Business Environment Analysis of Two Contrasting Businesses

This report provides a comprehensive analysis of the business environment, focusing on two contrasting businesses: Asda Stores Ltd., a for-profit international retailer, and Welcare, a local non-profit charity. The report details the types of businesses, their purposes, and ownership structures, highlighting the differences between a public limited company and a charitable organization. It identifies and describes the stakeholders influencing each business, including managers, employees, customers, and suppliers, explaining their impact on business objectives. The organizational structures of both businesses are explored, demonstrating how these structures facilitate the fulfillment of their respective purposes. Furthermore, the report examines the influence of economic environments, such as booms and recessions, on business activities, and considers the impact of political, legal, and social factors. The analysis provides insights into how these businesses adapt and operate within their specific environments.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Describe the type of business, purpose and ownership of two contrasting businesses..........1
P2 Describe the different stakeholders who influence the purpose of two contrasting
businesses....................................................................................................................................2
P3 Describe how two businesses are organized..........................................................................3
P4 Explain how their style of organization helps them to fulfill their purposes.........................4
TASK 2............................................................................................................................................5
P5 Influence of two contrasting economic environments on business activities.......................5
P6 Political, legal and social factors are impacting upon the business activities .......................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
.........................................................................................................................................................8

INTRODUCTION
In this current scenario, business environment plays important role because its directly
connected with all employees as well as their working performance. Due to, it is very necessary
to properly analyse and maintain working surrounding because all workers will complete their
task and works as per internal environment of organisation. Moreover, this research project will
be discussing about different type of business firms as well as their major purposes (Iskanius,
Page and Anbuudayasankar, 2010). In the addition of this, will be defining several stakeholders
who directly influencing on purposes and targets of contrasting businesses. In the other words,
organisation styles will be explaining which assist to full fill their purposes in appropriate and
effective manner. Business environment affecting by several factors such as legal, social and
political issues will describing.
TASK 1
P1 Describe the type of business, purpose and ownership of two contrasting businesses
For this assignment there are two businesses going to select, one which will be local and
not-for-profit organization and the second will be an international business and for profit. The
two businesses have chosen to use for this task are Asda Stores Ltd. and Welcare, Reigate.
Type of Business: Asda Stores Limited, commonly known as ASDA, is the second largest retail
store and a national public limited company (Aterido, Hallward-Driemeier and Pagés, 2011). It is
a profitable business and it is the subsidiary of American company Wal-Mart. It was founded in
1949. Furthermore as Asda is a profitable business it is also in the private sector. Welcare is a
local charitable, non-profit organization. They earn no profit out of their work however do accept
forms of donations and fundraisers. The charity was set up by a church over 100 years ago. It
was originally founded in 1894. Furthermore as it a nonprofit business and is giving service it is
in the public sector.
Purpose of the business: A charity is a group of profitable people whose aim is to give a service
and help those in need. Welcare charity provides services which include social work and family
support, support groups and life skill workshops and also a children’s health clinic. They work to
keep families together, and encourage parents to give their children a happier childhood. Asda is
a retail supermarket and the purposed of Asda is to make profit and to supply goods to
customers. It sells general merchandise such as food, drink, clothing and various other items. It
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also has services such as insurance, financial services and a mobile telephone network. Business
Ownership and level of liability: Asda was founded by Associated Dairies & Farm Stores
Limited in 1949. This is situated in Leeds. The company has limited liability, therefore any debts
within the company are paid by shareholders investment and this means the owner wouldn’t have
to sell their assets and belonging to pay the debt. Being a shareholding company you can freely
sell shares, this is an easy way to have money contributed to the company. Welcare was founded
in 1894, and was originally called The Diocesan Association for the Care of Friendless Girls.
This company has limited liability, this means any debt is paid for and the owners do not have to
sell any assets (Aula, 2010).
P2 Describe the different stakeholders who influence the purpose of two contrasting businesses
Welcare Stakeholder: Stakeholder is a person, group or organisation that has interest or
concern in an organisation. Stakeholders can affect or be affected by the organisation’s actions,
objectives and policies. Some examples of key stakeholders are creditors, directors, employees,
government, owners (shareholders), suppliers, unions, and the community from which the
business draws its resources
Illustration 1: Stakeholders,
2017
(Source- Stakeholders, 2017)
The stakeholders of Welcare are: Manager – The manager influence NHS, because the manager
is the one who makes decisions everyday which includes what medicine or service should be
offered should be offered and the manager also decides who he/she should take into service or
fire (Blanchard, Tolbert and Mencken, 2011). Doctor’s have influence on the patients as they
have to help people by treating patient’s illness, providing advice and support, and seeing the
effects of both ill health and good health from the patient’s point of view. They have to examine
the symptoms presented by a patient, and consider a range of possible diagnoses. If they are
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unable to do this it will affect the patients and the company as the patients will lose their trust in
the doctors, and as a result it will affect the company’s reputation. Patient/Client have an
influence on the company, because without the patients/clients NHS won’t have any service to
offer. This means that if there are no patients then the Government will decide that the company
should shut down (Chavis, Klapper and Love, 2011). Admin and Clerical staff have a great
influence on NHS, as they are responsible for paper work e.g. keeping patients records and send
e-mails and letters to patients regarding their health.
ASDA’s Stakeholder: The stakeholders of ASDA are: Employees influence ASDA because
employees are the people who are responsible to carry out variety of business activities, e.g. they
are involved in decision making of the business, controlling the Health and Safety regulations
and planning the merchandise. Customers want low-priced, good products. Modern customers
also have high expectations of organisations. They will want them to get involved in the local
community. They will then want to know about them. ASDA stores and depots have community
notice boards and a monthly magazine is produced which features community events. Suppliers
at a national level are the very large providers to ASDA. They will want to sell goods in volume
at good prices. This gives them economies of scale (Fernando, 2011). ASDA has worked hard at
building up links with local suppliers. It works with small and medium-sized businesses that are
able to provide products for groups of stores at terms that suit them. Colleagues like to serve the
community. The retail industry is not highly paid – customers demand low prices and operations
require a large number of colleagues. So working with the community helps to motivate
colleagues. All the events that ASDA holds are shared in an in-house monthly newsletter.
P3 Describe how two businesses are organized
An organization needs a structure in order to achieve its purpose as a business. An
organizational structure is also sets out how communication flows in the organization and to
whom certain people report to.
• Function: this is a discrete part of an organization designed to meet a specific purpose such as
production, marketing or accounts
• Geographical area: for example international, North W est, Wales, Midlands, London.
• Product groups: for example, a drinks manufacturer may have separate divisions for fizzy
drinks, soft drinks and maybe alcoholic beverages.
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• Type of customer: for example, many banks have sections that deal directly with individual
customers and those that deal entirely with business customers.
ASDA
ASDA is a public limited British global grocery and general merchandise retailer. It is the second
largest retailer in the world. With stores in 12 countries across Asia, Europe and North America
it is the grocery market leader in the UK, the Republic of Ireland, Malaysia, and Thailand.
Welcare:
Welcare was founded in 1894, and was originally called The Diocesan Association for the Care
of Friendless Girls. This company has limited liability, this means any debt is paid for and the
owners do not have to sell any assets. Welcare is a local charitable, non-profit organization. They
earn no profit out of their work however do accept forms of donations and fundraisers. The
charity was set up by a church over 100 years ago. It was originally founded in 1894.
Furthermore as it a nonprofit business and is giving service it is in the public sector.
P4 Explain how their style of organization helps them to fulfill their purposes
 Serve customer with respect by the ASDA and conduct a survey on desired
products which really demand by them.
 Provide products which aid in fulfil the requirement of daily lifestyle.
These strategies apply to good customer service and good customer service helps to improve
their sales and profit. By providing that king of customer service ASDA improve its customer’s
loyalty, as they know what customers need and how customers want to be served. More
customers mean more sales and more sales mean more profit (Halbert and Ingulli, 2011).
ASDA’s main aim is to gain high profit. High customer service also helps ASDA to improve its
relationship with customers. A good and loyal customer not only perform repeat purchase but
also recommend them to others.
ASDA’s style of working helps them to increase their customer service and make their customer
feel joyful while working. As friendly style of working will also help them to impress their
customers. Basically that style of working will help ASDA’s staff being motivated, so they will
work more impressively.
Nowadays ASDA has created its own branded products, including ASDA debit card, ASDA oil
station, ASDA grocery, and etc. This style of working will help them reduce their transport cost
and packaging cost. They can generate more profit using their own brand. Customer will buy
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their products because their own brand is cheaper than others (Hamilton and Webster, 2015).
Their purpose of providing cheap good and generating high profit can fulfill using this style of
working.
TASK 2
P5 Influence of two contrasting economic environments on business activities
(Source- Demand Curve, 2017)
Boom: Boom With boom, this means that it is a period of fast economic growth; this means that
it is an output is high due to being increased demand, this would mean that the unemployment is
lower than it should be. With the business confidence means that it may be a high leading to
increased investment. This therefore means that with the consumer confidence, which then may
lead to extra spending (Iskanius, Page and Anbuudayasankar, 2010). With boom what happens is
that they may have the experience of businesses producing more products for them to sell. Boom
is also shown as a period of time in which sale of a product or a business activity may increase
rapidly. In the actual stock market, the booms are associated with clothing markets, rather than
busts are associated with food industry’s markets with the actual cyclical nature of the market
and the actual economy in general suggests that with every strong economic growth.
Recession: With recession this means that it may be a period on time in which the economical
growth may slow down, and the level of output may actually decrease rather than increase or
rise. This therefore means that with the unemployed that it may have the chance on increasing. If
this happens then it will be bad for businesses from the fact that they may lose confidence and it
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Illustration 2: Demand Curve, 2017

also may have to experience the reduce on investment. This would be bad because it would mean
that their customers may save up instead of spending their money buying products from the
company. During a recession period, the actual economical activities actually slow down. But
when demands starts falling down then the overproduction and future investment plans are also
later on given up. There is also a steady decline in the output, income and also employment,
prices and also profits (Moutinho, 2011). The businessmen then lose their confidence and even
become pessimistic in which is negative. This then reduces investment, the banks and the people
therefore try to get greater liquidity, so that credit also gets contracts. With the expansion of
businesses stops then that means that the stock market would also fall along with it.
P6 Political, legal and social factors are impacting upon the business activities
Political impacts:
Political stability is usually defined as the state of peace that is normal experienced in a country
from the activities from the government and also the government in this situation will make
decisions and keeping the best interests in mind for people.
The conservative party that is normally referred as the Tory party and is a centre – right political
party in the UK and as of 2013 it has become the largest political party in the UK and also the
largest single party in the house of commons with 303 MP’s. Govt initiatives: is when the
Government can support business through grants and tax reductions and an example of this is the
solar panels grant.
Also when the government chooses to Investment finance this then involves selling part of your
business (‘shares’) to an investor. The investor will then take a share of any profits or losses that
the company makes (Siewiorek and et.al., 2012).
The International Monetary Fund describes itself as “an organization of 188 countries that works
to foster global monetary cooperation, to then secure financial stability, facilitate international
trade, promote high employment and sustainable economic growth, and reduces poverty around
the world.
The Government may change the tax rates up or down this will be to try help boost the economy,
an example of this is VAT this means all non food and adult clothing range will need different
prices on the shelf edge labels this then means staff will then have to go change the SEL’s (shelf
edge labels). Although this then will change the profitability and finance department of the
company as they will then need to change the profit sheets that report back to the business.
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Legal impacts:
The legal impacts are that ASDA must follow the law, and an example of this is the trade
description act, this is where the product most be described accurately otherwise it can cause an
issue and an example of this the big issue with meat earlier this year, so it is extremely important
that you describe the product well and accurately if not then the trading standards will have no
other choice but to get involved.
Consumer protection is when a group of laws and organisations have designed to ensure that the
rights of consumers, these are put in place to hopefully prevent businesses that engage or are
planning on engaging in fraud or specified unfair practices to try and gain or taking an
advantage over competitors.
FSA is the foods standards authority, this is where they regulate the amount of salt that is
allowed in products and also the amount of palm oil that is allowed in the products and this is
from the sustainable rain forests.
Health and safety standards are the most important, and for all the new workers will have a full
day having an induction before that are allowed to start their job, they are also shown around
their work place and they are also shown the areas that they won’t be allowed to go due the
dangerous machinery (Welford, 2013).
The legal frameworks is where the business chooses the way it operates, this will then determine
who has what role and share to the business, this will also determine the relationships between
investors, employee’s customers etc.
Social impacts:
The social impacts that ASDA may face are the difficulty to recruit the right people for the job in
the stores or the offices depending on where they will be based, also most of the workers that are
in the stores are an unskilled workers on the minimum wage given .
ASDA is a company that will support charities and the main one they support every year is
tickled pink, they are always thing outside the past ways they have raised money to, give
customers a new product to buy to support the charity.
ASDA has a company cannot discriminate anyone from having a disability, different religion or
if they are pregnant and other things on this terms and when they are employed by the company
or if they are in the HR Department they are then recruiting they are also not allowed to ask
questions in these areas.
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ASDA like to support their local community and an example ASDA helped out in a local park in
Bradford, by tidying it up and planting new plants to make it look more presentable and cleaner,
they also do talks in schools in local areas and give out free stock for sports days.
CONCLUSION
From the above mentioned this research report it has been concluded that, business
environment should be maintained and controlled because employees of the organization has
been played their task and works according to that. This assignment has been defined about
different type of organizations and their structured. In the addition of this, several major factors
and issues has been explained which directly impacted upon organization whether positive and
negative in nature.
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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.
Aula, P., 2010. Social media, reputation risk and ambient publicity management. Strategy &
Leadership. 38(6). pp.43-49.
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.
Fernando, A. C., 2011. Business environment. Pearson Education India.
Halbert, T. and Ingulli, E., 2011. Law and ethics in the business environment. Cengage
Learning.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
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.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
Siewiorek, A., and et.al., 2012. Learning leadership skills in a simulated business environment.
Computers & Education. 58(1). pp.121-135.
Welford, R., 2013. Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Online
CEOs appear increasingly co`ncerned with the business environment. 2015. [Online]. Available
through: <http://blogs.lse.ac.uk/businessreview/2016/02/22/ceos-appear-increasingly-concerned-
with-the-business-environment/>. [Accessed on 19th August 2017]
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