BTEC HND Business and Environment: ASDA Business Analysis Report

This report provides a comprehensive analysis of the business environment of ASDA, a UK-based retail supermarket. It examines the impact of both micro and macro factors on ASDA's operations, including political, economic, social, technological, legal, and environmental factors (PESTLE analysis). The report identifies the positive and negative effects of these macro-environmental factors on ASDA's business, emphasizing the importance of mitigating negative impacts. An internal and external analysis of ASDA is conducted, highlighting its strengths and weaknesses, and exploring opportunities and threats. Furthermore, the report delves into the interrelation between ASDA's strengths and weaknesses and the identified macro factors, providing insights into strategic implications. The report also covers the interrelationship between the weaknesses and strengths of the company with the micro and macro environmental factors. It is a detailed examination of ASDA's strategic position and the external forces shaping its performance.

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1, P2 & M1................................................................................................................................1
TASK 2............................................................................................................................................1
P3, M2 & D1 ..............................................................................................................................1
TASK 3............................................................................................................................................1
P4. Positive and negative impacts macro environment has upon business operations...............1
P5. Internal and external analysis of ASDA with identifying strengths and weaknesses...........3
P6 & M4. Interrelation of strengths and weaknesses with macro factors...................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
.........................................................................................................................................................8

INTRODUCTION
Business environment is a combination of external as well as internal factors also termed
as micro and macro factors that put their direct impact on the organisational activities. It is
necessary for the manager of firm is to identify these two factors and also reduce their impacts.
ASDA is a retail supermarket based in UK that is chosen for the present study. It is a retail
industry and it also provides some other goods involves financial services and also company of
mobile phone by using the EE network. In this present report mentions about the relationship
among various organisational functions and they are related to the organisational structure and
objectives. In this report, negative and positive effects of the macro environment on business
operations will be given. It is necessary for the company is to remove the negative impacts of
PESTLE or macro factors to develop the effective business operations. Also, interrelation of
strengths and weaknesses with the external macro factors will also be highlighted.
TASK 1
P1, P2 & M1
Covered in PPT
TASK 2
P3, M2 & D1
Covered in PPT
TASK 3
P4. Positive and negative impacts macro environment has upon business operations
The performance level of ASDA business firm is good. The employees of this company
do their work in an effective and proper manner (Aterido, Hallward-Driemeier and Pagés, 2011).
But it is important for this organisation to examine and also measure the effectiveness and
efficiency of business related activities and its operations. To perform business operations and
tasks in an effective manner, a duty of manager of ASDA is to know about an internal as well as
an external factors because these factors impacts more on the business related activities. From
this, the impact will be less and company will do its activities in a proper and systematic manner.
External environment includes political, social, economic, environmental and also technological
factors. All these factors can put negative as well as positive impact on the business environment
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(Chavis, Klapper and Love, 2011). The internal and external both put a direct impact on business
environment positively and negatively both. In micro environment, there comes competitors,
employees, suppliers, etc. but the macro environment consists of political, social, economic,
environmental, technological and legal factors. So, in context to reduce the impact of same, it is
necessary for the manager to determine all these factors. Some of the negative and positive
effects of these external factors are given as below:
Political factors- Under this, the government of United Kingdom formulates some
policies and also rules. An international, national and also regulations of European Union
impacting on the legislation, taxes, employment, rights of consumer etc. These all impact on the
business of ASDA. The negative impact of this factor on the ASDA organisation is the
government instability, political unrest etc. ON the other hand its positive impact is that if this
company will do its business activities by following the rules and policies which are made by the
ASDA then it will be helpful for business and also do the positive impact on business.
Economic factors- The positive affect of this factor on the ASDA organisation is that
this company follows all its factors such as cost of credit, labour demand and supply, competitive
pressures, energy prices and many more. But its negative impact is that it effects on pricing
strategies of ASDA Company. The main motive of this company is to rendering the high and
better quality services in order to increasing the profit level. Economic factors has some
components such as inflation, unemployment rates, interest rates, credit accessibility etc. There is
a need to the ASDA company to include all the economic factors like competitive pressure,
energy costs, demand, interest rate and cost of credit. These all the factors can impact on pricing
strategies.
Social factors- It is important for this company is to analyse the socio economic factor in
context of reducing its impact. From the last few decades, there is big change to see in society.
The tastes and also preferences of customers changes time to time. The ASDA business
organisation produce its good on the higher prices and also did not segment its products in to
different categories (Commander and Svejnar, 2011). From this people were not be attracted
towards the organisation. From this the proactivity and also development of this company
affected. On the other hand, if company will produce the good quality of products according to
the tastes and preferences of the customer then it will be very helpful and customers will also be
attracted towards the products of this business firm. In social changes includes the healthy
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lifestyle of people, ageing population etc. For determining this factor it is necessary for firm is to
produce new products at market place. It helps in developing the segmentation related strategies
for firm.
Technological factors- Under this, for increasing the productivity of business, it is
necessary for the manager of this company is to use the new and latest technology in this
production process and also business related operations. For producing the good quality of
products, this company use the new technologies and also machineries. With the help of this the
the cost of production decreases and the cost of man power will also be reduced (Gecevska and
et. al., 2010). On the other hand, its negative impact is that if company will use the obsolete
technology then from this the cost of manufacturing of goods will be increased and its will
impact on the productivity of company. With the help of technology, this firm provides its
products online by using the internet. It will be useful for customers and they will buy the
products from the website of firm at reasonable cost with out going to the market place.
Legal factor- The manager of ASDA business firm runs its business by following the
regulations and policies of government. This company always update itself with the new legal
system with are introduced by the government of United Kingdom. There are many acts which
this organisation applied at the workplace and these are employment act, health and safety, equal
wages, discrimination act etc. Its impact positive on the environment of company. But on the
other hand organisation does not pay the tax on time to government then in this case it impacts
negative on business. The first priority of firm is security and safety of its employees. From this
they can work freely with out any risks and problems. In any kind of research company uses the
new technology.
Environmental factors- At the time of delivering of products, if climate and also
whether is not good then in this case it will impact bad because from this the goods will not
deliver to the customers and supplier at proper time (Moutinho, 2011). In this case it will impact
bad and also negative in front of customers. So to develop the positive impact it is necessary for
company is to check the climate conditions and after that deliver the goods to customers and also
retailers.
P5. Internal and external analysis of ASDA with identifying strengths and weaknesses
For doing the all business related activities properly, it is the responsibility of the
manager is to analysing its capabilities and also weaknesses. From, this it can do its business
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activities properly. To know about its strengths and also weaknesses the manager of this firm
conduct the internal research. There are some weaknesses and strengths of ASDA business firm
given below as above:
Strengths:
 This company provides the large number of goods and also services by including the
financial related services.
 It is best known about its good marketing related campaigns.
 Under this ASDA, there are more than 140000 staff members are working in almost
500stores.
 Its main advantage is that it is socially responsible by conducting the CSR (Corporate
Social Responsibilities) initiatives.
 This company has a strong management and all employees are satisfied from the services
of this company (Belás and et. al., 2015).
 This company regularly being in the touch of its consumers with the help of social media
and through this, company takes the feedback and also their reviews about its products.
 It is a most powerful brand.
 Its main focus on minimising the cost and also save money.
 It has more than 12000 merchandise.
Illustration 1: SWOT Analysis
(Source: What SWOT Analysis is in simple words?,
2017)
Weaknesses:
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 In the global market, this company has minimum presence as comparison to its
competitors.
 In some of the countries, the abilities and also capabilities of this company to sell its
products have restricted with its entrance.
 Its main weakness is that it has limited market share and also growth rate.
 This company has no any kind of loyalty card in context to retraining its customers ta the
market place.
 This firm has minimum small supermarkets in retail sector.
 It has not more flexibility to focus on its competitors.
 It has minimum retail stores.
Opportunities:
 It can expand its business in to the new areas of jewellery, pharmacies, photo department
and also the opticians.
 ASDA business firm ventures in to the market that are developing such as China, India
and many more countries (Robbins, Judge and Campbell, 2010).
 It can merge and also make the strategic alliances with any other retail sector firm.
 It can minimize the cost of its products.
Threats:
 This company has a pressure of maintaining its minimum prices.
 ASDA Company has the price war with any other retail brand chain.
 It ever modifying the policies of different central governments of United Kingdom.
 There are many strong competitors in retail sector.
P6 & M4. Interrelation of strengths and weaknesses with macro factors
The weaknesses and also strengths of every business firm are related to the micro as well
as the micro environmental factors. The management of this business firm compares the strength
of its company with the macro factors like for an instance economical, technological, social,
environmental, legal and technological in order to developing the effective and beneficial
strategic policies or strategies (Blanchard, Tolbert and Mencken, 2011). The interrelationship
among the weaknesses and also strengths of this company with the some factors of macro
environment given below as above:
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Economic factors- Under this there are some components are included like for an
instance interest rate, inflation, loan rate, deflation etc. If a business organisation is very strong in
terms of finance and has large amount in order to doing business related activities. In this case
this factor will not be impacted on the pricing strategies of an organisation. It is necessary for the
ASDA to always prepare to deal with the challenges and risks.
Political factors- Under this the government regulations, rules and also some of the legal
policies are included. Any kind of the variation in all these policies impact on the company to
deal with any kind of legal challenges, it is important for the company is to hire and select the
capable staff members.
Cultural and social factors- It is necessary for ASDA is to appoint the capable staff
members who can use the natural resources properly and also effectively. The staff members
should have the abilities to deal with any kind of problems of risk in a proper way (Teece, 2010).
To develop the good impact on the society, there is a requirement for company is to produce the
goods and services on proper period of time.
Technological factors- This element of macro factor plays an important role in this retail
sector. It is necessary for ASDA is to upgrade its technology in context to increasing the quality
of products. From the cost of production will be reduced. But in this there will be the
requirement of the more resources.
Environmental factors- In this present time period, each business firm use the various
kinds of natural resources in order to rendering the final products to the consumers (Kang, Lee
and Kim, 2010). Under this, manager of ASDA should be formulate the effective strategies and
also policies in context to managing all the natural resources.
The strengths and also weaknesses are interrelated with the macro components and also
impact each other. If in case employer fails to determine the strengths and also weaknesses of its
firm then in this case manager cannot evaluate all the external factors. From this, managers will
not making the effective business plans properly (Wild, Wild and Han, 2014). The weakness of
the company negatively impacted on business related operation and the strategy of firm always
increase the sales and production of firm.
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CONCLUSION
It has been concluded from the above report that the management of ASDA determines
the environmental factors in order to reduce the impact of internal and external environment. In
this report studied about the negative and also positive impacts of PESTLE (Political, Social,
Economic, Technological, Legal and Environmental) Analysis on the business related activities.
Under this report studied about the relationship among the various functions of ASDA company
link to the organisational objectives
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REFERENCES
Books and Journals
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Belás, J. and et. al., 2015. The business environment of small and medium-sized enterprises in
selected regions of the Czech Republic and Slovakia. E+ M Ekonomie a Management.
(1). p.95.
Blanchard, T.C., Tolbert, C. and Mencken, C., 2011. The health and wealth of US counties: how
the small business environment impacts alternative measures of development.Cambridge
Journal of Regions, Economy and Society. 5(1). pp.149-162.
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
Iskanius, P., Page, T. and Anbuudayasankar, S.P., 2010. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product
industry. International Journal of Electronic Customer Relationship Management. 4(4).
pp.395-414.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
De Jonge, A., 2011. Transnational corporations and international law: accountability in the
global business environment. Edward Elgar Publishing.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Kang, D., Lee, J. and Kim, K., 2010. Alignment of Business Enterprise Architectures using fact-
based ontologies. Expert Systems with Applications. 37(4). pp.3274-3283.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Robbins, S.P., Judge, T. and Campbell, T.T., 2010.Organizational behaviour. Financial Times
Prentice Hall.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Trkman, P., 2010. The critical success factors of business process management. International
journal of information management. 30(2). pp.125-134.
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Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
Online
What SWOT Analysis is in simple words, 2017. [Online]. Available through:
<http://pestleanalysis.com/swot-analysis-examples/>. [Accessed on 10th November
2017].
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