Business Environment Report: Morrisons, UK Supermarket Chain Analysis

This report provides a comprehensive analysis of the business environment, focusing on Morrisons, a major UK supermarket chain. It begins with an introduction to internal and external factors influencing business operations and highlights the importance of considering these elements for successful business planning. The report then delves into the different types and purposes of organizations, including public and private sectors, along with their respective legal structures. It further examines the size and scope of various organizational types, using examples like the UK government's transportation sector, Iceland (a private sector company), and voluntary organizations such as the NHS. The report also discusses the relationships between different organizational functions, such as sales and marketing, research and development, and finance, within the context of Morrisons. Additionally, it includes an analysis of the positive and negative impacts of the macro environment, internal and external analysis to identify strengths and weaknesses, and the interrelation of these strengths and weaknesses with external macro factors. The report utilizes PESTLE and SWOT analyses to provide a detailed understanding of Morrisons' operations and its position in the market, concluding with a summary of the key findings and implications for the company's future.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types and purposes of organisations with their legal structure..............................1
P2 Size and scope of different type of organisation....................................................................3
P3 Relationship between functions of various organisation.......................................................6
TASK 2..........................................................................................................................................10
P4 Positive and negative impact of macro environment...........................................................10
P5 Internal and external analysis to identify strengths and weaknesses...................................11
P6 Strengths and weaknesses interrelated with external macro factors....................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
There are two factors in the business environment one is external and other is internal factors
which have potential of affecting the functions of company including management, customers,
demand and supply, organisational culture along with regulations. It should be ensured that all
the major factors should be considered in order to make business successful (Hilton and Platt,
2013). This in turn will allow company to formulate effective planning for process. In this
report, company chosen is Morrisons. This company was started as an egg and butter dealer in
1899 and slowly it grow as a biggest supermarket in UK. They have made the policy of
expanding business within UK. There are various factors which are being discussed in this report
like functions of company in a macro environment, includes goal, culture, operations. As
through PESTLE and SWOT analysis, the working of company can be known.
TASK 1
P1. Different types and purposes of organisations with their legal structure
Public Sector Organisations
There can be many companies which are being regulated by the Govt. of respective
country within category of public sector. It mainly consists of both services along with the
company which do not work for profit motive. This kind of sector mainly includes education,
electricity, health care institutions, infrastructure along with many other companies (Welford,
2013). Finance for these kinds of companies is usually raised by the government taxes, fees and
through the transfers of funds from federal to state Govt. There is rapid growth of the public
sector due to the catering up of necessary work. But in the UK, growth of the public sector is
lesser than private sector.
Legal structure: Legal element generally consists of the two forms of this aspect which are
general Govt. Along with the public organisations which are being described below:
General government: Central government: This kind of Govt. mainly regulates the nation. In the UK, there are
various rules and regulations for companies and people. Major motive of these kinds of
legal authorities are being shared by the central and state for gathering taxes and thus,
printing money.
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 State government: As per the aspect, there is political nature of state Govt. Sharing of
the power and authorities is being done with national Govt. Main motive of establishing
the state Govt. is controlling entire activities of educational sector along with the
colleges for providing quality education.
 Local government: Local Govt. works for the small town or city, or for the backward
city. Thus, this is necessary for the local Govt., to keep any eye on these types of regions.
(Wetherly, 2014). There are various policies which are being formulated by Govt.
followed by the local public.
Public Corporations: Companies who mainly shares are publicly traded and thus held by
many of the shareholders which are known as public corporations. This kind of firm has limited
liabilities and thus offers its securities for the sales.
Private Sector Organisations
These kinds of companies are mainly operated by individuals who mainly work for
generating the profit. They are mainly free from the regulations and control of Govt. Examples
of private sector can be taken as sole proprietorship, partnership, small and medium sized
businesses like hospitality, retailers and many others (Moutinho, 2011). All these kinds of sectors
mainly contribute in the percentage of GDP of country. In the UK, private firms mainly
contribute around 89% in GDP. Main motive of associating of these companies is to launch and
establish and thus expand the area of operations within marketplace. Sales and productivity are
being enhanced at much higher rate as compared to the public sectors along with covering up of
large market share.
Legal structure:
 Sole trader: This kind of factor mainly includes the single person business which mainly
needs small amount of the finance which is being established by the companies. These
kind of companies are being referred to the unincorporated business which mainly face
many kind of liabilities for the debts along with various risks.
 Partnership: There are many issues which are being faced by the sole traders for running
their business in a successful manner. Hence, in order to overcome from this, formation
of partnership can be done. In this, there are two or more than two parties which are
being involved and thus, they divide the profit and loss incurred by company.
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 Private Limited companies: Private companies which are working for the motive of
earning more amount of profit. There is the liability of the member which are limited.
Profit of the limited companies are being distributed in the form of dividend.
 Public Limited Cooperatives: Major motive of behind this cooperative companies for
providing the essential service for benefiting the people. Members working within the
companies does not transfer society shares.
Voluntary organisation
This kind of organisation cannot be operated by a single body. This is basically called as
NPO and their mission is availing the benefits to society and economic factors. These kinds of
companies provide welfare to the society and profits or charity which is being gained is not
being shared by its members (Halbert and Ingulli, 2011). There are many of companies that aim
for some goals and thus, the policies and strategies are being adopted by them. Therefore, the
goals can be achieved with maximum efficiency and effectiveness
Charitable organisation: Basically, these are NPO, who works at without profit. Major
purpose is rendering out the financial services to the individuals which can easily accomplish
needs and wants along with education. NPO mainly provides advantages irrespective of the age,
gender, caste and many others which will help in the enhancement and development.
P2 Size and scope of different type of organisation
Public sector organisation
Govt. of the U.K. operate the local transportation as it is their main duty. Along with this,
they have the responsibility towards rail system, roadways, taxies, buses and many more. In
2016, it was decided by the regulatory board that the budget for this will be passed of 13 billion
Euros. Approx 42% of the finance were being arranged by them by fare and the remaining
amount was being funded within Govt. funds, borrowings, financial earnings, taxes and cross rail
resources and many more (Sena Ferreira and et. al., 2012).
Vision of the Govt. is to provide an efficient, trustworthy and secured transportation to
the public. The way of doing this is to alliance with stakeholders and industry partners.
Priority of the London transportation is to structure some sort of policies along with the
strategies so that they can provide maximum amount of benefit to the social and economical
factors. This is being evaluated as they are administration of 700 km network.
Private sector organisation
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Business is being operated by the Iceland within UK of food marketplace. This company
has been providing number of goods and services for the purchasers as they mainly incorporated
of dry items, meat, fruits, vegetables and many more. This company has around 2.5% of the
grocery market within UK.
Rendering products and services to the customers at reasonable prices is the main mission
of the company and thus they doe it by gaining attention of the customers and attracting them
towards products and services (Kelly and Scott, 2012). This will provide assistance in enhancing
the profitability and goodwill worldwide.
Mission of Iceland is to provide high quality services and products for the customers
within specific period of time. Items are being provided as per the customers demand in order to
increase its market share.
Main target of the company is to increase the image of the brand along with the market
share across the world. Assistance is being provided for enhancing the base of customer at the
global level. Market can be enhanced and thus company can attain aims and objectives of the
firm in better and effective manner. Goods are being sold to the people according to actual needs
and wants of the customers and thus it will help in enhancing the production along with the sales
of company and in result, it will bring benefits to company along with competitive advantage.
Voluntary sector
NPO are basically operated by arranging the finance through charity and other donation.
There are 3 million companies in the entire world who are operating the business and being a
NPO they mainly look out for providing welfare to the social and economical factors (Yoon,
2012). Revenue is not being shared among its members. Example can be taken up of NHS
which work in same field.
The main vision is, provide security to local public, to minimise poverty from country, which
will help in development of country. Instead of, main aim are as follows - :
 Better and effective services to provided to people by the Company in order to keep
people healthy.
 The proper time to time health check up should be provided frequently.
Shareholder analysis
There are many companies which needs help from the many of the people. Therefore,
support can be provided form number of shareholders as it will help the company into growth
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along with enhancement. This will provide assistance in enhancement of employees who are
attached and thus working for the company.
There are various kind of steps which will mainly cover the functions of stakeholder. At
starting investors needs to be determined by the authority of the company for conduction of
operations (Teece, 2012). In addition, there are some of the individuals who needs to be
determined who can get influence by the company's work and has been showing interests in
failure along with growth and success of association.
Besides this, this is main task of the employer to prepare list of shareholders in order to
ease the process of deciding the priorities. Therefore, distribution will be done by managers
according to the company's interest and that this can be much more explained by example:
(Source: Stake-holder's Mapping, 2017)
 High power – interested people
 High power – less interested people
 Low power – less interested people
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Illustration 1: Stakeholder Mapping

 Low power – interested people
As from the above report, it can be concluded that every shareholder will involve the
ways by which the motivation can be provided along with the data gatherings and elements
which influence shareholders.
P3 Relationship between functions of various organisation
Morrison, a supermarket chain was established in UK. And they provides their products
and services globally. Hierarchical infrastructure, being followed by the manager in order to
know about the roles by the member along with its responsibilities which are being attained by
them. In result, company mainly attain the effective aims and objectives in better manner. There
are various functions which are being performed by each and every sector connected to one
another. Major of them are described below:
Sales and marketing: This is being analysed that each and every company needs to have
the marketing factor in order to improve the sales. By this way they will be able to know about
actual needs and wants of the customers and thus provide them maximum level of satisfaction.
There are various tools and techniques which are being adopted like online sites, newspaper, and
many others (López-Gamero, Molina-Azorín and Claver-Cortés, 2011). By this, sales could
enhanced which in turn can help out in attaining effective profit ratios. This kind of sector is
being interrelated to research and development sector in order to know about needs and wants.
Along with this it is also linked with financial sector as there is fund needed for conducting
process of marketing.
Human resource: This kind of sector is highly essential for appointing suitable along
with the talented candidates for the job. Work is being allocated by manager after determining
skills and abilities so that tasks and objectives of company can be attained in effective and
positive manner. In order to enhance the skills and abilities of workers, training and development
sessions will be provided. This will give provide maximum level of motivation within workers
and they will be able to give high level of performance. This sector is highly related to finance
sector as appropriate amount of fund which is being needed by external environment. This will
also bring innovation within workplace.
Research and development: Research and Development department is big department
for every organisation. After the research, authorities of Morrisons will be get to know actual
taste of the customers and thus provide them effective services in order to give maximum level
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of satisfaction (Avramenko, 2012). This will in turn help out company to attain competitive
advantage. There are some kind of method which can be utilised questionnaire, interview and
many more. This has been analysed that the department which is being connected with finance
unit as this will be needing handsome amount of fund and thus in ease manner market research
can be conducted and thus enhance the products among the people.
Finance: This type of sector is highly essential for each and every company. Budget is
being formulated for every kind of division and thus it needs to be followed. This will help in
minimising the wastage along with the unwanted cost from the business procedure. This has
been evaluated regarding connecting with the finance sector in direct or indirect manner. Profit
will be enhanced only if the expenses get reduced (Li and et. al., 2011). In result, there will be
high competition within the marketplace and along with that customers base will be enhanced by
providing them products and services along with the demands.
Organisational structure
This is divided into four kinds which is being defined below:
 Function based: Hierarchical formation is isolated based upon various capacities which
will perform in an association (Organisational Structure. 2018.). This gives the entire
association is sectioned based on divisions like human asset, showcasing, generation,
back and so forth.
 Geography based: This gives the association is sectioned based on regions. This will
gives the vast number of chance with respect to recognizable proof of the request and
inclinations of clients of various districts. It is compelling technique to isolate the
hierarchical structure of Morrison's in light of the fact that they have their business tasks
in numerous nations
 Product based: This incorporates the separating up of on a hierarchical structure based
on the items which are give by association. For insatnce, Morrison's bargains in various
items like basic need, general stock and money related administrations. In this way, the
association is organized based on such differentiated business exercises.
 Consumer based: This gives the authoritative structure based on their distinctive
clients. It helps in recognizable proof of the diverse needs of clients and fulfilment of
their necessities.
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Illustration 2: Organisational Structure
(Source: Organisational Structure, 2017)
Thereafter you have the organisations functions, such as:
Illustration 3: Organisational Functions
(Source: Organisational Functions, 2017)
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TASK 2
P4 Positive and negative impact of macro environment
This can be stated as an methodology which is being utilised by Morrisons in order to
track and monitor social and economical environment which has been operating its products and
services to the customers. Its scientific proof methodology which mainly provide assistance in
attaining growth and success within the food sector in future along with providing help in
minimising the errors.
Political Factors: These factors include the political rules and regulations of the country. UK has
made modifications within rules and regulations along with the company's food industry in the
retail sector. UK Govt. has been imposing the tax and its duty due to which entire balance sheet
of the company and that will may be changed and can directly make an impact on the
relationship with customers (Hämäläinen, Näyhä and Pesonen, 2011). This must be followed by
the company along with customers as this will help in deducting the unwanted mistakes. This
will provide positive impact on the perception of the people. In this, If the company is
conducting the business in unethical manner, then this can put negative impact on people and
thus reputation along with well. Thus, it will impact on the image of the brand in negative
manner.
Economic Factors: This kind of factor will put the negative impact on the potential customers
which in turn can directly can affect the long term economical conditions. There are various
kind of factors which mainly includes per capita income of person, inflation/deflation rate,
minimum wages rate, unemployment in country, unskilled labourers, taxes along with the health
crisis within country. This kind of factors can affect the ways by which Morrisons can manage
the good and services. It is highly needed by the business organisation for maintaining the
market sustainability as it will mainly provide the positive impact on an individual. But if the
rate of taxes increases then it can impact on the person and that too in negative manner. This can
reduce the client base.
Social Factors: This kind of factor mainly varies from culture to culture, town to town which
analyse how much the social environment regarding the cities of UK can be effective for
Morrisons. Variety of goods and service are being distributed within UK and thus they have
approx 500 outlets for each and every section of society. This will allow company to to gain
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