA. Finally, the report suggests economic solutions, focusing on inventory management, and concludes by summarizing key findings and providing references. The report showcases a thorough understanding of the economic factors and their influence on ASDA's business strategies.

ASDA BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
Introduction
Demand factors affect business
Sells price
Supply variables
Factors of production
Is marginal cost high or low compared to marginal revenue
Market structure
Economic problems
Economic solutions
Conclusion
References

INTRODUCTION
The term business environment indicates about all individuals, forces and organization which exists
outside the organisation power and they impacts on production activities of business. In simple terms,
business environment is explained as the sum or collection of external and internal factors like,
employees, buyer requirements, decision-making process, etc. All of these component impacts on
functions of organization and their methods of performing work in a direct or indirect manner.

DEMAND FACTORS AFFECT BUSINESS
ASDA is a retailing industry and a British supermarket chain with having headquartered in Leeds,
England. The company served different products and services and especially deals with general
merchandise, grocery and financial services and have a store in 632 numbers of locations. The
economic factors is related to those that affect demand of offered goods and services, employment,
inflations rate, consumer buying behavior and confidence and interest rate.

CONTINUE…
 Prices and Interest Rates: The price of products affects due to inflation as it has natural impact
over consumer spending over goods in significant manner. In this the leading economic indicators
such as producer price index and consumer price index get affected. The higher the purchasing the
higher is inflation rate that erode purchasing power and make less likely about consumer to spend
their spending to cover basic expense.

CONTINUE…
 Consumer Confidence: It is a factor that affect the demand of consumes of about certain product
and service and it is in regardless of consumer likely, financial situation as consumer only purchase
the goods if they felt confident about the service. The confidence of consumer inclined its
behaviour to make credit purchase and it is beneficial for ASDA and its selling.

CONTINUE…
 Consumers and the Invisible Hand: It is also being known as primarily mechanism that affect
consumer spending and it is as due to its invisible hand. It is initiated with the competitive building
and bidding of various products and service that affect the buying behaviour of customer directly.
The decision making of customers is dependent over quality and price of suitable products and due
to aggressive market competition different organisation have offered similar service with different
sort of benefits

SELLS PRICE
The sells price of company is either being elastic or inelastic and that is completed dependent on elastic
or inelastic. A product is basically considered as elastic as if quantity is dependent over demand of
offered products and it has drastic change within increment or decrement of price. In contrary, the
product might have considered as inelastic if the product quantity and its demand get fluctuate within
little price rate. ASDA is a superstore that operates different business operations and functions in an
oligopolistic market structure as there are various firms within the marketplace but there are only few
that are very dominating.

CONTINUE…
 ASDA is a Britain’s best and valuable food as well as clothing superstore and not only target the
customer with benefit as by providing services at cheaper rate but also received an unmatchable
mixture of food, clothing, grocery, home, entertainment and leisure. In this the market structure is
sustained with appropriate characteristic that usually determine marketers behaviour and their
response. There is a higher market competition such as of Tesco, Morrison, Sainsbury, Debenhams
and many others as well.

SUPPLY VARIABLES
The supply and demand is resulted of certain influence over enhancement of profit maximization and
its margin with this overall supply and its demand get controlled. It also underpin constant running
and change within various offering items and services. Supply variable is referred to the quantity of
goods that is produced by the company as in order to sell in the marketplace. It is also be determine
with the number of suppliers, technology state, and weather condition, availability of resource and
workforce that is required to produce appropriate goods.

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 Technological improvements: It is an aspect that is related to the new advancement and
improvisation that is induced within the business as in terms of innovation with this certain level of
changes in induce within corresponding working so that prominent outcome is perceived with timely
constrained. ASDA is looking forward to transform its insight and analytical capability that assist to
drive IT transformation with this company become third largest grocery.

CONTINUE…
 Productivity of workers: It is a variable that is resulted of tendency of workers to perform their task
and certain activity with sufficiency. It is required that employee must be motivated and concerned
to worked harder so as to achieve standardized objective and target that induce significant profit in
terms of supply and output management.