Business and the Business Environment: A Comprehensive Report

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Business and the Business Environment

Table of Contents
Introduction –................................................................................................................... 3
Section 1 – Essay (LO1 & LO2) –....................................................................................4
Section 2 - ‘The UK Supermarket Sector’ (LO3 & LO4).................................................7
Conclusion -................................................................................................................... 18
References -...................................................................................................................19

Introduction –
Business organization is the complete sector that includes business and organization in
terms of their size, purpose and goals. Now a day’s people have different choice in the
market for the completion of their needs. In industry there are many retailers that are
working on same products and services and using different strategies to attract
customers on their shop. The major goal of these organizations is to make their product
valuable and recognizable to customers and to set their presence in global market.
Many organizations work only for-profit agenda, they don’t keep the consumer in center
and apply schemes to get profit from their needs. Where some organization works for
public to serve their needs at very acceptable cost.

Section 1 – Essay (LO1 & LO2) –
Industry has every types of organizations that either work for public satisfaction or their
personal profit. In consideration of this the research highlights the difference of non-
profit organization and NGO’s that works for any purpose rather than making profit. Also
describe their scope and purpose as a part of industry.
An NGO’s referred as non-governmental organization that is developed by a legal
person but also their fund is maintained by government. These kind of organization
works for public or betterment of society. These organizations can be formed on large
scale or on low scale but their area of operations is very wide. The main purpose of
these organizations is to bring awareness in the society as they work for human rights,
women empowerment and wellness of human being (Oraman, et. al., 2018).
Where a Non-profit Organization is a legal entity that is not assessed by government.
This kind of organization mainly handled by the professionals or the committee
members. The members also raised funds for the organization and this fund is used to
fulfill the objectives of organization. Many kinds of privileges are defined for their
benefits. These are set up to provide services for people at very low cost without getting
any profit and margin. Mainly these organization are well known for their functions to
promote art, research and other area of development (Oraman, et. al., 2018).
1. If there are NGO’s and NPO’s to serve consumer needs then there are also
some organizations whose main purpose is to generate profit from customer
requirements. A well-known organization Zara is completed related with this.
Zara offers their products as per people need on a high cost. As their brand has
well known identity and trustable for their services, organization offers their item
to customers and make profit from them. And these profitable organization
include small markets to maintain their position in the market. In addition to this
America’s largest private companies like Dell, Cargill are very well developed and
high stock exchanger merge small businesses like mom- and – pop restaurant to
finish the competition (Almedia & Santos, 2018).

The business sector provides a wide range of product services and their manufacturing
of over 6000 products. The micro, small and medium enterprises development are
categorized in two sections. Based on their capital gains and production these criteria
have been decided. Company growth depends on their market share, profit and
sustainability.
Companies whose capital investment lies under 2.5 million are defined as Micro
organizations. And when this investment exceeded more than 2.5 then it considered as
small organization.
Many companies have turnover more than 50 million are considered as medium sector.
This criterion varies with production and equipment investment.
Business needs to maintain their operations and strategies to be a part of environmental
sustainability. This impact on financial metrics of organization. This factor depends on
company cost as decrease the environmental footprint affect the cost and production of
business. These factors helps organizations to maintain global position of marketers
and to promote their brand in international level.
In industries there are various companies that import and export goods to other
countries. These Organizations are separated in different modules according to their
investment and utilization of products.
International marketers don’t invest their capital on global scale but they supply and
import their goods in other countries. They provide customization of products and
services as per market needs to manage their profit.
Where multinational companies invest their resources and capitals on global stage to
represent their business. They have located on different countries and server their
consumers. But these locations work on their own terms and own identity.
Global business has international reach to other countries as they provide services on
international scale according to the culture and need of another country. They set their
goals towards global organization and facilitate effective brand identity. Generally, their

products and services are managed by head branch and supply goods through same
brand equity to all over the world.
In order of this transnational business has a complex structure. They invest their capital
in foreign operations and controlled substantial facilities. The advantage of these kind of
organization is that them have a responsive impact on local marketers and provide them
best facilities in respect of cost and efficiency (Grundy, 2017).
Moreover, organizations involve responsibility to achieve their targets through
economical and effective strategies. Their initial mission is to set their business in global
market for which the organization established. It involves information’s of customer
desire and type of product they supply, value of their item in respect of equity, cost and
quality (Oraman, et. al., 2018).
To set a goal for an organization is very important as it helps them to manage their
services and helps to increase their profitability that defines the success of any business
market. There is a tuff competition in the market and organizations needs to manage
their resources to be in that competition. And in that case a set mission towards their
objectives help organization management to focus on their efforts in a particular
direction. If we take example of any big brand name like ZARA, deals in women clothing
in a direction to provide their user satisfaction. Also, they have their predefined targets
to achieve success. These target motivate their members to work efficiently and smartly
as per customer need.

Section 2 - ‘The UK Supermarket Sector’ (LO3 & LO4)
a) Applying PESTEL model to the UK Supermarket sector
PESTEL analysis stands for political, economic, social, technological,
environmental and legal factors which analyze the external or macro
environment that puts a great effect on the UK Supermarket Industry. (Maish,
et. al., 2019). These are as follows:-
2. Political- Political factors affect the supermarket industry by providing actual
political issues which impact on the entire economy. The chances of Scotland
becomes independent political issue. Issues needed brings high prices for
consumers like supply chain, added administration costs, pension laws, etc.
Prices has increased and loss occur in profits for supermarkets because of
independence of Scotland (Grundy, 2017).
3. Economic- economic factors that affect in 2013 there would be inflation in food
prices. Large shopping done by customers out of town stores to save fuel price

because fuel prices have been increased. High value of real estate held by UK
supermarket retailers has been considered as another factor by UK supermarket.
4. Social – Social factors as consumer buying habits, consumer behavior, etc.
impacts the UK supermarket sector. Tradition helps the customers to decide from
where they do their shopping. Another factor like loyalty of customers shows the
buying habits or behavior of the customers. CSR (Corporate Social
Responsibility) also plays an important role to improve the financial performance
of the industry. Every company must follow the social laws, rules/regulations to
safeguard the interest of the society and their health and make products
according to the society needs or wants which should not provide or make
harmful, dangerous products which harm the users of the product (Oraman, et.
al., 2018).
5. Technological- Technological factors as a need of innovation in supermarket
industry. Adopting advanced technology to focus on current market demands, the
industry provides good customer service to the customers to satisfy their
demands/wants. Social media also plays an important role in the succession of
the UK supermarket industry. As Facebook, Twitter, etc. provides free advertising
done by making their own accounts of Twitter and pages of Facebook as an
opportunity to supermarkets. To meet the advanced technological changes the
businesses used advanced and or latest technology to meet its customer’s
demand.
6. Environmental – Environmental factors like weather conditions creates problem
in the harvest and growth of the crops like vegetables and fruits which destroy
them. The foods become expensive for customers because of issues created in
supply chain which influences prices in the supermarket. Supply and demand
influence the seasonal foods prices of the supermarket industry. To deliver online
orders of foods and provide services to the customers by the supermarket

industry due to weather it creates problem in online delivering and food to the
customers.
7. Legal- The UK Supermarket industry needs to follow the Government rules and
regulations and or laws. Anticompetitive agreements will not allowed to follow by
the supermarket industry. Competition law is a legal factor which provide
guidelines that UK Supermarket business need to act on. (Almedia & Santos,
2018).
Planning for Restructuring Businesses by UK Supermarkets Chains
UK super market chains plans to restructure their businesses to become more
competitive in the world. The UK super market chains not only want to become
competitive but also want to meet the changes that occurs in the business
environment by providing direct respond to the changes. Marks and Spencer,
Tesco, Sainsbury’s and Asda make and announced their plans to restructure
their businesses in order to become competitive in the world and also want to
meet the changes in the business environment. These are stated below –
 Marks & Spencer make plans and brings large sized supermarket stores
to enhance the foods range and provides appeal to family shoppers.
Marks and Spencer persuade families to shop from their grocery stores.
Marks and Spencer supermarket offers online products like cakes,
lunches, food with order, also party foods online. Customers can also
order food from online. Marks and Spencer puts five hundred jobs at risk
as the high street stalwart takes ruthless approach to its struggling stores.
Marks and Spencer also made unveiled plans to close up to 14 shops.
 Tesco simplified its business which will result in seventeen hundred job
cuts and announced this plan to its business employees and everybody
involved in the company.

 Sainsbury industry provides online grocery products and delivery
services to its customers. Sainsbury operates as a supermarket.
Sainsbury Company offers home accessories, groceries, lightning,
furniture, and clothing, to the customers of the United Kingdom. Sainsbury
is a retail industry of UK. It has food and drug stores. Sainsbury’s put
thousands of jobs or many jobs at risk in the process and announced
plans to shake up its management.
 Asda provide new and innovative grocery store products which offers to
its customers like summer products, fresh foods and bakery products,
chilled food, food cupboard, frozen food, drinks, health and beauty,
laundry and household, pets, baby/toddler/kids, home and entertainment
products to make its customers welcomed, happy and satisfied. Asda
provides very good quality products and or services to its customers. Asda
has made twenty eight redundant jobs further at its head office. This will
occur redundancies in September 2017 where Asda axed has almost
three hundred jobs, where it has two thousand five hundred strong Leeds
head office as part of a turnaround plan. These turn around plans puts
major cost cutting initiatives.
UK Super market Share
The Tesco industry has 29%supermarket share in UK. Where Asda industry has 17%
super market share in the United Kingdom. Sainsbury’s industry has 16% super market
share in the market. It means Tesco has more share in the super market as 29% from
Asda and Sainsbury. And Sainsbury’s has very less market share as 16% in
comparison to Tesco and Asda in the super market of the UK. As shown in the figure
1.1 below -

Figure-1.1 UK Market Share

b) SWOT Analysis of TESCO
SWOT analysis of UK retail industry Tesco, where SWOT stands for strengths,
weakness, opportunities and threats. Strengths and weakness included in
internal environment and opportunities and threats included in external
environment. Companies mainly increase the strengths and opportunities and
focused on minimizing the weaknesses and threats in order to meet the goals
and or objectives of the company. (Sarsby, 2016). These are as follows:-
1. Strengths - Strengths are helpful and positive to the Tesco UK retail sector
industry. Strengths are like advantages of the company. It includes –
 Leading market share (13%share of UK retail market)