Icon College, HND Business: Business and Business Environment Report

This report provides a comprehensive analysis of the business and its environment, focusing on various organizational types, their purposes, legal structures, and sizes. It examines profit, non-profit, and non-governmental organizations, using ASDA, British Council, and NCVO as examples. The report delves into the relationships between different organizational functions, such as marketing, human resources, finance, and production, highlighting their interdependencies within a matrix organizational structure. It also explores the positive and negative impacts of the macro environment on the retail sector, using the PESTLE model to analyze political and economic factors. The report concludes with an examination of internal and external analysis, along with the interplay between strengths, weaknesses, and external macro factors, providing a holistic view of business operations and environmental influences.

Business and Business
Environment

Table of Contents
INTRODUCTION...............................................................................................................3
LO1....................................................................................................................................3
P1 Dfferent types of organization...................................................................................3
P2 Size and scope of different organization..................................................................5
LO2....................................................................................................................................6
P3 Relationship between different organizational functions .........................................6
LO3....................................................................................................................................9
P4 Positive and negative impacts the macro environment ...........................................9
LO4..................................................................................................................................12
P5 Internal and external analysis.................................................................................12
P6 Strength and weakness interrelate with external macro factors.............................13
CONCLUSION.................................................................................................................14
REFERENCE...................................................................................................................15

INTRODUCTION
Business environement is a marketing term to understand that covers some
factors and forces which affects organization's ability and helps to maintain the good
relations with customers (Linder and Williander, 2017). This is the combination of
internal and external factors which imapcts on business whether positively or negatively.
The main aim of business organization is to increase productivity as well as profitability
by accepting the challenges in their business. It is very important for companies
therefore ASDA has been selected that is dealing in retail sector and provides different
types of services to customers. This assignment discusses about size, scope, purpose
and legal structure of different types company, their objectives and interrelationship
between different organizational functions. In addition, it discusses about positive and
negative impact of business environment, internal and external analysis of specific
organization etc.
LO1
P1 Dfferent types of organization
In Business environement there are many types of organization who are running
their own business by filling customer's needs and wants. Their main purpose, legal
structure, size and scope are different from other industry (Dyllick and Muff, 2016).
Therefore, discription of differerent organization and their purposes are as defined:
Profit orgnaization (Private): This means an organization whose main aims to
run a business and earn higher profits. It is different from public company beacause
such type of company collect capital to run a business from own sources with its own
interest. ASDA is profit organization that is consider as British supermarket retailer was
founded in 1949.
 Purpose: ASDA's purpose is to make good and services more affordable
and reachable for everyone at every place.
 Legal structure: The legal structure for Profit sector is company,
partnership, co-operative, corporation and sole trader who starts their own
business with own capital and make profits.

 ASDA is following corporation legal structure in order to provide products
and services at retail prices.
Not for profit organization (Public): This means an organization whose main
aim is to helping community and other people by operating the business. Such type of
company collects funds from publicly and owned by government. British Council is a
public company which is owned by government, it is speciqalising in international
cultural and educational opportunities. As government supports British Council so it
works in more than 100 countries by promoting a the UK and english language
encourages cultural, scientific and technological education. It was founded in 1934 by
government for providing benefits to people (Vij and Bedi, 2016).
 Purpose: British Council's purpose is to build international opportunities
for UK's people and other countries and build trust as well relationship
between them all over the world.
 Legal structure: The legal structure of non profit organization is local
governement, central government, state government etc. which is held by
government authority and follows their rules.
 British Council is following Central government legal structure under which
it prodive guidance or education for removing different culture.
Non- goverenmental organization (Voluntary): This means group of
individuals who enter into an agreement for providing good services to people without
charging any fees. It is run by trusttes who wanted to contriburte for poor people.
National Council for Voluntary organization (NCVO) is a umbrella body for the
community sector which was founded 1919 for giviing better services to people.
 Purpose: NCVO's main purpsoe is to connect community for make better
place and increase social welfare. Moreover, to make new friends, extend
network and boost social skills by running such business.
 Legal structure: The legal structure for Non governmental company is
NGO, Foundation, club society and limited libility who works for for social
benefits by their interest (Stacey, 2016).
 NCVO is following foundation legal structure that provides variety of goods
and services for society benefits.

P2 Size and scope of different organization
All organization are of different types whose size, scope and objectives are also
different that helps to achieve goals by making plans. There are difference between
micro, small, medium-size and large enterprises such as in small and medium
enterprises should have less than 250 employees, in micro less than 10 employees, in
small 10 to 49 employees and in large size of entreprises should have more than 250
employeees. The main aim of such industry is to run their business by increasing
market share, growth of business and sustainability which based on size and scope.
Therefore, size, scope and objectives of organizations are as given:
Profit (ASDA):
Size: ASDA is a large size of organization as it has 165,0000 employees who are
working in retail sector and supplies different types of goods and services. It is consider
as Global company that have invested in many country and coordinate with branded
products in all markets.
Scope: Its scope is wider whose market share dropped to 15.3 over the same
period. It increases its sales continuously due to which growth and sustainability of
such organization is running speedily (Appelbaum and et.al., 2017).
Mission and vision: To be Britain's best value retailer by giving preference to
customer's needs and make efforts to fill their needs.
Objectives: To provide betetr quality of goods and services of cheap and
affordable to public and maximize profits by expanding business.
Non profit (British Council):
Size: British Council is a medium size oganization as it has 18,105 employees
that is consider as international structure organization. It helps to build relationship
between people of different culture by creating international opportunities and sharing
ideas.
Scope: The market share of such comoany has under the supervision of
government who links people to promote corporation, internqational development and
prosperity that helps to grow organization. It deliver range of cultural relations
programmes for the purpose of creating international oportunity and exchanging
thoughts.

Mission and vision: To build an understanding between differtent cultural
people, working together on foundation of education, mutual understanding, respect and
trust for making better future of UK's people (Cepel and et. al., 2018).
Objectives: The main objective of British Council is to create more opportunity
and trust for people, develop stronger long term relationship for UK and share
knowledge among people.
Non- governmental (NVCO):
Size: This is also a medium size organization that has more than 12000
membership who are working for society by starting charity, to funding, managing
people and guiding people. It is consider as Transactionals company structure that have
invested in foreign operations and making decision with confirmation of all trustees.
Scope: The market share of such company are increasing 3 to 15 % continiously
that gives long term growrth to such business. Members works effectively for the
purpose of be sustainable in different culture and maintaining relationship.
Mission and vision: Its mission and vision is society where all can make a
difference to the causes in which they belives in, and to helps voluntary organizations
and volunteers make the big difference.
Objectives: To create equal opportunity for all and maintain the profitability by
providing good quality of services to all person. To encourage other organizations and
run business efficiently.
LO2
P3 Relationship between different organizational functions
All organizations performs differrnt types of functions that are needed to make
profits and expanding business activities. Different functions such as marketing, human
resource, finance, information technology and production which are interrelated with
each other. These functions are managed by people and run their business by focusing
on different needs. The main purpose of organization is to improve the business
performance by maintaining relationship among them. Description of different
organization structure are as given:

Network strucure: Such structure helps to maintain relationship between
internal and external management for the purpose of making profits. It is connected with
all department that helps to achive organizational objectives. It is decentralized
and ,ore flexible structure that helps to communicate with all employees and solve their
problems.
Horizontal structure: Small sizes company are adopting horizontal structure
that helps to eliminate middle management. There is no need to mediator to share the
problems that means communication with top level is easy.
Matrix structure: This structure is workers share information in a grid line rather
than traditional hierarchcal way. In this structure similar skills of people are working
colelctively for the purpose of achieving objectives (Matrix organization structure, 2019).
Illustration 1: Matrix organization structure, 2019
Source: Matrix organzation structure, 2019
ASDA is following Matrix organizational structure in which it share information as
well as problems of employees in grid structure. They are following this structure
because it is more dynamic than functional management that allows employees to
share information across task boundries and enhance their knowledge. It gives some
advantages such as ASDA is achieving objectives easily by adopting matrix structure
that helps employees and managers to work together and comple target in fixed period
(Stott, Stone and Fae, 2016).

Interrelation between functional units
Research with production: Research is the primary function that is related with
production of products and services in company and they are linked with organization's
structure and objectives. ASDA is following matrix structure whose main object is to
increase sale by creating interest of people. For this research manager visits market,
communicates with people and get their needs and wants. After knowing interest of
people manager coordinate with production manager to introduce that kind of products
and also share with employees by following matrix structure that helps to achive
business objectives (Organizational chart, 2019).
Marketing with sale: Sale of any organization needs marketing function that
helps to create interest of people and emphasis them to purchase new products and
services. Both functions are interrelated with each other as ASDA's marketing manager
uses magazine, banner, advertisement and social media to aware people from new
products and services and share with emoloyees in grid way by follwing matrix
structure. As result sale turnover of such company is increasing on continuously basis.
Therefore, functions are interrelatred and they are linked with ASDA's structure and
objectives (Neelankavil, 2015).

Illustration 2: Organisational chart, 2019)
(Source: Organisational chart, 2019)
HRM with Finance: In this function Human resource manager conduct interview
programme for the purpose of hiring candidates for marketing, operations and other
departement. So it get funds from finance departement to run their interview programme
effectively and helps to fill organizational objectives. Finance department helps HRM
department by providing funds and HRM deparment provides skills and experience
employees who perform operations effectively and also helps to achieve organization
objectives.
LO3
P4 Positive and negative impacts the macro environment
ASDA is a supermarket retailing company that provides different types of
products and services across UK. Macro environment is comprises with number of
factors that impacts on whole UK retail sector and operations of selected company.
Thus impacts of macro environment on UK retail sector is defined by using PESTLE
model.

Political factor: After Brexit, retail industry has faced lots of challenges such as
changes in governement rules and regulation which need to follow by company for the
purpose of running a business. For insatance, ASDA is retailing supermarket that deals
in grocery and other retailer products. After brexit government has changed rules and
regulation which impacted positively and negatively (Fleisher and Bensoussan, 2015).
Positive impact: It created a good opportunity for ASDA and other retailing
sector to expand business in to European market as trade barriers has been removed.
Moreover, it is expanding business in to chinese market that helps to increase
profitability.
Negative impact: If government of UK is not stable then it become challenges
for retail sector as well as ASDA to follow new trade policy.
Economical factor: This is always consider as important factor in context of
trade and business. The economy of worls has rebounded and growing continuously.
Such factor impacts on UK's retail sector after brexit such as increase in inflation rate
can reduce the sale opf retailing sector. If inflation rate is fluctutate then ASDA has to
purchase raw material at high prices that impacts on business such as:
Positive impact: Decreasing in interest rate and labour market the reatil industry
can be predicted to have grown to $28 trillion by 2020. It impacts positively on ASDA
such as labour market and economy both are in good shape and helps to increase
disposable income by boosting customer confidence.
Negative impact: Increasing in labour market and interest rate retail industry
cannot sustain for long term. Such as ASDA can face loss situation due to changing in
labour market and interest rate that reduces sales.
Social factor: It also impacts on retail sector and its productivity such as
customer preference and demographic changes are increasing continuously that
changes people's mind. Therfore, retail sector has to adopt new changes in their
products that helps to attracts customers. ASDA ensures that it is providing organic
food with better quality in order to meet with customer needs.
Positive impact: By providing organic food and better uality of products
according to customer's needs ASDA is growing its business effectively and making
continuously profits.

Negative impact: Not following social factor and not making changing it their
products ASDA can loose its regular customer that may reduce its profits.
Technological factor: It is important for retail sector to focus on technolgy in
terms of supply chain, customer service and sale. Digital technolgy helped retail sector
to increase number of players in retail industry. ADSA is using cloud computing by using
technological factor that impacts on business such as:
Positive impact: By using cloud computing technology ASDA is enjoying e-retail
that helps to increase supply chain, sales and customer service. Moreover, it uses
technology to make better retailer and increasing customer experience effectively.
Negative impact: ASDA can not sustain in competitive environment if it does not
accept new technology like cloud computing, e- marketing, e- retailing etc.
Legal factor: This factor is pain for retailer sector as they faces laws and
regulations which is related to labours. By following this factor retailer has to maintain
low prices of products to remain competitive and also need to follow labour laws to
sustain in competitive market. ASDA is follwing health and safety act that impacts on
busines:
Positive impact: By follwing health and safety act ASDA provides organic food
and also provide safety to its employees that helps to reatin them long time.
Negative impact: If ASDA is not following Laws and legislations then it has to
face employee turnover and lack of customers that reduces its profitability.
Environmental factor: ASDA is following environmental friendly approach by
focusing on environmental factor. This factor imapcts as:
Positive impact: ASDA is using recyclable material in different process like
packaging of products that creates customer's confidence.
Negative impact: Wasting of material and other wastes polluates environment
as result company can out from retailing sector due to not follwing environment safety
act.

LO4
P5 Internal and external analysis
Organization uses Porter's five forces analysis to determine the decision of
supermarket. Therefore, Porter analysis of retail industry are mentioned below:
Threat of substitute product: There are high threat of substitutes products in
retail industry that is reducing sale of business organization. In context to ASDA, there
are many stores like corner shops, organic shops and off licences which are substitutes
products (Laursen and Thorlund, 2016).
Bargaining power of buyers: In reatail industry the bargaining power of buyers
is higher because in UK there are many reatail industry who are selling same products
and they make purchase products in large quantities. Therefore, ASDA customers have
low bargaining power because they buys products as individual in small quantities.
Bargaining power of suppliers: The bargaining power of supplier is high in UK
retail sector as there are number of suppliers who sales raw material at low prices.
Thus, it is advantages for ASDA to avail products and raw matierial at low prices than
others.
Threat of new entrants: In UK retail sector, there is high threat of new entrants
because it need to make high investment for entering in new market. Thus, for ASDA it
has high threat for new entrants that restricts other retailer to come in UK market with
small investment, as it needed to arrange high capital.
Existing rivalry between competitors: Rivalry in UK retail sector is very high as
there are many competitors are exist in business market. ASDA has main competitive
super market such as Tesco, Morrisons, Sainsbury etc. that adopts various strategies to
attracts customers (Vom Brocke, Petry and Gonser, 2016).
SWOT analysis of ASDA
Strength Weakness
 It has 136 retail stores that gives
benefits of economy of scale.
 Largest supermarket in retailing
sector.
 Many competitors in UK market.
 Poor quality as noted by Renton.
 Take much time to manage and
coordinate all activities.