Business Environment Analysis: ASDA's Internal and External Factors

This report provides a comprehensive analysis of ASDA's business environment, examining its internal and external factors. It delves into the interrelationship between various organizational functions, such as human resources, finance, and marketing, and their contributions to achieving organizational objectives. The report explores the positive and negative influences of the macro-environment, including political, economic, social, technological, legal, and environmental factors, on ASDA's operations. A SWOT analysis is conducted to identify ASDA's strengths, weaknesses, opportunities, and threats, comparing its performance with competitors like Tesco. Furthermore, the report investigates the correlation between ASDA's strengths and weaknesses and the external macro factors, providing a holistic understanding of the company's strategic position within its business environment.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1&P2 Covered in PPT..........................................................................................................1
TASK 2............................................................................................................................................1
P3 Interrelationship between various organization functions and its structure......................1
TASK 3............................................................................................................................................3
P4 Positive and negative influence of external environment on business activity.................3
P5 Internal and external Analysis of ASDA company with other similar organisation.........6
TASK 4............................................................................................................................................7
P6 Interlinked of strength and weakness are with external factors of business....................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.........................................................................................................................................................9

INTRODUCTION
Business surroundings includes many intrinsic and extrinsic element which affects the
business activities of organisation. It is the responsibility upon management of organisation to
consider all such factors regarding achievement of their objectives. Internal factors are such
which are present within the organisation. These factors include technological capacity,
organisational culture, employee morale, poor delivery etc. On all such factors manager of
organisation have control. On other hand, external environment includes political, economical,
societal, technical, judicial and environmental factors. All these component have both optimistic
and pessimistic effect upon the business operations. Manager of organisation have no control
upon such macro-environmental factors. Consideration of all such factors helps in preparation of
the effective strategies and policies which provides the direction to employees in deployment of
their operations effectively. ASDA is private organisation which deals in food market, general
commodity and fiscal services (Avramenko, 2012).
In the existing document explain about, various kind and purpose of organisation and
their legal structures, size and scope of various types of organisation, kinship between distinct
company purpose and their link with organisational objectives, positive and negative effect of
macro-environment upon commercial enterprise dealings of organisation, internal and external
analysis of organisation regarding identification of their strengths and weaknesses. Also,
interrelation of strengths and weaknesses with external macro factors of organisation.
TASK 1
P1&P2 Covered in PPT
TASK 2
P3 Interrelationship between various organization functions and its structure
ASDA is private organisation which deals in many business activities to make maximum
profits. Large number of different departments are working in organisation regarding
achievement of the common objectives. Such different departments are named as production,
financing, human resource, marketing etc. All the departments of organisation have their
different roles and responsibilities in organisation but they are linked with each other. Functions
of one department provides direction regarding effective deployment of the services of another
departments (Bovee, Thill and Raina, 2016). Maintaining effective relation among different
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departments provides large number of benefit like improved communication, coordination,
supportive nature, positive working environment, team building etc. This helps the organisation
like ASDA to effectively provide their functions and accomplish their tasks. Interrelation among
the different departments and their contribution in achievement of objectives is defined below:
 Human resource department: It is most important department of every organisation.
The main function of this department is to planning about the workforce which is needed
to effectively deploy their functions and satisfying the different requirements of their
customers. It helps the other departments by appointing talented staff. Some other major
functions which are performed by this department are appraisal of performance,
determination of remuneration, management of staff members etc. All the functions helps
in improving the existing performance of employees and different department which
contributes in achievement of common objectives.
 Finance department: The main function of this department is to plan about the financial
requirements of different departments. It also performs the function regarding preparation
of the budget for different department which is required to adhere by all departments in
performance of their different functions. These budgets are working as standards which
helps in comparison of their actual performance and removal of the issues. Proper
allocation of funds to marketing and production department helps to accomplish their
tasks. Marketing department of ASDA has the opportunity to use modern tools of
promotion which attracts large number of customers and improve their sales. Production
department has the opportunity to use new techniques of production which in reduction
of production cost and improved their profitability (Cavalcante, Kesting and Ulhøi,
2011).
 Marketing department: This department of ASDA has the responsibility to research
about the market and identifies the information regarding views of customers for their
products, competitors prevail in market, strategies used by them, actual demand of their
products etc. Such information has large number of importance for production
department to optimally utilise their given resources in development of good quality
products which satisfies the different requirements of customers. It also helps in fixing of
prices of the products as per the wants of customers. All such functions helps in
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accomplishment of objectives like competitive advantage, improved profitability and
large market share.
Organisational structure
The structure of organisation is divided into four types which is defined below:
 Function based: organisational structure is divided on the basis of different functions
which are going to perform in an organisation. This provides that the whole organisation
is segmented on the basis of departments like human resource, marketing, production,
finance etc.
 Geography based: This provides that the organisation is segmented on the basis of areas.
This will provides the large number of opportunity regarding identification of the demand
and preferences of customers of different regions. It is effective method to divide the
organisational structure of ASDA because they have their business operations in many
countries (Commander and Svejnar, 2011).
 Product based: This includes the dividing up of on an organisational structure on the
basis of the products which are provide by organisation. For ex, ASDA deals in different
products like grocery, general merchandise and financial services. So, the organisation is
structured on the basis of such diversified business activities.
 Consumer based: This provides the organisational structure on the basis of their
different customers. It helps in identification of the different needs of customers and
satisfaction of their requirements.
TASK 3
P4 Positive and negative influence of external environment on business activity
ASDA is multinational organisation which provides their services in many countries. Due
to having their operations in many countries large number of macro-environmental factors have
huge impact on the business functions. The major macro-environmental factors are political,
economical, social, technological,legal and environmental. All such factors have their both
positive and negative impact on the business operations of ASDA. It is the duty of the
management of organisation is to consider the different factors and their consequences in
effectively preparation and implementation of the strategies and policies. Consideration of all
such factors helps in improvement of their existing performance and accomplishment of their
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targets within stipulated period of time (Dahan And et. al., 2010). Different conditions are
present in different countries and the management of organisation has no control over such
factors. The positive and negative impact of macro-environment factors on the business
functions of ASDA is define below:
Political factors: This includes the factors related to stability of government, regulations
provide by government, tax policies, international laws etc. All such factors have their both
positive and negative impact upon the business activities. In current time period, political
situation in UK is stable which is very good for the business activities of ASDA. On other hand,
there are various issues are faced in UK regarding debt which has negative impact upon
organisations. The positive and negative impact is mentioned below:
 Positive impact: The current political situation in UK is stable which has positive impact
upon the business operations of ASDA. Stable government provides more reliable
regulations and legislations which are helpful in expansion of the business operations
(Hair, 2015).
 Negative impact: If the government of country is not stable then the regulation provide
by them also strict and unstable which creates difficulties among the management of
ASDA. If the tax policies which are present in country are high then it is also have
negative impact on the business operations and reduces their profitability.
Economic factors: The major factors which are includes in this are economic condition
of country, flow of cash, situation of inflation and deflation, cost of credit, labour supply etc.
Different situation is present in different country which affects the business operations in both
positive and negative manner which is define below:
 Positive impact: If the economical situation of country is good then ASDA having the
large number of opportunities to expand their business operations. High flow of cash
provides large source of finance is easily available to provide their functions effectively.
 Negative impact: If the level of income of individuals live in country is low then it has
negative impact upon the sales figure of ASDA. If the labour and energy cost is high
then it increase the cost of product which has negative impact upon their profit margins
(Hamilton and Webster, 2015).
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Social factors: The major factors which are include in this are age, level of education,
consumer behaviour and occupation. All such factors have their both positive and negative
impact upon the business operations of ASDA.
 Positive impact: If the large number of individuals which are living in country are young
then it has positive impact on the business because they have ability to use online
technologies which improves the sales of ASDA.
 Negative impact: If the level of education which is present in country is low then it will
reduce the ability of individuals to earn large number of income. It affects the demand of
different products of ASDA in market and lowers down the profitability (Karagiorgos,
Drogalas and Giovanis, 2011).
Technological factors: The major factors which are include in this are advance
technology, methods and techniques. There impact is define below:
 Positive impact: If the new techniques of production are used by the management of
ASDA then it has positive impact which helps in improvement of the quality of their
products and optimally utilise their given resources.
 Negative impact: If the management of ASDA not adopts such new methods then it
reduces their ability to satisfy the different requirements of customers and also affects
their brand image and market share.
Legal factors: It includes the legislations which are provide by government of country.
The other major legal factors which have both positive and negative impact is copyright, patent,
trademark etc.
 Positive impact: Fulfilment of all such factors helps ASDA to improve their image in
market and retain the trust of employees and customers towards their services.
 Negative impact: If such legislations are not fulfilled by the management of ASDA then
legal actions have to bear.
Environmental factors: The major factors which covered under this are pollution, high
wastage etc.
 Positive impact: Implementation of the wastage removal system helps in optimum
utilisation of resources and reduces the adverse impact of wastes on environment. It helps
to gain the confidence of society (Kolk, 2016).
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 Negative impact: If the effective steps are not taken by the management of ASDA to
reduce environmental pollution have adverse impact on their image. This will impact on
their sales and profitability.
P5 Internal and external Analysis of ASDA company with other similar organisation
Internal analysis helps in identification of the strengths, weaknesses, opportunities and
threats which are posses by organisation. SWOT analysis is effective tool which is used by the
management of ASDA to identify their strengths and weaknesses. This provides the opportunity
in achievement of their different objectives by preparation of effective strategies and policies
which helps in removal of such weaknesses and strengthening their performances (Nishitani and
et. al., 2012). It provides the opportunity to compare their performances with their competitors
and understand their strategies. It helps in achievement of competitive advantage.
SWOT analysis of ASDA and Tesco is mentioned below:
Basis ASDA Tesco
Strength  ASDA known for its
appropriate and
excellent marketing
campaigns through
which they become
able to compete at keen
competitive world.
 Wide range of services
which also includes
delivery of financial
services
 More than 520,000
employees around the
globe
 Establish due to high
innovation
Weakness  They do not have much
global presence
 Competition with local
vendors also termed it
as a small association
 Controversies created
which impacted few
issues
 Limited presence in
emerging countries
Opportunities  Able to introduce  Acquisition with small
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themselves at new
market area as well as
like jewellery etc.
 Can be venturing into
new market area whom
have emerging nature
business as well as tie
up
 Leverage to gain social
media for expansion
Threats  Price war with other
associated competitors
 Pressure to maintain
low prices
 More and more issues
which arise between
various partners
 Major competition
which impacted
performance
TASK 4
P6 Interlinked of strength and weakness are with external factors of business
It is a major duty of business to analyse external environment of business properly so that
appropriate and effective work get disseminate. It is essential to linked up them with strength and
weakness of an association properly so that suitable and appropriate aspects could be gain.
Hence, a basic evaluation in this consideration stated as follow in regards of ASDA so that better
and appropriate work could be manage:
 Political: A major duty of every concern organisation is to identify and underpin that all
related aspects are taking place properly or not (Osterwalder and Pigneur, 2010). Thus, it
is essential to underpin the strength and weakness of ASDA in context of political factors
which evaluated as follow:
◦ A major strength for a company is that they follow all rules and regulations which
impose by government properly so that better and effective gain could be disseminate
in an appropriate manner
◦ A weakness which concern with business is that they are dealing in more and more
number of services which might affect their overall consistency
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 Economical: ASDA need to evaluate the economical condition of a country properly in
which they lead to start operating business. Thus, they need to cop up their working with
internal environment properly so that effective and efficient gain become possible:
◦ Good market knowledge with appropriate share enables them to start operating in
emerging countries (Pikka, Iskanius and Page, 2011).
◦ Less global presences affected economical consideration of an organisation which
need to determine in a suitable manner.
 Social: Business have some major responsibility towards society which need to get done
in an absolute frame (Pulver, 2012). ASDA have some strength as well as weakness
which associates with their working in society which stated as follow;
◦ Performing CSR activities through which a positive reflection on society lead to
carried down
◦ Weakness is harming environment by applying unusual methods
 Technological: The last factor is technological consideration which have to analyse by
business managers properly and linked with their internal consideration properly so that
absolute gain could become possible:
◦ Using new and emerging technology to reach wide range of users (Reed and et.al.,
2013).
◦ Constant modification in utilise technology lead to impacted finance of a company.
CONCLUSION
It get concluded from the project that business environment is dynamic in nature which
get changed with any course of time. There are various types of organisation are taking place
with differ scope and size as well as have legal structure. Although, business need to linked
organisational functions with objectives in an appropriate and suitable frame so that suitable
target get accomplish in order to maximise efficiency. Hence, it is essential to determine internal
and external environment of business properly as well as linked them effectively so that better
options could be generate.
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REFERENCES
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