Business Environment Report: ASDA's SWOT and Macro Factor Analysis

This report provides a comprehensive analysis of the business environment, examining different types of organizations, including private, public, and voluntary companies, with a focus on ASDA as a case study. It explores the size and scope of organizations, differentiating between micro, small, medium, and large enterprises based on turnover and employee count. The report delves into various organizational structures, such as functional, divisional, and matrix structures, highlighting ASDA's adoption of the matrix structure. It also discusses transnational, international, and global organizational structures. Furthermore, the report conducts a SWOT analysis of ASDA, analyzing its strengths, weaknesses, and the interrelation of these factors with external macro factors. The report also includes discussions on profit share, market share, and the interrelationship between organizational functions and ASDA's mission and objectives.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Different types of organisations.............................................................................................1
P2Size and scope of the organisations.........................................................................................4
P3 Different kinds of structures relating to size and scope of operations...................................6
P4.................................................................................................................................................7
SWOT Analysis of ASDA can be described as below:...............................................................8
P6 Explain how strengths and weaknesses interrelate with external macro factors..................10
CONCLUSION:............................................................................................................................11

INTRODUCTION
The total of institutions, all different forces which are not in the control of business
bodies or enterprises, but there is still dependence of business as they totally effect the
sustainability and the outcomes of business bodies is called Business Environment. They are
capable of grabbing the Business opportunities and also helps in tapping of worthy resources.
Future planning is very important in Business environment. There are various types of
companies in Business environment i.e. private , public and charitable companies. Private
owners owns the private companies and have the right for keeping shareholders and issuing
stocks but their shares do not go publicly. Secondly public companies are there which has initial
public offerings and does trading on one stock exchange. Thirdly Charitable company is there
which are not made for profit work. Here, the types of enterprises, Business purpose of them,
profit share, transactional, international and global structures ad overall organisational mission
and vision will be described.
P1 Different types of organisations.
There are various types of companies such as Private Companies, Public Companies and
Voluntary Companies. The main Difference and business purpose of different types of
companies are described below.
Bases of difference Public Private Voluntary
Ownership If somebody needs
help and health
services then there are
public bodies in which
NHS(National Health
Services) stands out
for all of them. It is
funded publicly and a
national healthcare and
every constituent
country is blessed with
Walmart made ASDA
the subsidiary of it
which has its
headquarters in
LEEDS, WEST
YORKSHIRE. It came
into being in 1965.
Here the shares are
rapidly sold and
bought. It is worldwide
superstore provides
A company founded
by 20 independent
non-profit
organizations aiming
on the relief of poverty
worldwide is an
OXFAM International.
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it (Whyte, 2017). It
came into being on 5th
July 1948.
various services which
are in reach. It is called
PLC. ASDA owns
almost three types of
stores. Firstly the
space with the average
selling of 42000 sq ft.
Secondly Since merger
ASDA Walmart
supercenters have been
renewed. And lastly
fresh food lines for
Asda Fresh stores. An
important point is
Asda is very proud of
providing petrol at low
cost.
Meaning An organization which
is funded through
public , can be said
like from taxation and
provides low-cost
healthcare to the U.K.
Residentials. And
where medicals
facilities are awarded
through subsidiaries
and prescriptions can
be free according to
the demanded
situations.
Two separate
companies combined
to form ASDA . As
they play a vital role in
the local community
that’s why they are
called the stores of the
community (acaruso,
Gasler and Hofer, 2017).
They portray three
believes i.e. perfect
service providing to
the customers, giving
due respect to the
Oxfam is there to
decrease the rate of
poverty by mobilizing
the humanitarian
power. Whenever
crisis hits Oxfam helps
to reconstruct the
livelihood .
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person, and seek for
excellence.
Business Purpose The business purpose
focuses on clearness
and rising voice of
patient for
fundamental
improvements(Marasi
Bennett and Budden 2018).
Focused is on general
need.
Looking at business
ASDA never
compromises with the
quality of products and
believes in
sustainability. By
decreasing the
operating cost and
easing the customers
with low prices is the
motto of ASDA. Main
purpose is to produce
affordable goods and
services for each and
every individual.
They are non profit
Organisation working
with 3000 partners
Mission & Vision Main mission lies in
delivering quality
performance and
providing excellent
health services, to
provide health services
which are effective
and efficient and are
counted on the policies
of susrainibility ,
affordability and
accessibilty. The main
business stays in the
Main mission lies
multiplying profit,
helping out
community, business
growth rate. They set
achievable ,
meanable , realistic
and timed objectives.
It focuses on the
expansion of its
business
The mission and
vision of OXFAM is
focusing on the
development of work ,
having the right to get
heard properly,
providing solutions
based on their needs .
Their core vision is
having a world with
zero poverty.
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treatment , pevention,
and care of patient.
P2Size and scope of the organisations
Basis Micro Small Medium Large
On the basis of
Turnover
An enterprise
whose investment
in machinery and
plant doest go
beyond the level
of 25 lakh(Team
2013). In service
sector their
investment
doesn't exceed to
10 lakh and are
involved in
providing
services and does
investment for
equipment’s. It
has less turnover
from PhP 3
million. Micro
Enterprises
owners earn to
support their
families and their
own selves.
An enterprise
whose investment
in machinery and
plant is between
25 lakh and 5
crore in the field
of manufacturing
and rs. 2 crore in
service sector is
called small scale
industry. More
employment
opportunities are
generated and
high GDP rate is
developed. This
industry started
for the
enhancement for
liberalization.
An enterprise
whose investment
in manufacturing
is between Rs. 5
crores. to 10 crore
and remain in
between 2 crores
and 5 crores in
service sector.
They are provided
special assistance
for investment
planning because
they play an
important role in
reducing
unemployment
and production in
the country.
An enterprise
which makes the
turnover of 1.5
billion Euros
annually and
takes labor
employment,
machinery and
make use of
Factory Actor
Disputes Act.
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On the basis of
employees
Micro enterprises
consists highly
upto 10
employees.
MSME are
capable of
providing
maximum jobs.
It has a whole
unit of employees
of less than 100
employees(Makos
J. 2015).
The number of
employees in this
sector are more
250.
It has the
employment
power of 5000
employees.
On the basis of
scale of
Operations
In is very much
accepted by the
Indian economy
and helps in job
creation and
pushes for
entrepreneurship
It conducts its
operations in
bakeries,
convenience
stores, internet
related business.
Some small
businesses require
license and
certification for
e.g. liquor shops .
In Ethopia
Medium size
companies are
funded by their
Government. In
Somalia medium
size companies
has more than 30
employees but
less than 500
Tea industry, Jute
industry, Cement
industry are
counted in large
scale industries
PROFIT SHARE :
Profit share of ASDA falls by 19.9pc to £657.2m as compared to £820.1m and the sales
also fell from 3.2pc to £21.7bn. The Costs which were involved for restructuring holding
companies of ASDA , their operating profit tumbled by 11.5pc to £1.01bn. Instead of all this,
Asda is still capable of paying a dividend of £450m to its heading company(Grundy T. 2006).
MARKET SHARE :
The performance of sales was came out of their expectations. Asda currently noticed a
2.8pc slip in quarterly sales which can be said as an improvement from the previous quarterly
year. This supermarket has suffered II continuous decimation oF sales from the earlier year.
Asda currently Took over £4.4bn of discount retails and now Asda is providing more
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deliberately to the customers specially in services, fresh foods and other availability
(Karagiannopoulos Georgopoulo and Nikolopoulo. 2005).
P3 Different kinds of structures relating to size and scope of operations
There are different kinds of organizational structures which sometimes impede its level of
progress towards achieving its targets In Functional Structure department is dependent on the
knowledge and talent of its employees and every part of organization is segregated for a special
reason (Business Environment, 2017).. In Divisional Structure large companies use divisional
structure for the coverage of particular market areas. The advantage of this structure is that the
requirements can be easily achieved and operated and each and every division operates
independently. Combination of divisional and functional structure is matrix structure and all
benefits of both the structures i.e of functional and divisional can be met in this structure. ASDA
is a company which follows Matrix structure. It shifts the company towards a better
performance. It has broad range of products and provide services to its end customers, thus
segregate itself from other similar firms and expands its scale of operations by performing
different kinds of activities.
Transnational, International and Global organization Structures :
Other kinds of structures are transnational, International and Global organizations which
makes particular mark in the retail market in deciding the the sales, profit and availability of
products . Transnational pays attention to the local market towards maintain their facilities and
their business runs in more than one country. In International structure there is just zero kind of
investment in the firms running outside the country because there is a business of export and
import in between the international and national firms. They have a single branding and their
office operates in a particular country. Global organisations operates globally and invests
worldwide. It involves many different countries of the world. There are many examples of global
organizations i.e. EU, NATO, OAS etc.
Interrelationship between unctions and organisations mission and objectives:
The vision and mission of ASDA which has its own functions to become a primary brand in the
retail sector of UK is going through different functions Following are the functions:
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Finance: Operations have to be carried by each and every company which is the primary function
of company needs finance no matter whatever the scale and size it possess. An overall budget
decides the annual revenue of the company which is also dependent on the demand of customers
(Carlton and Perloff, 2015)..
Marketing : Company carries a vital strategy of Marketing to promote its brand and for the
growth of its company. It enhances its profit and sales. We can take the example of ASDA which
is a leading superstore in retail market.
Human Resource: It is an important part in maintain quality of products just as it happened in
Asda.
GROWTH AND SUSTAINIBILTY:
Growth and sustainability of industries depends on factors like turning from toxic to non-
toxic materials, using minimum energy for production processes, turning from coal and oil to
solar energy and utilizing materials which consumes less energy.
P4
There are many companies in UK such as Marks & Spencer And ASDA.
Marks & Spencer which is a British retailer in more than 30 countries is biggest retailer of
clothing in UK. Few years back it strike on credit crunch which was a spectacular effect on the
company suffered from many political, economical, environmental, legal, technological changes.
Poltical Factor:
Planning for hazardous conditions, managing assessment of risk, controlling risk were
situations for which the government set some rules and regulations for the companies. If the the
companies do not follow these rules then they have get shut down in some conditions or charged
with heavy amount of fine(Pines J.M. 2006).
Economical Factor:
Presently the economic scene is not certain which is constantly affecting the retail sales,
because the public is not having extra money to spend on luxurious items. Due to this Marks &
Spencer have trimmed employment by 2% which means that 70,000 of the staff members have
been evacuated. They have to change their outlook to stay ahead and beat recession period.
Another pressure can be told as of inflationary pressures coming from outside the world. To
give a cut throat competition they have also planned a 20% of Wine and Champagne.
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Sociological Factor:
Society has changed in some years. He has decided to become multi channel retailer by
selling food online which is a part of his pre decided plan’s and Mark & spencer both are awaken
to current issues which creates a major effect on market. Theses supermarkets are accepting the
challenge of street clothing by catching the fashion trends and providing with less expensive
products.
Technological Factor:
Managing the brands effectively is very important in retail market which needs the
conveying of position of brand directly to the customers (Cai and Yang, 2014). The website of
M&C is very appealing and filled with bright colours. It gets constantly renewed with new M&S
brands. In todays world technology has a very wide impact on business environment. Customers
often purchase through websites and feel themselves comfortable. E-commerce has synchronised
business from all around the world .
Legal Factor:
Legislations which regulates acts never remain constant. They keep on changing with
different issues and new laws regarding Health & Safety. Changes in re-training of the business,
updating of tax changes in the products & business. For. Eg. Fair Packaging and Labelling
Act(1996) is an act for the labelling of goods and regulation on packaging of consumers.
Environmental Factor:
 Companies are being forced to their manner when the talk comes on the
manufacture of materials. M&C itself wants to promote an ethical trade and a health
promoting type business. It is is in the favour of zero waste i.e. no wastage to given land
(Caiazza, Shimizu and Yoshikawa, 2017).
SWOT Analysis of ASDA can be described as below:
Strengths:
Strength can be described as the internal perspective of any organisation. ASDA is
having a strong management system. Asda is also famous for its economies of scale and superb
technical skill. Walmart which is the head company of ASDA has currently declared further
management changes at international level in UK, Canada and China. It has its own progressive
culture and this innovative skill takes its retailing power to a more higher level .
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Weaknesses:
Compared to other rivalries Asda doesn't make its presence globally. They have fear of
local vendors because they don’t have the ability to sell their product prices across the
boundaries. Asda lack Mini stores and doesn't have any loyalty card to sustain customers like
Sainsbury's local or Tesco express. Products are not as good as of other same brands.
Opportunities:
Many customers are attracted in UK for shopping and thus for Asda. It is expanding its
areas in the field of jewellery, department of photo, pharmaceuticals and opticians. It is also
undertaking its projects and planning to expand its market in China , India etc (Demil and et.al.,
2015)..
Threats:
There has always been a threat from the small scale companies like Lidl related to price which
results in maintaining of low brand prices. And finally the Central Govt. constant changes its
policies which effects its business environment.
FIVE FORCES MODEL:
Threat of New Entrants:
In retail industry to survive, a huge amount of capital is required for the investment
purpose, and both market and local knowledge is essential and as a new entrant one has to go for
a tight competition with other market leaders who already has captured the market.
Power of Buyers:
Customers only purchase the products from that supermarket which provide best
services and high class satisfaction to the customers. Asda sells their products at low price and
provide satisfactory services, better quality, different types of products and fulfil their needs.
Power of Suppliers:
The goods to the retailer should be provided on the supplier’s demand. If the suppliers want then
they can move on to the rival parties for the better prices. In this case Asda is having around 500
suppliers providing variety of goods to itself and satisfying customer needs on the demand of the
superstores of Asda (Business Environment, 2017)..
Power of Buyer:
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Customer uses its power to determine the quality of product from different supermarket.
Products which give highest satisfaction and is of low price becomes their primary choice.
Threat of Substitute Products:
Substitute products are different from others in various manner like services, branding,
price and quality. There is a pressure through competition from various non-licensed shops
providing Substitute products to Asda. Same merchandises are being given by supermarkets
which are different from one another in monetary value (Carlton and Perloff, 2015)..
P6 Explain how strengths and weaknesses interrelate with external macro factors.
Many external and internal factors have affected the firms of UK adversely and in a
favourable manner. Social structure has changed and dur to revolution new factories have new
mode of production has evolved. Socially healthy lifestyle is vanishing and UK firms are having
keen interest on maintain health by bringing new products. Politically EU is applying more rules
and regulations and which is resulting in war and having direct affect on taxes, employment and
consumer rights. So specially Asda is employing more and more employees in its firm
(Chandler, Hikino and Chandler, 2009). Economically the firms experienced a failure after
recession. Nationally and internationally it these laws are bringing competitive pressures, cost of
credit, supply &demand of labour is differentiating so the economic environment of the firms are
constantly changing. Looking at the external factors technology has played a vital role in
changing the social environment of the market structure. Technology has brought the customers
more closer from all around the world and now the consumers can purchase the products of their
own choice through digital marketing or through internet.UK firms are making the use of mobile
apps with these clicks and are collecting delivery services and thus satisfying customers.
Companies attract customers by building good looking sites. These factors decreases crowd ,
pollution and improves business environment. All superstores are running to use technology to
their best level. Environmental all companies are supporting green economy and for them
organic food is very important. Every firm is having a little pressure of being environment
friendly by using wastage and describes itself a environment friendly company. UK firms are
moving towards organic food for eg.Asda due to the customer demand. Recycling of materials
are in approach in different types situations like the products which are already packed can be
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easily recycled. Majority of people faced unemployment after recession in 2008. Socially and
economically UK firms are getting a burly framework like getting a great circle of demand in
fashion industries. But the growth of rising markets are presenting threat and opportunities to the
upcoming period of time. Other than this, increment and decrement in tax affects the demand
patterns of the company. Some laws like Employment law, data protection law, bureaucracy,
tariffs directly affect the system of business.
CONCLUSION:
Thus, it is concluded that how socially, politically, technologically, environmentally,
legally a firm has a deep impact on its business environment. Porters five model immensely work
out on the buying and purchasing power of customers and many companies work on different
kinds of structures. ASDA has been a perfect example in the explanation of external and internal
effect on the firm and in the case of organisational structure. Firms develop their scale of
operations according their organisational structure and maintain their growth rate and margin.
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