Asda and Bestway Case Study: Business Environments

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Business and business
environment

INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................2
P1 Explaining the purposes and types of businesses such as private, public, voluntary and
legal structures.......................................................................................................................2
P2, M1 Explaining the scope and size of organisations.........................................................3
TASK 2......................................................................................................................................5
P3, M2 D1 Describing the relationship between business functions and how they are linked
to business structure and objectives.......................................................................................5
TASK 3......................................................................................................................................8
P4, M3 Positive and negative impact of macro environmental factors upon organisation
operations...............................................................................................................................8
TASK 4....................................................................................................................................10
P5, M4 Conducting external and internal analysis of organisation to determine the
strengths and weaknesses.....................................................................................................10
P6, D2 Explaining how the strengths and weaknesses are interrelated with external macro
environmental factors...........................................................................................................11
CONCLUSION........................................................................................................................13
REFERENCES.........................................................................................................................14

INTRODUCTION
A business environment can be described in a sum total of all the internal and external factors
that has impact on business operations. For instance, rules and regulations is an external
factor but it has impact on business operational activities internally. In this regards, the report
will cover purposes and types of businesses such as private, public, voluntary and legal
structures including the scope and size of organisations. In addition, relationship between
business functions and how they are linked to business structure and objectives including the
positive and negative impact of macro environmental factors upon organisation operations
will be discussed in this report. Finally, it will conduct external and internal analysis of
organisation to determine the strengths and weaknesses and how the strengths and
weaknesses are interrelated with external macro environmental factors.
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TASK 1
P1 Explaining the purposes and types of businesses such as private, public, voluntary and
legal structures
It can be said that there are various types of organisations operate and exists within a country.
In this regards, the purpose and types of businesses such as public, private, voluntary
business and legal structures is provided below:
Figure 1 Types of Businesses
Sole trade: This kind of business is operated by an individual who is the sole profit and loss
taker of the business. In this kind of business that is managed by only one person increases
liability. Sole trade business such as Elixir which provides customised software (ush, 2015).
The name of owner is John and it is a profit marketing organisation.
Partnership: In a partnership business, there are several individuals involved in managing
business operations. In this regards, the liability of partners may be unlimited or limited.
Partnership helps business to increase its market share, strengths and opportunities. The
Grapevine is a UK based partnership organisation operates in super store and has 15 members
with an objective of making profits.
Private limited company: The liability is limited for private company with private shares.
The main purpose of private organisations is to enhance profits by providing products and
services to consumers (Elkington, Burke and Hailes, 2017). Bestway is a PLC and has 30
members with objective of making profits. The firm performs baking, cement, pharmacy and
wholesale activities in guidance of excellent directors and owners.
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Public limited company: It can be defined as a business where the ownership or
membership is open to public. The purpose of a public limited company is to work for the
welfare of society and environment. In this regards, Asda is a public limited firm which is
profit oriented and issue its services to public as possible.
Voluntary business: It can be described as a group of individuals who are involved into an
agreement to attain a particular purpose. Such organisations are known for their socio-
economic improvement in terms of promoting culture, art, sports etc. of rural people.
Bloodbot is a non-profit firm with a purpose of managing blood for emergency services.
Government organisation: It is a company that has 51% paid-up share equity by the
government. Such organisations are governed by the government of UK. In this regards, NHS
is a government organisation operates in rendering public services to uplift the living
standard.
In addition, charitable organisation which is a non-profit business known as public charity;
the focus of such organisation is on nature like religious, educational and charitable
intentions. These organisations are not a part of statutory body or local authority (Gray,
Harymawan and Nowland, 2016). Further, cooperative organisations are formed by various
individuals with same mind to operate in financial tasks to earn profits. Hence, these are the
types of businesses operates with different purposes effectively.
P2, M1 Explaining the scope and size of organisations
The size, scope, classification, legal structure and other details regarding different types of
organisations with example are provided below:
Sole proprietorship: There are numerous scopes of Elixir. Quick decisions are always
fruitful for business as the entity is much flexible for the owner. It can also establish or
expand its operations through partnership. In this way the firm is able to add different experts
within operations. The capital amount of business is 1 million and revenue is 2.5 million
which shows that it is a small business with 20 employees. Stakeholders include customers,
suppliers and employees.
Partnership business: The Grapevine scopes are also numerous that it is able to add more
partners to enhance its market share and capital (Standing and Mattsson, 2018). It can also
include experts or skilled individuals to increase efficiency of ownership. Partners participate
in meetings to solve issues and problems regarding operations. There are 15 owners of The
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Grapevine with a capital amount of 20 million and revenue of 50 million. There are 40
employees working with business which shows that it is a medium size business and can
expand its operations. Stakeholders in partnership business are government, employees,
customers, investors and partners etc.
Private limited company: In terms of scope, there are some restrictions for a private limited
company such as Bestway Group. However, the same minded individuals are able to operate
business by engaging in operations to manage functions appropriately. Through skills, capital
and human resources, business is able to expand in different industries. There are 30 owners
of Bestway Group and has 3.4billion capital amount with revenue of 4billion. There are
33,600 employees working with business.
Public limited company: Asda as a public limited organisation has number of opportunities
to expand its operations by investing in new technologies, products and projects. In this
regards, finances can be availed through issuing shares to public. The management is
separated from owners here (Koester, 2016). Hence, managers are responsible for issues and
mismanagement. The operating income is 1 billion and 180,000 employees working with
Asda and it has 650 locations. Thus, the nature of business is large and key stakeholder is
public for business. Key stakeholders for Asda are government, customers, employees,
people, investors and shareholders.
Cooperative: The cooperative bank has also number of scopes to accomplish its goals. Many
employees work with bank as it can expand its operations within a short time period. The
capital amount is 1.57 billion and revenue of 512 million. The firm has almost 400 employees
to provide services to customers.
Thus, it can be said that the scope, size, operations, legal structure and stakeholders are
different for various types of businesses as they operate in different business sectors and
environment. In this regards, these all elements are discussed to understand the nature of
business in public, private and voluntary sector effectively.
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TASK 2
P3, M2 D1 Describing the relationship between business functions and how they are linked to
business structure and objectives
Asda is one of the fastest growing British supermarket retailers trading business. The
headquarter is located in West Yorkshire. The current CEO of business is Roger Burnley who
are managing 1, 85,000 employees. The firm operates in consumer goods sector and provide
grocery, financial, clothing, home, general merchandise and other related products and
services (Doppelt, 2017). There are 633 locations with operating income of 792 million. The
firm is expanding its operations with the help of quality products to satisfy needs of
customers. In this way, it is able to perform well in market to gain its competitive advantage
to become on top in UK retail market. In this regards, a wide range of product portfolio is
managed by Asda to provide as much possible services accessible for customers less than one
roof. The mission statement of Asda is to become best retailer in terms of value in Britain by
exceeding needs of consumers. The purpose is to provide understanding to stakeholders
regarding existence of business. The objectives are to investigate macro environmental
factors before making future strategies and to provide services at its best in terms of quality
and price. The firm has a hierarchical business structure that the decisions are taken by senior
or top management regarding business operations. The key stakeholders of Asda are
consumers, employees, suppliers, owners, trade unions and quality of products.
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Figure 2 Asda Organisational Structure
The organisational chart of Asda shows that the roles and responsibilities are divided as per
the requirement of business to people managing individual department. In this regards, the
functions of business are described below to understand how they interrelate to business
structure and objectives.
Human resource: It can be said that the role of human resources is to deliver efficiency in
managing business operations and employees (Shaw and Barry, 2015). Employees are major
elements of business functions and they have direct impact on business growth and
development. A happy employee helps in promoting business values by providing quality
services. HR strategy of Asda is built on the employee basis as they have part in success.
Asda run different training programs to ensure to achieve employee retention, succession and
satisfaction.
Distribution: This method is important that it involves process where the products and
services offered by Asda are provided to customers or end users. In this regards,
transportation and other storage services are used by business to deliver services. Breakdown
can affect consumer services within this process. In this regards, Asda works effectively with
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suppliers to manage the efficiency in distribution services. This helps in ensuring that the
goods are safe and ready to be delivered to consumers as per the requirement and availability.
The local store management is responsible for making decisions regarding distribution
process. Services must be effective that it has impact on business objectives.
Marketing: Marketing is essential that it helps in ensuring that the information regarding
business operations including products and services are delivered to customers to attract them
towards brand (Bini, Bellucci and Giunta, 2018). The firm is managing promotional and
marketing activities on duel aspects of right price and quality to accomplish satisfaction of
customers. Hence, the firm is meeting with customer demands which changes on regular
basis.
Customer services: Customer services are a major function of Asda as it helps in adding
values to organisation success by purchasing services. In this regards, effective relationship
with customers is required to become competitive and achieve growth in market share. Asda
staff for customer care has increases range of products in stores.
Hence, it can be said that these are some major business functions of Asda that has also
impact on business structure and objectives if not managed well. There are both positive and
negative aspects of these factors associated with structure and objectives. The major
advantage of these functions is that it helps in driving business success by providing
satisfaction to customers in terms of quality, price and services (Smith and Rönnegard, 2016).
It helps in achieving objectives of Asda. However, it can also affect the customer base and
image of business if not managed well. Decrease in efficiency of these functions can produce
certain challenges and changes for business. Thus, it can be said that business functions
interrelate with structure and objectives of organisation.
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TASK 3
P4, M3 Positive and negative impact of macro environmental factors upon organisation
operations
There are some external environmental factors that has impact on business operations and
decision making of manages which are described below in the context of Asda and Bestway
Group. This will help in analysing the positive and negative impact of these factors on
business (Pestle Analysis, 2018). For this, PESTLE analysis tool is used.
Figure 3PESTEL ANALYSIS
Political environment: It can be said that there is a great impact of EU, national and
international regulations on both Asda and Bestway in terms of tax rates, employment,
customer rights and legislations. The decision making is also affected by the political
instability and war. Hence, it is important for both firms to manage the political environment
by monitoring aspects associated with it consistently (Bendell, 2017). However, the UK
political environment is stable and also beneficial for both organisations.
Economic environment: It is very important for both organisations to consider economic
elements that have impact on business operations and decision making such as credit cost,
pay level, pressure by competitors, supply and demand, prices etc. It can be said that these
factors have impact on pricing strategy of business. Hence, these should be managed to
operate business as per the economic requirement and condition.
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Social environment: The firms must have comprehensive understanding of the social
changes and factors such as population, healthy lifestyle, social trends, preferences and tastes
of people and celebrity following in order to introduce new product in the marketplace. It is
also important for both firms to develop their segmentation strategies to increase growth and
development. However, social factors have a major impact on business operations in terms of
social changes.
Technological environment: As the use of technology is increasing in this modern business
world. It is providing several benefits to businesses in terms of improving their operations
and quality of services. Asda must implement technology such as mobile apps, click and
collect services, latest equipment etc. to make best use of digital technology. However,
technology is also decreasing employment and human resources needs that have impact on
business structure of both.
Environmental environment: It is very important for both Asda and Bestway Group to
operate in an eco-friendly environment manner to provide environmental benefits (Peterson,
Jaret and Schenck, 2016). In this regards, it is important for both to consider pollution, green
economy, wastes, organic goods, carbon footprints etc. to operate in an eco-friendly manner.
This helps in demonstrating image as environment friendly. However, there is a great impact
of environment on business that it creates certain challenges for business in terms of
operational changes and price fluctuations.
Legal environment: In order to operate smoothly without any issues, it is important for both
firms to operate under the legal environment by following rules, legislations and regulations
formulated by government. For instance, Asda and Bestway group cannot pay less to
employees as per the minimum wages act in UK. In addition, unfair dismissal is also against
the employment laws that can create a major issue for business (Carroll, 2016). Hence, both
firms need to consider regulations formulated by the UK government to operate smoothly and
effectively.
Thus, it can be said that there are both good and bad impact of macro environmental factors
on businesses such as Asda and Bestway group. The impact can be analysed through
management of operations by both firms.
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TASK 4
P5, M4 Conducting external and internal analysis of organisation to determine the strengths
and weaknesses
SWOT analysis is an effective tool that helps in analysing the business strengths, weaknesses,
threats and opportunities. In this way, business is able to make changes in strategies to
increase performance level. It can be said that these have also interrelationship with the
macro factors as they both are considered while making decisions regarding business
structure and operations.
Strengths: It can be said that there is a wide
range of products and services offerings for
Asda which is the major strength of business
including financial services. Asda is managing
customer relationship via social media and
through other ways such as feedbacks and
conducts (Kasemsap, 2017). The firm is also
managing the corporate social responsibility
very well. Acquisitions have helped business in
strengthening its position in market.
Weaknesses: There are also some weaknesses
such as it has limited presence globally as
compared to other key competitors. In addition,
in many nations the government has restricted
the prices of services due to the fear of
increasing competition for local vendors. It has
a major impact on business pricing strategy.
Opportunities: There are number of areas
available for business in order to expand its
operations such as opticians, photo department
and pharmacies etc. The firm can also establish
its operation in emerging markets like India and
China. In this regards, acquisition will help
Asda in growing further effectively.
Threats: The threats in Asda such as price war
which is increasing the competition level in
retail chains. The pressure of maintaining low
prices for products and services is also can
margins for business. The central government
also make different policies that required
changes in business policies and strategies to
manage their operations.
Figure 4 SWOT ANALYSIS OF ASDA
Competitors: There are some key competitors of Asda in the market such as Tesco,
Morrison’s, Aldi, Walmart, Waitrose, Amazon, Boots etc. which are taking most of the retail
market share that has impact on business operations and productivity.
Strengths: The major strength of Bestway is
that it has several sectors to manage its
operations such as Banking, Wholesale, Cement
Weaknesses: The business is managing
operations in several sectors which is also a
weakness in terms of losing efficiency and
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