Analysis of Business Structures, Company Types, and External Factors

This report provides a comprehensive analysis of various company types, including micro, small, medium, and large enterprises, and their characteristics. It delves into different business structures, such as sole traders, partnerships, limited partnerships, and public limited liability companies, highlighting their advantages and limitations. Furthermore, the report examines different business structures like functional and market-based divisional structures, and how they impact productivity. The report also applies a PESTEL analysis to assess external factors affecting businesses, using Sainsbury as a case study, covering political, economic, social, technological, environmental, and legal factors. The analysis emphasizes the importance of understanding both internal structures and external influences for effective business operations and strategic decision-making.

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Table of Contents
MAIN BODY ......................................................................................................................................3
Section 1...............................................................................................................................................3
Critically explain the several types of companies in market ..........................................................3
Section 2 ..............................................................................................................................................4
Analyse from sole traders to cooperatives & limited liability partnerships ...................................4
Section 3...............................................................................................................................................6
Access different business structures & how external factors affect businesses...............................6
CONCLUSION .................................................................................................................................10

INTRODUCTION
Market is wider and broader and it is important to focus on business situation so that goals
are accomplished (Abbasi, 2017).Main aim of this report is to examine the different types of
marketing activities within business. Sainsbury, a largest supermarket chain firm headquartered in
United Kingdom. It is located at global scale and has many competitors like Tesco, Amazon,
Walmart etc. This report consists of several types of companies, various types of organisation form,
types of business structure and factors impacting on operations.
MAIN BODY
Section 1
Critically explain the several types of companies in market
In market, there are various types of companies and which run their business activities in
proper manner. It is essential for business activities to focus on the different forms of companies
which are further discussed below-
Micro enterprise
These are those type of enterprise in which they have a 10 or less than 10 employees within
enterprise. Main aim of such type of entity is to survive and be stable in market instead of earning
profit. The survival and time interval of micro entity is limited and they pays attention on accessing
to limited resources.
Characteristics
 The micro entity aims at increasing survival period of business.
 This enterprise has minimum capital for business and operations.
 Also, risk involved with such businesses is low.
Small enterprises
It refers to type of organisation in which turnover has not more than £6.5 million. Also,
small entity does not have employee more than 250 employee. Small entity focuses on increasing of
profit revenue in market. In United Kingdom, small entities contribute at larger scale within
economy of a country (Ashraf, 2019).
Characteristics
 Small entities turnover is less than €50 million and a balance sheet of €43 million.
 The employee size of employee in small company is 50 employees.
 The cost involved and amount of investment is less within small firm.
Medium enterprise

In this, it refers to kind of entity in which they aims at focuses on accessing to new business
opportunities by providing new or modifying products. Medium entities focuses on accessing to
more profits at higher level. The balance sheet of small companies less than €43 million.
Characteristics
 The medium companies has enough resources to execute their business activities in proper
manner.
 Such type of entities have appropriate knowledge of market situation on basis of which they
are able to access the competitive benefits easily.
 Another characteristic of this firm is that they fulfil the needs and requirements of both
clients as well as customers at appropriate level (Bekmansurov, 2019).
Large firm
Large entities are those who have 250 or more employees and also the amount of
investment is around 1.5 billion Euros and have balance sheet of more than 2 billion Euros. In U.K,
there are wide ranges of large organisation such as Sainsbury, Morisons, Tesco that operates at wide
level. Main purpose of this enterprise is to enhance the profit scale of a firm.
Characteristics
 Large organisation have wide number of employees who are able to complete the work on
given time period.
 Such large firm operates globally and execute their functions and operations accordingly.
 The risk associated with these organisation is large due to involvement of number of people.
Section 2
Analyse from sole traders to cooperatives & limited liability partnerships
There are different type of organisation within business that are needed to be understood
by entrepreneur on basis of which it is easy to access to organisation in easy way. So, various type
of form of organisation is discussed as follows-
Sole traders- These are those who execute the business activities on their own and at small
scale. Such sole traders are self responsible for every functions and operations as well as risk. For
example- there are various types of sole traders likes cafe's, saloon, restaurant etc. Also, risk
associated with such businesses is low (Donner, 2020).
Benefits
 Main benefit of this form of business is that decision making is being at independent level.
 These types of entrepreneurs need not have to share their profit and revenue with others.

Limitations
 Sole traders has to face the risk by themselves only and it took time to implement strategies
for providing solution to risks.
Partnership
It refers to kind of business agreement in which two or more than two organisations aims at
executing business activities to achieve common desired goals. Partnership is to be viewed as most
appropriate form of way of doing business.
Advantages
 Advantage of this agreement is that it helps in carrying out of functions and operations in
proper manner (Fosher, 2018).
 Main benefit of this partnership is that everything is being shared including risk.
Disadvantages
 Drawback is that decision is to be undertaken with concern of other party which is time
consuming process.
Limited partnership-
It is defined as kind of arrangement between two or more than two firm in which one
company is being liable up to amount of their investment.
Advantages
 Main benefit of this form of business is that chances of business expansion is more and also
the profit ratio is high (Hongcheng, 2020).
Limitation
 Drawback of this partnership is that liability for partnership debt is limited to amount of
money that individual contribute to partnership.
Public limited liability & Cooperative
It refers to type of a public limited liability company in which it offers shares are traded
with public and has limited liability. The stock of PLL can be traded and purchased by any
individual.
Advantages
 Benefit of this partnership is that raising of capital is easy which can be done through raising
of public issues of shares.
 Another advantage is that growth and expansion of business is more easy.
Limitations

 Limitation of this partnership is that the durability and time interval of shareholder is limited
as it depends on profit earned by shareholders.
Thus, from above discussed matter it is examined that it is crucial to focus on such several
kind of businesses so that it is easy for entrepreneurs to access to goals and execute the activities in
appropriate way. So, various type of business such as sole traders, limited partnership, partnership
etc. are discussed in appropriate manner.
Section 3
Access different business structures & how external factors affect businesses
Business structure refers to way entity worked and decisions are undertaken within
workplace. It is essential to be aware about the business structures so that appropriate type of
decisions are carried out. There are various types of business structure which are described as
follows-
Functional organisational structure-
It is type of structure in which work is being divided into different form of department such
as marketing, sales, human resource etc. Main benefit of this structure is that it is beneficial for firm
that operates at larger scale as it is easy to carry out the work activities in appropriate manner.
Furthermore, it is seen that risks are eliminated when this organizational structure is adopted
(Joshua, 2020).
Impact on productivity
This organisational structure impacts on productivity as because when functions are divided
into different basis it is easy for organisation to access the positive output in easy way. Moreover,
new ways of working is also adopted when functional organisational structure is carried out.
Market based divisional structure
It is also important structure which is to be considered as because in this division of firm is
done on basis of markets, industries, customer types etc. Main limitation of this structure is that it
helps in accessing to output in effective manner. Benefit of this structure is that it assist in analysing
of market situations in appropriate way (Kraus, 2019).
Impact on productivity
This form of structure also impacts on market as because it leads to individual is able to
focus on their roles in easy way. It is crucial to focus on market based structure so that decisions are
undertaken in appropriate manner.

External factors affecting business
In market, external factors are those which occurs externally and also has impact on
business operations at wider level. In context of Sainsbury, manager of firm apply the PESTEL
framework which is further discussed as follow-
PESTEL Analysis
It is a type of framework which is used by entity to examine and analyse the external factors
in order to execute the organisation activities in proper manner (Sisakhtnezhad, 2017). It is time
consuming model because information is needed to apply framework. In relation of Sainsbury,
PESTEL analysis is further explained below-
Political factor
It is element which consists of factors such as political stability, tariffs, environment
stability, etc. In context of Sainsbury, the impact of these factors is to analyse the intervention of
government with economy. For example- Sainsbury has been affected because inflation rates has
increased after U.K exit. The manager of firm make assure that appropriate type of analysis is
made so that it is easy to examine the elements.
Economic factor
It is another component of PESTEL in which it includes factors such as foreign exchange
rates, inflation or deflation rate etc. In relevance of selected firm, they planned to invest in growing
markets as because needs of consumers are not limited and it helps in accessing to benefits easily.
The economic factor has wide impact on organisation and it is necessary to be well aware about
these element so that appropriate type of decisions are made (Verver, 2018).
Social factor
In this component of PESTEL it specifies about factors like age, income, etc. In context of
chosen firm, customers today mostly prefer online shopping and it is becoming essential to focus
on customer needs as well as requirements. So, selected firm provide discounts and offers to the
customers on products.
Technological factor
This element focuses on use of advanced software and applications with aim of accessing
to competitive benefits. In this competitive market, it is essential to use technology so that
appropriate goals are accomplished. So, in relation of selected entity they update their website on
weekly basis. Cost involved with this factor is huge but focusing on this leads to accessing to
benefit easily.

Environmental element
It is element in which it specifies about the factors like waste management, resources, etc. It
is critically important focus on this factor so that appropriate type of relations are maintained. In
case of chosen firm, they have been into focusing into achieving of U.N Sustainability goals and is
working accordingly (Abbasi, 2017).
Legal factor
It is also crucial element in which it focuses on rules, regulations and legislations. In
business, it is important to focus on legal considerations so that it is easy to achieve business
objectives in proper manner. In relation of selected firm, sugar tax of U.K is affecting various
products of Sainsbury. Also, rules were to be laid down to stop firm to stop promote high fat salt.
Thus, from above discussed matter it is examined it is essential to focus on external forces
so that it is easy to achieve business goals. With scanning of business environment, it is easy to
analyse the external factor within market that affects the business activities (Ashraf, 2019).

CONCLUSION
After a brief analysis of above report, it has been concluded that it is essential to focus on
businesses, forms and structures so that goals are accomplished in appropriate way. So, discussions
have been made about different types of entities, structures and external factors affecting business
operations. This has been evaluated that it is important to focus on organisations & market situation
so that effective type of selection of business is done on the basis of which resources are used
accordingly.

REFERENCES
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Ashraf, 2019. Social business as an entrepreneurship model in emerging economy. Management
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Donner, 2020. A new circular business model typology for creating value from agro-waste. Science
of the Total Environment, 716, p.137065.
Fosher, 2018. Understanding the Marketing and Management of trails using PESTEL Analysis.
Hongcheng, 2020. Research on the Land Consolidation Strategy of Dalian City Based on PESTEL
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Joshua, 2020. Examining the external-factors-led growth hypothesis for the South African
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Sisakhtnezhad, 2017. External factors influencing mesenchymal stem cell fate in vitro. European
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