Analyzing the Business Environment for Walmart's Operations

This report provides a comprehensive analysis of Walmart's business environment, examining various organizational types including public, private, and voluntary sectors, and their legal structures. It delves into the size and scope of different organizations, focusing on the interrelationship between organizational functions and objectives within Walmart. The report further explores the positive and negative impacts of the macro environment on Walmart's business operations, supported by specific examples. It also includes an internal and external analysis of the firm, identifying its strengths and weaknesses and the interrelation of these with macro environment elements. Key departments such as HR, research and development, finance, and marketing are examined in the context of their contributions to Walmart's success. The analysis considers political, economic, social, technological, and legal factors influencing the company's performance.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Types and purpose of organizations..................................................................................1
P2 Size and scope of a range of different type of organization..............................................1
TASK 2............................................................................................................................................1
P3.Interrelationship between organisation function and objectives.......................................1
TASK 3............................................................................................................................................1
P4 Positive and negative impacts the macro environment has upon business operations,
supported by specific examples..............................................................................................1
TASK 4............................................................................................................................................2
P5 External and internal analysis of firm to identify its strengths and weakness..................2
P6 Interrelation of strengths and weakness with macro environment elements.....................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business environment involves both internal and external factors that impact operation and
activities of organisation. There are different types of organisation working in different sectors
like public, private and voluntary sectors. These organisations have to manage their internal as
well as external environment in order to retain their position in competitive market. Walmart is a
multinational retail company that operates all round the world with thousands of stores. It is
headquartered in Bentonville, United Kingdom (Chetwood and et. Al, 2014). It is a private
limited company. This assignment will focus on different types, purpose and size and scope of
organisation. Relationships between different organizational context and their link with
organizational objectives. In addition to this, positive and negative impacts of macro
environment on business operations and internal and external analysis are mentioned in this
report.
TASK 1
P1 Types and purpose of organizations
There are many organisations working in different sectors like public, private and voluntary
sector. Different organisations have their vision and missions to accomplish in set time period.
All work to achieve something great and serve customers with best serves they can render to
them. Below are different sectors with their legal structures:
Public sector: This sector is mainly governed by local, state and national government of
the country. They are responsible for every activities and operations and ensure effective
working by government officials. Their aim is to serve people of the country in every manner.
This type of sector mainly focuses on welfare and development of society. This enterprise
includes different entity such as education sectors, electricity boards and health care organisation
(Crane and Matten, 2016). Example: NHS is a public organisation and is associated with health
and social care sector. It offers different types of health related services to the customers and
patients at minimal costs. It is situated in England, United Kingdom. They also offer free
facilities at the time of emergency case related to treatment of infection and sickness.
Purpose: Their main purpose is to provide and offer different helath relted facilities to
customers and give healthy lives to as many people as possible.
Legal structure: The legal structure of public sector ig given below:
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 Central government: It plays important role and its duty is to regulate transaction of
entire nation. Main role is collection of printing and tax of denomination.
 State government: It monitors all activities and function of origination.
 Local government: It manages activities of local company and work in particular region
or town.
Private sector: Organisation that are owned and managed by an individual or group of
people. They also include start up started by entrepreneurs. They establish their venture with the
aim of profit making and make economic condition of country (Gharajedaghi, 2011). Example of
private company is Walmart. They are one of the leading retail store and provides affordable
products to their customers.
Purpose: Their purpose is to provide different ranges of product at one stop and at affordable
prices.
Legal structure: The legal structure of private sector is given below:
 Sole Trader: Private company which is owned by a single person. In that case, he has to
take all risk and eligible for every profits of the company.
 Partnership: Sometimes, group of people work together in partnership and invested in
company equally and both are eligible for profits equally.
Voluntary sector: This sector includes those firms which work for welfare of the society
and provides services to needy and poor people. They work by sponsors and donation given by
interested parties and encourage needy people to join their organisation. Example: Oxfam is one
such sector that serves people and provides necessary help to needy people.
Purpose: They provide appropriate service and help to needy people and also provide
health care services.
Legal structure: They formulate their own legal policies and follow country’s regulations.
P2 Size and scope of a range of different type of organization
Different company operating in United Kingdom have different sizes of company and is
given below:
Basis Small Scale Medium Scale Large Scale
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Purpose There are many small
scale industries that
help UK to build
strong economic
condition of the
country and provide
great opportunities to
unemployed
individuals. They
manufacture goods
and services which
cater the various
needs of people.
Price of good is
normal and
affordable so that
people can buy it
easily.
There are medium
scales companies
operating in UK and
are focused towards
making profits and
also providing
various type of
products and services
to customers. They
work towards gaining
market share and to
hold a position in
competitive market.
clients as well
This type of
organisation operates
at large scale and are
main source of
income and revenue
to the country. Hey
provide large number
of job opportunities
for eligible
candidates of
country. They
compete with other
large scale industries
and focused towards
gaining high market
share of market.
They work towards
maintaining their
position in global
market.
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Size These companies
have usually 20 to 50
workers in their
premises.
Usually, these
associations have
more than 50 but less
than 250 number of
workers in
workplace.
Industries working
under large scale
have unlimited
number of
employees.
Scope Small scale industries
are great source of
income and provide
jobs for local people.
They help in
developing economy
of nation. Therefore,
government supports
these organisations in
launching their
business.
These companies
also play an
important role in
increasing GDP of
UK in an efficient
way.
Contribution of
companies in this
sector is great in
overall GDP of
country and is great
source of income to
the country.
TASK 2
P3.Interrelationship between organisation function and objectives
Walmart is one of the leading retail supermarkets in the world is leader of sustainability.
With strong communication and cooperation, company is able to perform all their activities with
utmost perfections (Gilboy, 2016). They started small in the beginning and today, they are at the
top. This has become possible due to continuous hard work by employees and other staff
members of Walmart. Different departments of Walmart have played great role in the success of
the company. Following are some departments:
Human resource department: It is very important department of a company as it plays
major roles like, recruiting, selecting, managing, coordinating, etc. Their major role is to attract
and recruit suitable candidates for the job position available in the company. HR managers first
identifies the vacant jobs and they list down all characteristics which will be required by the
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candidates to perform that job and then hire candidates which have desired skills. HR managers
of Walmart are highly efficient to identify talents in the candidate and select for their jobs.
Another important role played by HR department is that, they provide necessary resources and
information for carrying out the work smoothly. They identify the need of raw material and
supply to necessary department as soon as possible.
Research and development department: This is also a crucial department of Walmart as it
carries out the necessary research and survey which are important for company. Research
provided appropriate facts and information to suitable departments and they further formulate
strategies according to the research (Kian Chong, Shafaghi and Leing Tan, 2011). Main aim of
Walmart is to satisfy each and every need of customers, so they develop products which can
satisfy their need.
Finance department: It provides necessary funds and financial support to the company.
Funds are really important to carry put several activities and implement innovation procedures
within organisation. It helps company to expand their business in different markets and increases
profits for company.
Marketing department: This department is responsible for marketing and promoting
products and services of company to target customers and market. Marketing mangers formulate
strategies that can facilitate their distribution to customers on time. Walmart have strong
distribution channel and supply chain management, which help them to satisfy their customers in
more efficient manner. Managers have the responsibility to promote their products by using
different promoting tools like advertisements, television, social media, search engines, radios,
etc. This help in attracting large number of customers towards their products and this encourage
their sales.
Above were some of the departments of Walmart which have different functions and roles to
perform (Kaufmann, Kraay and Mastruzzi, 2011). For smooth and effective working, it is
necessary to have strong communication and interaction between the departments as this ensures
success for the company. With proper coordination, company can achieve all its goals and
objectives on time. This also ensures more profits and revenue coming to the company. With
great customer service, company can build good relations with their customers and this will lead
to building up of loyal consumers.
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TASK 3
P4 Positive and negative impacts the macro environment has upon business operations,
supported by specific examples
Walmart is one of the famous company and they are having their operations in different
countries all around the globe. There are different factors analysed which are affecting the
performances of business in both positive and negative manner. On the other hand there are
changes in the external business elements which are also affecting the operations of firms in both
negative and positive aspects.
Political factors: The government have made plans and policies which are having direct
impact on the overall business operations (Li and et. al., 2011). Thus is the most vital factor for
Walmart in order to follow all plans at work place in order to obtain effective results for their
business operations. If the firms does not achieve success in maintaining it results in creating
issues while exploring the business operations.
Economical factors: This factor consist of different element such as interest rates,
inflation and other factors which are existing in the economy and they are directly affecting
business performances. In this positive aspect the economic condition are beneficial in order
maximise the profitability of business at market areas.
Social factors: This factor consist of taste and preferences of customers, culture, attitude
and age group which are having influence on the purchase decisions by which firms will enhance
their overall sales and profitability ratios (López-Gamero, Molina-Azorín and Claver-Cortés,
2011). In order to gain effective results firms have to focus towards all the major elements which
they are offering to their potential customers. This results in attaining satisfaction level of
customer.
Technological factors: In order to earn high competitive advantage, it is essential for for
Walmart to modify its existing technologies and adopts the new one. It also aid in improving its
production and operational activities as well as enhancing productivity at market place also. But
in terms of negative impact, this function requires much finance which increase cost of
manufacturing also.
Legal factors: It is necessary for Walmart to collaborate its business with all ethics and
legal factors which would help in improving its brand image as well as conducting operational
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activities in a more profitable way. In addition to this, it is also essential for this firm to follow
all rules like employment legislation at the time of recruitment and selection. But if it fails to do
this, then it will negatively impact on brand image of business also.
Environmental factors: Due to global environment, this firm has to stop usage of
polythene bags in packaging as well as reduce wastage also (Business environment. 2018). It
would help in giving support to government in keeping environment safe and building an
effective brand image of business. While in terms of negative impact, concerning more about
safety of environment increases cost of manufacture as well.
TASK 4
P5 External and internal analysis of firm to identify its strengths and weakness
In order to gain competitive advantage, Walmart requires to analyse external and internal
strengths and weaknesses of business as well. It would help in identifying in which field they are
good and in which area need an improvement (Zeng, Li and Duan, 2012). Since this firm is
dealing in retail sector at UK so it has large number of competitors present in same marketplace
having similar type of products. Therefore, it needs to evaluate current position of business as
well as opportunities through which achievement of targeted goals and objectives can be gained.
For this manner, managers of this enterprise use SWOT techniques which entails threats also that
act as barriers in success of business.
Strength Weaknesses
 Walmart is one of a leading retail
company of UK which serves in 28
countries of the world. It has near about
12,000 stores in various locations
which aid in gaining more than 500
billion pound in a year. The main
strength of this firm is its unmatched
scale of operations along with largest
retailer in terms of employment i.e.
having 2.3 million workers (Wack,
2017).
 Presence of big retailers like M&S,
H&M, ALDI and more, sales
performance of this firm getting much
down (Yu and Ramanathan, 2013).
 It has observed that this firm has high
labour turnover due to lack of
motivation and encouragement. In
addition to this, it has also evaluated it
doesn’t concern more on business
ethics while formulating strategies and
policies. It has faced various lawsuits
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 This company utilise its resources in a
more profitable manner which includes
distribution facilities, capable and
skilled employees, information systems
and more.
 It serves products in a unique and
effective ways which help in building
effective relationship with customers as
well as retain them for long period of
time. Along with this, having large size
of business, support government in
improving economy of country.
because of not following employment
legislation. Employees are treated
unequally as well as have faced several
types of discrimination like unequal
wages, overtime without extra pay, low
incentives and so on (Zsambok and
Klein, 2014).
 Poor quality of products, usage of old
techniques, no impressive discounts,
lack of social responsibilities and
business ethics are some major point
that reflects weaknesses of Walmart.
Opportunities Threats
 Entering into new market area or
expanding business in other nations are
giving an opportunity to Walmart to
grab more profitable share and gain
profitability in business (Meiners,
Ringleb and Edwards, 2014).
 Developing strategies and policies as
well as concerning more on introducing
ethical business aid this firm in
reducing its weaknesses in a proper
manner.
 Since people concerns more on their
health, therefore, this firm requires to
sale healthy and organic eatable
products. It would help in gaining
attention and retention of customers in
a more profitable way.
 Due to intense competition, economic
rate of this company becomes much
low which snatches its strong position
from marketplace. Companies like
Amazon, Tesco, ALDI and other
retailers come over its weaknesses and
grabs more attention of customers at
marketplace.
 Recession period of economy,
increased rate of raw materials and
more impacts on cost of manufacturing.
It would rises in commodities price
rates through which retention of
customers becomes impossible.
 Increasing social threats, necessities of
following legal and political rights,
concern more on environmental laws
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are some factors that interrupt business
of Walmart in large manner.
P6 Interrelation of strengths and weakness with macro environment elements
In order to analyse impact of macro factors on business, it is necessary for managers of
Walmart Company to conduct PEST. It would help in evaluating interrelation of strengths and
weaknesses with factors of macro environment (Sekaran and Bougie 2016). This would help in
coping up over weaknesses as well as attaining competitive advantage in a more profitable and
effective manner. Therefore, for this process, management of Walmart has made following
analysis:-
 Political factors: In context of present report, it is fundamental that administration of
Walmart organization influence elements of firm based on administrative assortments of
United Kingdom under which to organization work its business. Administration of United
Kingdom create successful enactments identified with political strength and additionally
tax assessment. Settle firm give its administrations in different countries so needs to plan
powerful systems and in addition arrangements under which firm actualize its all
exercises. It is useful in expanded deals alongside benefit. In this, firm built up its own
group to roll out improvements in existing frameworks based on successful control and
guidelines of government (Saleem, 2017) (Tayur, Ganeshan and Magazine, 2012). It
gives advantage to firm to expand picture of firm at commercial center. Walmart firm
work its business in various nations so for this there is a requirement for administration to
get ready compelling strategies. They ought to have better information with respect to all
legations.
 Economic factors: Inflation, trade and loan cost are the diverse parts which influence on
exercises and tasks of business. It is fundamental that firm ought to have legitimate assets
which are accessible for lead all elements of business in appropriate way (Vaiman,
Sigurjonsson and Davidsson, 2011). Settle organization work its business in various
nations with a specific end goal to sort out and deal with all exercises and direct business
based on monetary state of nation. An Administration of the Walmart organization need
to decrease exercises of business in various nations based on circumstances. Economic
situation of Asian market Due to various intrigue and swapping scale of money and
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additionally financial state of countries of those nations in which Walmart has worked its
business make much effect on its gainfulness.
 Social factors: This kind of factor has forced companies to concern more on welfare and
development of society. In addition to this, introducing ethical business, providing
benefits and compensation to employees help in improving image of firm in a proper
manner (Türetken and et. al., 2011). While in terms of negative impact, if they fail to do
the same then whole market image will get destroy.
 Technological factors: To manufacture products as per choice of customers, it is
necessary for Walmart to create changes in business and techniques in regular manner. It
requires to adopt latest technologies for providing effective customer service. In addition
this, for gaining attention of consumers and their retention too, it is also essential for this
enterprise to launch business on online services. But main negative point of this factor
that it requires an ample amount of finance for creating modification and innovation in
services.
CONCLUSION
From this mentioned report, it has concluded that business environment constitutes
various factors which create a great impact on operational activities, strategies and policies of
company in both positive and negative manner. Analysing importance and role of these elements
help in raising of performance level of business as well as in making necessary changes in
organisational system. This assignment has shown that all departments and their functions are
interrelated with each other and contributed more efforts in achievement of business success in
an appropriate manner. In addition to this, present theory has also reflected different types of
organisations in UK with legal and business structures as well as role in increasing economy of
country as well.
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